Last week, Apple hit us with a little bit of a surprise, and introduced the new base-model iPad with an A16 chip. The new iPad wasn’t much of a surprise, but the A16 chip certainly was. Rumors had long suggested that we should expect an A17 Pro chip, but that never came to fruition.
However, the A16 chip might provide a special perk, one that assures the product can stay around at its $349 price tag in the short term.
US-made A16 chips
Last year, Apple chipmaking partner TSMC begun producing 4nm chips in the US, at its new Arizona plant. Yields are lower than they’re achieving in Taiwan, but it’s certainly a strong start. TSMC began producing A16 chips at the Arizona plant, which seemed like a weird choice at the time, since it wasn’t quite clear what product would use them:
Apple’s A16 SoC […] is currently being manufactured at Phase 1 of TSMC’s Fab 21 in Arizona in small, but significant, numbers, my sources tell me. Volume will ramp up considerably when the second stage of the Phase 1 fab is completed and production is underway, putting the Arizona project on track to hit its target for production in the first-half of 2025.
However, now we know. Apple hadn’t been planning for the iPad 11 to support Apple Intelligence, making it a perfect test-bed for these new US manufactured A16 chips. The report even initially stated that volume production would begin in the first half of this year, aligning perfectly with the new iPad 11 launch.
iPad 11 tariff loophole
While Apple hasn’t confirmed whether or not the iPad 11 uses these US-manufactured A16 chips, it seems probable that it is being used to some degree. Otherwise, there wouldn’t be a product to put these chips in – other than iPhone 15’s, which are likely ramping down in production.
On top of that, as highlighted by Bloomberg’s Mark Gurman, using US-made A16 chips in the new iPad would actually be a strategic play. Given the looming threats of tariffs from the Trump administration, Apple could likely get some sort of exemption, since the chip is US-built. This would secure Apple’s margins on one of its most affordable products, and likely prevent any sort of price hike.
Of course, tariff news has been very back-and-forth, and whether or not we see any sort of long-lasting tariffs is still up in air. Nonetheless, it certainly can’t hurt Apple to say they (likely) have a product using American-made silicon for the very first time.
My favorite Apple accessories on Amazon:
Follow Michael: X/Twitter, Bluesky, Instagram
FTC: We use income earning auto affiliate links. More.
<