Apple’s upcoming A20 chip could drive iPhone prices even higher next year

Apple iPhone

After raising prices for the iPhone 17 Pro and iPhone Air this year, Apple may be preparing for another round of price hikes in 2026, this time driven by the soaring cost of its next-generation A20 chip.

According to a new China Times report, the A20 processor is expected to debut with the iPhone 18 lineup and will be built on TSMC’s cutting-edge 2-nanometre process. The new node promises major efficiency and performance gains but reportedly comes with a steep production cost increase.

TSMC has invested heavily in developing its 2nm technology and, unlike in previous years, is reportedly unwilling to offer Apple discounted rates. The report claims that the new process could cost at least 50% more than the current 3nm manufacturing used for the A17 and A18 chips. Given Apple’s long-term dependence on TSMC for chip fabrication, the higher costs could translate to significantly increased expenses across the entire iPhone lineup.

While Apple typically avoids passing rising component costs directly onto consumers, the scale of this increase could make it unavoidable for certain models. The company might absorb some of the added expense for its mainstream models while raising prices for the Pro or Ultra tiers.

This year, Apple managed to keep the base iPhone 17 at $799, but with demand running strong and chip costs set to surge, the iPhone 18 series could see higher entry prices across the board. Alternatively, Apple may hold back on other planned upgrades to balance costs without further inflating retail pricing.

The A20 is expected to bring notable performance and power-efficiency improvements, potentially setting a new benchmark for mobile silicon. However, its development underscores the growing financial strain of staying at the forefront of semiconductor innovation — and hints that the days of steady iPhone pricing could soon be over.