Jan. 6, 2025–According to Ben Bajarin, CEO and Principal Analyst at Creative Strategies, the cost of manufacturing Apple’s chips has skyrocketed. The transition from the A7’s 28nm process to the A18 Pro’s cutting-edge 3nm node has seen wafer prices increase from $5,000 to $18,000 per wafer, a nearly fourfold increase. This dramatic rise, confirmed by third-party supply chain data and Tom’s Hardware, reflects the increasing complexity and expense of advanced semiconductor manufacturing.
This cost increase isn’t just about transistor count. While the A-series chips have seen significant improvements in core count and features—from the A7’s two high-performance cores and four-cluster GPU to the A18 Pro’s two high-performance cores, four efficiency cores, 16-core NPU, and six-cluster GPU—the rate of improvement is slowing. While early transitions saw massive gains in transistor density (86% from A11 to A12), recent advancements have yielded smaller increases, largely due to slower SRAM scaling.
This deceleration in performance gains, coupled with the soaring costs, presents a significant challenge. Anue reports that, excluding the A18 and M4 series, performance improvements are slowing, although Apple continues to prioritize per-watt efficiency.
The situation is further complicated by TSMC’s production capacity. While its new Arizona plant will boost output, the higher manufacturing costs in the US and strong AI chip demand are prompting price increases of 5-10% for advanced nodes. This, coupled with TSMC’s struggles to ramp up 2nm production to meet future demand, opens the door for competitors.
Reports suggest that Nvidia and Qualcomm are exploring Samsung’s 2nm process, despite past challenges. However, Taiwanese experts dismiss claims of significant order transfers to Samsung, highlighting the ongoing competition and the inherent challenges of advanced node manufacturing. Analysts predict Apple is unlikely to adopt 2nm for smartphone SoCs by 2026, citing Samsung’s capacity limitations and production inconsistencies.
