A16 Bionic reportedly costs more than twice as much as A15

Posted:
in iPhone edited October 7
The A16 Bionic chip found in the iPhone 14 Pro models costs $110 to manufacture, which is 2.4 times more than the A15 found in the iPhone 13 series and in the iPhone 14.

iPhone 14 product line
iPhone 14 product line


Nikkei Asia did a teardown of three models in the iPhone 14 series, examining components such as the processor and camera parts. The media company says the new series's production costs are 20% higher than the previous iPhone generation.

In terms of parts, calculations suggest production of the iPhone 14 Pro Max cost Apple $501 in parts, up over $60 from the iPhone 13 Pro Max. The firm calls this a steep production cost, saying parts prices for Max models have ranged between $400 and $450 since the debut of the iPhone XS Max in 2018.

The higher production cost is reportedly due to the A16 Bionic chips in the iPhone 14 Pro models. The chip costs $110, over 2.4 times more than the A15 in the iPhone 13 Pro Max.

The iPhone's cost-to-retail price ratio over the last five years
The iPhone's cost-to-retail price ratio over the last five years


The A16 Bionic uses a 4-nanometer process from chip supplier TSMC, while the A15 uses a 5-nanometer process. New camera components in the iPhone 14, including Sony's CMOS image sensor, are 30% larger than previous models and cost 50% higher at $15.

Parts for the iPhone 14 primarily come from US suppliers, accounting for 32.4% of costs, up 10% from the iPhone 13. However, South Korea was the top supplier in 2021 and saw its share of manufacturing drop by over five points, down to 24.8%.

The report also claims that since Apple raised iPhone prices in some countries such as Japan and Australia, but not in the US and other markets, higher production costs resulted in lower profits for the company.

But the more likely explanation is foreign exchange rates. The US dollar has been strong in 2022 compared to other currencies, meaning that imports into the country are cheaper for Americans to buy.

Fomalhaut Techno Solutions, a research company based in Tokyo, Japan, helped Nikkei examine the devices.

Read on AppleInsider

Comments

  • Reply 1 of 15
    thttht Posts: 4,630member
    I can believe the total BOM cost of about $500. Maybe. It's your basic MSRP divided by 2 to 3, depending on how much you believe the soft costs are.

    The headliner of an A16 SoC costing $110? I call BS on it. Nobody knows. Heck, I bet TSMC and Apple don't even really "know". It's a rather circular contracting arrangement of pre-paying, fixed-priced unit costs, technology funding, so on and so forth. How they determine $/SoC is going to vary with accounting assumptions. At $110, the SoC is 25% of the cost of an iPPM. Sounds crazy. If it was $80, easier to believe.
    racerhomie3lordjohnwhorfinwatto_cobramuthuk_vanalingamFileMakerFeller
  • Reply 2 of 15
    MadbumMadbum Posts: 305member
    Another Nikkei insider trading Apple hit piece 

    so A15 costs $46

    but A16 costs $110

    and Apple is like OK cool? 

    Also if True , shouldn’t TSMC have twice the earnings now year over year??

    people need to stop being dumb and believe everything on internet 
    edited October 7 cornchipwatto_cobraFileMakerFeller
  • Reply 3 of 15
    y2any2an Posts: 135member
    Claiming to know the cost of the A16 or any other contract-manufacture chip without an inside source is, frankly, rubbish. Bring me die sizes and gate counts and I can make an informed guess. Moving to 4nm is a 2-edged sword for costs - reducing the overall die size would improve yields and reduce costs, unless other problems with the new process were suppressing yields, and there’s no mention of that here.  
    cornchipwatto_cobraFileMakerFeller
  • Reply 4 of 15
    entropysentropys Posts: 3,707member
    I would have thought a smaller process allowing more SOCs on the die would help reduce costs?
    watto_cobra
  • Reply 6 of 15
    What is the basis for the A16 cost estimate. It's barely an upgrade, really should have been called the A15+, on,y a small increase in transistor count, pretty much the same CPU, GPU, and NPU cores, slightly faster clocks. The TSMC 4nm process is really a tweaked 5nm process, too. Double the price for 6% more transistors and a 5% clock speed boost? 
    watto_cobra
  • Reply 7 of 15
    MadbumMadbum Posts: 305member
    What is the basis for the A16 cost estimate. It's barely an upgrade, really should have been called the A15+, on,y a small increase in transistor count, pretty much the same CPU, GPU, and NPU cores, slightly faster clocks. The TSMC 4nm process is really a tweaked 5nm process, too. Double the price for 6% more transistors and a 5% clock speed boost? 
    That is why this is almost 100 percent fake story 
    watto_cobra
  • Reply 8 of 15
    crowleycrowley Posts: 10,453member
    entropys said:
    I would have thought a smaller process allowing more SOCs on the die would help reduce costs?
    Depends how many of the SOCs are usable.  Die shrinks usually come hand in hand with yield issues.
    watto_cobraFileMakerFeller
  • Reply 9 of 15
    bloggerblogbloggerblog Posts: 2,316member
    The 4nm process uses specialized EIV equipment that are super expensive and are manufactured by only one company in the world. The machines are manufactured in such low quantities that only one or two companies can own one. So if Apple decides to use that process they are definitely expected to pay a premium. 
    cg27
  • Reply 10 of 15
    DAalsethDAalseth Posts: 2,398member
    Madbum said:

    Also if True , shouldn’t TSMC have twice the earnings now year over year??

