A16 Chip in iPhone 14 Pro Reportedly Costs Apple Over Twice as Much as A15 Chip

[MacRumors]

Apple's new A16 Bionic chip in the iPhone 14 Pro and iPhone 14 Pro Max costs $110 to produce, making it over 2.4× as costly as the A15 chip in iPhone 13 Pro models released last year, according to a Nikkei Asia report.

The A16's higher cost is likely due in part to the chip being manufactured based on TSMC's 4nm process, while the A15 is a 5nm chip. iPhone chips could continue to increase in price as miniaturization continues, with rumors suggesting the A17 chip in iPhone 15 Pro models will be based on TSMC's 3nm process, and a DigiTimes report this week claiming that TSMC will begin volume production of 2nm chips in 2025.

Geekbench 5 benchmark results indicate the A16 chip delivers around 15% to 17% faster multi-core performance compared to the A15 chip. Only the iPhone 14 Pro and iPhone 14 Pro Max are equipped with the A16 chip, while the iPhone 14 and iPhone 14 Plus have the same A15 chip with a five-core GPU as found in iPhone 13 Pro models.

In collaboration with Fomalhaut Techno Solutions, a Japanese research firm specialized in reverse engineering and bill-of-materials analysis, Nikkei found that average production costs have increased about 20% across the iPhone 14, iPhone 14 Pro, and iPhone 14 Pro Max compared to the equivalent previous-generation models.

The report claims that given Apple did not raise prices for its latest iPhone models in the U.S. and some other markets, the higher production costs mean that the company's profit margins have "likely shrunk," but prices did increase in key markets like the U.K., Australia, and Japan amid a strong U.S. dollar relative to other currencies.

Article Link: A16 Chip in iPhone 14 Pro Reportedly Costs Apple Over Twice as Much as A15 Chip

 

[JW Pepper]

I can't see that the phone needs a faster chip. My guess is the only reason for using the new chip is the energy saving.

 

[macsplusmacs]

Waiting on Google to take this as a compliment.

Geez, What is in the water cooler at that company?

 

[MathersMahmood]

It'll cost us more next year too!

 

[1557750]

And people complain about them using last years chips in base model 14’s this year.

I hope this trend continues. Chips cost more, so Pro should get them because they cost more.

Bring on the hate. 👊😙👍

 

[Mojohanna32]

I’ll bet that it was more expensive, but no where near 20% more expensive.
If it actually were that expensive, then other component costs must have come down enough to offset this. Apple is not going to suck up that much margin loss.

 

[Spaceboi Scaphandre]

I...what?

 

[magicschoolbus]

It’s a great chip. The 14 Pro Max is blazing fast compared to my 11 Pro Max. I can’t believe how quick it is.

 

[ipedro]

I can't see that the phone needs a faster chip. My guess is the only reason for using the new chip is the energy saving.

The iPhone is going to need as much processing power as they can fit into it because it'll be running the AR glasses and that kind of superimposition of graphics on real world objects is processor intensive.

The march towards miniaturized processing power, equivalent to what we've seen in full blown computers, and power efficiency while achieving it, is all in service of wearable tech on our wrists and soon, in glasses.

 

[I7guy]

The iPhone PM is hella fast. It shows.

 

[TheYayAreaLiving 🎗️]

The performance of the Pro/Pro Max models speaks for itself. It's worth it!

 

[nerdAFK]

So selling more "Pro" models could actually hurt Tim Cook's profit margin. Ouch

 

[Sasparilla]

I did read TSMC was raising their prices before, they have the market by the throat for 5nm / 4nm (which is just a slightly refined version of their 5nm tech), this would be a good reason we're not seeing it on the basic 14 - although production quantity limitations could be that too.

TSMC will have the market by the throat for 3nm this coming year as well - would not be surprised if they jacked prices up more (smaller fabrication size should allow more chips per wafer and keep costs down but doesn't seem like TSMC is doing that). Would be a bit amusing if its actually TMSC that is forcing the CPU segmentation of the iPhone line - I actually would not be surprised that this is the reason.

