Recently, Apple surprised everyone by unveiling the new base-model iPad equipped with an A16 chip. While the launch of a new iPad was expected, the inclusion of the A16 chip came as a shock. Speculation had led many to anticipate an A17 Pro chip, but that did not materialize.
The A16 chip, however, might come with a unique advantage that helps the device maintain its $349 price point for the time being.
A16 Chips Manufactured in the US
Last year, Apple’s chip manufacturing ally TSMC began producing 4nm chips at its new facility in Arizona. Although the yield rates there are lower than those achieved in Taiwan, it’s a promising start. TSMC commenced the production of A16 chips in Arizona, which was surprising at first since it was unclear what devices would utilize them:
According to sources, Apple’s A16 SoC is presently being produced in modest yet noteworthy quantities at Phase 1 of TSMC’s Fab 21 in Arizona. Production volume is expected to increase significantly once the second stage of Phase 1 is completed, setting the Arizona project on a path to meet its output goals in the first half of 2025.
Now, we understand the rationale. Apple had not intended for the iPad 11 to feature Apple Intelligence, making it an ideal testing platform for these new A16 chips manufactured in the United States. Early reports even indicated that mass production would begin in the year’s first half, coinciding perfectly with the debut of the iPad 11.
Potential Tariff Advantages for the iPad 11
Although Apple has not officially verified whether the iPad 11 is using US-manufactured A16 chips, it seems likely that these chips are being employed to some extent. Without a product to integrate these chips, there would be no viable option besides the iPhone 15, which is likely seeing a decline in production.
Moreover, as highlighted by Bloomberg’s Mark Gurman, the incorporation of US-made A16 chips in the new iPad could be a strategic move. With imminent tariff concerns stemming from the Trump administration, Apple could potentially benefit from an exemption since the chips are produced domestically. This could help maintain Apple’s profit margins on one of its more budget-friendly offerings and possibly avert any price increases.
While the situation around tariffs has been quite variable, the long-term outlook remains uncertain. Nevertheless, it could certainly bolster Apple’s image to claim that they have a product utilizing American-made silicon for the first time.
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