A new report from Nikkei Asia claims that it costs Apple more than twice to manufacture the new A16 Bionic chip — which is used in the iPhone 14 Pro and 14 Pro Max models — than the A15 Bionic chip used in iPhone 14 and last year’s iPhone 13 models.
The report cites that it costs $110 to manufacture the A16 Bionic SoC, which is 2.4 times more than the A15. The publication examined the components of the new iPhone 14 series, including its camera components and motherboard parts. Based on the observations, it reports that the new series’s production costs are 20% higher than the previous iPhone generation.
Overall, it costs Apple suppliers $501 to manufacture the iPhone 14 Pro Max. This is $60 from the iPhone 13 Pro Max. The firm says that this is a steep increase in production cost as Apple’s most expensive models have mostly ranged between $400 and $450 since the debut of the iPhone XS Max in 2018.
The higher cost of A16 Bionic is mostly due to the TSMC 4nm node process used in the new chip. For those unaware, the A15 Bionic chip is based on 5nm node technology. Then, there are new camera components in the iPhone 14 Pro models, including Sony’s 48MP CMOS image sensor, which is 30% larger than previous models and costs 50% higher at $15.
It remains to be seen what effects the raised production cost has on the company’s revenue. The higher production costs could result in lower profits for Apple, but the high demand for iPhone 14 Pro and Pro Max models could negate its effect.
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Source: Nikkei Asia