Apple has managed to stage a major coup by securing access to sufficient NAND resources through Q1 2026 while negotiating favorable pricing from TSMC. Meanwhile, negotiations on DRAM access continue and are likely to yield a significant sequential price hike, leading to a cost increase of around 30 percent for Apple's next-gen A20 chips.
Morgan Stanley: Apple's A20 chips will cost 30 percent more than the A19 chips
Morgan Stanley has just concluded its Taiwan-based supply chain checks and has come away with some very interesting tidbits regarding the dynamics surrounding Apple silicon. After all, as one of the most well-connected Wall Street banks, Morgan Stanley's takeaways merit credulity.
According to the Wall Street giant, Apple has secured access to sufficient NAND resources through the first quarter of 2026. Even so, KIOXIA is expected to raise its pricing for Apple once a long-term NAND supply agreement is signed.
Moreover, Apple continues to negotiate access to DRAM, with the Q1 2026 pricing constituting a sticking point. Given the fact that Apple had previously secured access to DRAM under very favorable long-term contracts, Morgan Stanley expects memory suppliers to try "to close the gap with spot market prices by implementing larger increases in C1Q26." As such, Morgan Stanley now expects Apple to secure access to DRAM resources through Q1 2026 only with a sequential price hike of over 50 percent.
Interestingly, Morgan Stanley finds that Apple has managed to secure much more favorable pricing from TSMC, which "is set to raise leading-edge wafer prices for Apple by low-single digits, a smaller increase than the mid-single digit hikes applied to other leading-edge customers."
Accordingly, Morgan Stanley now expects Apple's upcoming A20 chips, which will leverage TSMC's 2nm process, to cost just around 30 percent more than the 3nm-based A19 chips found in the iPhone 17 lineup.
Of course, this negates an earlier report from Taiwan's Economic Daily, which recently stated that the upcoming A20 chip was expected to cost Apple a whopping $280 per unit, corresponding to a year-over-year price increase of around 80 percent relative to the cost of the A19 chip that powers Apple's current-gen iPhone 17 lineup.
The Taiwanese publication had stated that the astounding price hike was partly a function of the ongoing inflationary impulse in the memory sphere, and further bolstered by TSMC's employment of the "first-gen nanosheet transistor technology" as well as "ultra-high-efficiency metal interlayer capacitors" for its N2P fabrication process.
However, as per the latest insights from Morgan Stanley, it seems Apple's sky-high, volume-based leverage with TSMC was apparently sufficient to strike a bargain on the pricing of the A20 chips.
Elsewhere, Morgan Stanley believes that Apple will move to a 200MP camera sensor with the iPhone 21 in 2028, and is looking to add STMicro as an additional supplier of LiDAR sensors, which are currently supplied solely by Sony.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
Follow Wccftech on Google to get more of our news coverage in your feeds.