 

[Apple_Gabe]

I do think running apps and overall use on the 14 pro is incrementally more smoother, but not significantly different from the 13 pro. I read an article that said that the A16 Chips is actually just a more advanced 5nm process and not a true 4nm process like Apple was advertising. But what would be the ultimate version of the chip with the current technology, a 1nm process?

 

[applicious84]

When people say they don't need extra speed for an iPhone, maybe they don't...now. But that iPhone could also last a year longer. That's a pretty big deal.

 

[DEMinSoCAL]

I can't see that the phone needs a faster chip. My guess is the only reason for using the new chip is the energy saving.

Guess again. How cool would it be for Tim to stand on the stage and say their new iPhone 14 Pro Max has the same chip as last years 13 Pro Max? Apple basically needs a new chip every year to motivate consumers to buy the new model.

But I agree...the A15 is more than fast enough. I've never once complained my iPhone is slow/sluggish. Can't say the same for my Android (backup) phones.

 

[DEMinSoCAL]

When people say they don't need extra speed for an iPhone, maybe they don't...now. But that iPhone could also last a year longer. That's a pretty big deal.

People don't buy new iPhones because they need more speed. They buy them because of the new features, better cameras, etc. So a faster phone doesn't buy longevity for most people, features do.

 

[iPhoneFan5349]

I do think running apps and overall use on the 14 pro is incrementally more smoother, but I wouldn't say it's significantly different from the 13 pro. I read an article that says that the A16 Chips is actually just a more advanced 5nm process and not a true 4nm process like Apple was advertising. But what would be the ultimate version of the chip with the current technology, a 1nm process?

I actually felt it a little slower than the 13 Pro.

 

[MayaUser]

I can't see that the phone needs a faster chip. My guess is the only reason for using the new chip is the energy saving.

So next year you will be fine with A15 in the iphone 16 line up

 

[HobeSoundDarryl]

The iPhone is going to need as much processing power as they can fit into it because it'll be running the AR glasses and that kind of superimposition of graphics on real world objects is processor intensive.

The march towards miniaturized processing power, equivalent to what we've seen in full blown computers, and power efficiency while achieving it, is all in service of wearable tech on our wrists and soon, in glasses.

Goggles will presumably have much more usable space for processing power and battery than a skinny brick in our pockets. Other than business motivations, why make them dependent on a phone? Yes, perhaps interface with phone for select functions better done by that "coprocessor" but I question the idea that the bulk of the computer horsepower for goggles should be in iPhone.

Depending on how big we want to imagine goggles/glasses, it seems they should have M4 chips in them vs. leaning on the A18 or whatever that will be at the time. If the rumor price of $3K for goggles is real, I suspect we have a powerful Mac or two on our heads... not some (mostly) tiny monitors leaning heavily on the phone in our pocket for much of what we see in and do with them.

However, that offered, your guess is as good as mine. Apple does like to make many things have hard dependencies on an iPhone in a pocket.

 

[ksec]

Is this another PR pieces by Apple?

There is no way A16 cost 2.4x more than A15. That is some number spinning there.

 

[citysnaps]

So selling more "Pro" models could actually hurt Tim Cook's profit margin. Ouch

The newer more expensive chip adds to COGS (cost of goods sold). And Apple will simply apply their roughly +40% GPM to the cost. It won't hurt Apple's profit margin.

 

[nvmls]

If only software were on par with the hardware.

 

[citysnaps]

Is this another PR pieces by Apple?

There is no way A16 cost 2.4x more than A15. That is some number spinning there.

It's probably a combination of things. TSMC raising prices in general, a larger die, a new process, and possibly lower yields right now.

 

[cocky jeremy]

So selling more "Pro" models could actually hurt Tim Cook's profit margin. Ouch

Not necessarily. If the Pro costs 15% more but they charge than extra 20%, they're gaining margin. At the end of the day, it's all a guess.