The state of supply chains will be radically…

Apple suppliers point to higher costs. One supplier to TSMC, which makes all Apple’s iPhone and iPad chips, says it has had to double its prices. They warned that prices will continue to rise.

A company that supplies a supplier of chips for Apple’s iPhones has warned of a significant price increase it has already had to implement and of possible increases in the future.

The warning comes from Japanese chemicals company Showa Dinko KK, which says it is expected to raise prices further “as it grapples with many of the economic challenges facing the $550 billion semiconductor industry”.

Bloomberg reports that there have been “at least ten price hikes” this year due to the turmoil during COVID-19, the war in Ukraine and the weakening yen. CFO Hideki Soumya told Bloomberg News in an interview that the problem is unlikely to improve until next year:

Somaya said the company “has been forced to significantly increase the costs it incurs on customers,” and stated that the company is now charging its customers “double the amount” that was previously calculated.

Bloomberg reported that the supplier “expects to continue raising prices and cutting unprofitable production lines.” As mentioned earlier, Showa Denko is one of the suppliers of TSMC, which makes all the chips that power Apple’s best iPhones, from the iPhone 12 and iPhone 13 to the upcoming iPhone 14, which is expected to include a performance jump especially for “pro” buyers.

The result of all these price changes is that even companies like Apple will eventually begin to feel the effects, as the costs of supplying and hardware components will increase, which may eventually pass to customers.

We have already noticed this trend in some markets. Last week, Apple suddenly raised the prices of some iPhone 13 and iPad models in Japan by 20% or more to deal with the pressure of the strong yen.

With prices rising further and no signs of improvement in sight, there seems to be a real risk that these market conditions will hurt iPhone buyers, most likely in the form of expensive hardware, which of course no one wants.

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