    Not necessarily. If it costs TSMC that much more it would offset.
    edited October 8 FileMakerFeller
  • Reply 11 of 15
    cg27cg27 Posts: 183member
    The 4nm process uses specialized EIV equipment that are super expensive and are manufactured by only one company in the world. The machines are manufactured in such low quantities that only one or two companies can own one. So if Apple decides to use that process they are definitely expected to pay a premium. 
    Excellent video summary, thanks for sharing.  Wonder if China invaded Taiwan whether these amazing machines are booby trapped to make reverse engineering more difficult.  Even without destructive measures seems they would be chasing what would soon be previous gen tech.  Good to see the west is taking this as seriously as they should.  Granted, if China invaded Taiwan they’d have other ramifications to deal with, as would we.
  • Reply 12 of 15
    MadbumMadbum Posts: 305member
    cg27 said:
    The 4nm process uses specialized EIV equipment that are super expensive and are manufactured by only one company in the world. The machines are manufactured in such low quantities that only one or two companies can own one. So if Apple decides to use that process they are definitely expected to pay a premium. 
    Excellent video summary, thanks for sharing.  Wonder if China invaded Taiwan whether these amazing machines are booby trapped to make reverse engineering more difficult.  Even without destructive measures seems they would be chasing what would soon be previous gen tech.  Good to see the west is taking this as seriously as they should.  Granted, if China invaded Taiwan they’d have other ramifications to deal with, as would we.
    I would honestly worry more about Putin blowing the world up before that. Zelenskyy talking about striking Moscow and Ukrainian blowing up the Russian bridge today with a car bomb ISIS style.

     Current US administration seems to have no capacity to insist on peaceful solution other than continue to escalate war and do whatever Ukraine wants

    I would  not be surprised if Putin drops a couple Nukes on Kyiv next week as retaliation for the car bomb killing civilians.
    edited October 8
  • Reply 13 of 15
    DAalsethDAalseth Posts: 2,398member
    Madbum said:
    cg27 said:
    The 4nm process uses specialized EIV equipment that are super expensive and are manufactured by only one company in the world. The machines are manufactured in such low quantities that only one or two companies can own one. So if Apple decides to use that process they are definitely expected to pay a premium. 
    Excellent video summary, thanks for sharing.  Wonder if China invaded Taiwan whether these amazing machines are booby trapped to make reverse engineering more difficult.  Even without destructive measures seems they would be chasing what would soon be previous gen tech.  Good to see the west is taking this as seriously as they should.  Granted, if China invaded Taiwan they’d have other ramifications to deal with, as would we.
    I would honestly worry more about Putin blowing the world up before that. Zelenskyy talking about striking Moscow and Ukrainian blowing up the Russian bridge today with a car bomb ISIS style.

     Current US administration seems to have no capacity to insist on peaceful solution other than continue to escalate war and do whatever Ukraine wants

    I would  not be surprised if Putin drops a couple Nukes on Kyiv next week as retaliation for the car bomb killing civilians.
    Let’s keep the Russian propaganda off this site. If you want to believe that BS fine, but the rest of us aren’t here to listen to lies.
    thtmike1bloggerblog
  • Reply 14 of 15
    thttht Posts: 4,630member
    The 4nm process uses specialized EIV equipment that are super expensive and are manufactured by only one company in the world. The machines are manufactured in such low quantities that only one or two companies can own one. So if Apple decides to use that process they are definitely expected to pay a premium. 
    I expect increased costs from higher energy prices (translates to higher costs for basically everything) and pandemic driven scarcities, but outside of that, I do not expect much increased costs from TSMC 4nm in of itself, no more than when TSMC 5nm was new 2 years ago. So, perhaps a 10% to 20% increase cost per SoC or per chip over 5nm.

    Over 200%? That's crazy. Apple would have stuck with 5nm and started to look at Samsung and Intel for fab services if so, and they would have started 2 years ago when contract negotiations would have been done. So, people should be skeptical of that number until proven otherwise.

    Apple did not raise prices on the iPhone 14 Pro and Pro Max. A 240% increase in the SoC implies about a $70 to $80 cost increase. That's about a $200 increase at the MSRP level. And, it doesn't include increases in other components. No OEM is going eat such component price increases without increasing the price of the product. Given that Apple didn't raise prices, their component costs didn't increase either. Maybe they eat 10%? Maybe?
    FileMakerFellermuthuk_vanalingam
  • Reply 15 of 15
    The 4nm process uses specialized EIV equipment that are super expensive and are manufactured by only one company in the world. The machines are manufactured in such low quantities that only one or two companies can own one. So if Apple decides to use that process they are definitely expected to pay a premium. 
    You mean EUV lithography and (Dutch) ASML as the manufacturer. Those machines do cost a lot, but are the same for 3/4/5/6/7 nm. Because it is TMSC (or Samsung or Intel or ..) who creates a production line. The new EUV lithography machines, for lower than 3nm, will cost even a lot more. You need multiple in a chip plant. But we won’t see them before 2025 in production lines. 
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