Why the iPhone 16e Uses a 'Binned' Chip (and What That Means)
The iPhone 16e and the iPhone 16 both have A18 chips, but they're not the same.

When Apple announced the iPhone 16e on Wednesday, there was a lot of focus on the price tag ($599 is cheap for a new iPhone, but not that cheap), the lack of MagSafe support, and Apple's decision to finally kill off the Home button.
But there's an interesting discussion to be had surrounding the 16e's processor, the A18 chip. At first glance, it seems like the same A18 chip found in the iPhone 16 and iPhone 16 Plus, and you'd be forgiven for assuming the iPhone 16e offers the same performance as its more expensive sibling devices. The thing is, these aren't the same chips: The A18 in the iPhone 16e is "binned."
What is a "binned" chip?
"Binned" chips aren't just a thing with Apple products. All computer chip makers can bin their chips. It has to do with the manufacturing process: Chips are extremely complicated products, and they don't all come out exactly the same. Samples are tested for quality assurance purposes, and the chips that aren't quite up to snuff are separated from the ones that perform to standard. The former are then "binned," and won't be used as high-end chips, since they aren't able to hit the performance levels manufacturers are looking for.
That doesn't mean binned chips aren't used at all, however. On the contrary, binned chips are often employed as mid- or lower-tier options. Manufacturers will often disable different "cores" of these chips to keep their performance in check. They're still perfectly capable chips, especially when they have this ceiling in place. Intel does this with its line of chips, which is why you have different performance variants, like i5, i7, and i9. Apple does this, too: For the iPad mini 7, the company used binned A17 Pro chips. Now, Apple is using binned A18s for the iPhone 16e.
How the iPhone 16e uses binned A18s
So, Apple makes a batch of A18 chips, originally intended to ship with the iPhone 16 series. During testing, some of these A18 chips aren't totally up to snuff, so they're set aside and not used for iPhone 16 and iPhone 16 Plus devices.
However, Apple has a new iPhone they want to sell for less than its flagship line—one that strips out "premium" features to keep costs down, but also offers incentives for users to actually buy their new iPhone over other options. It has some binned A18 chips lying around: Why not use those instead?
In this way, the iPhone 16e uses the "same" chip as you'd find in the iPhone 16 and 16 Plus—but with the caveat that it doesn't perform as well, and thus can't be pushed as far. Apple even disables one of the GPU cores to keep performance in check: The 16e's CPU has the same six cores as the 16 and 16 Plus' (two performance and four efficiency) and the NPU has the same 16 cores across all devices, but where the GPU in the 16 and 16 Plus has five cores, the GPU in the 16e only has four cores. That's because these chips are binned.
Even though the iPhone 16e isn't dropping until Feb. 28, there are already some early indicators of how it performs. MySmartPrice spotted the device on Geekbench, a notable benchmarking website, where the 16e scored a 24188 in graphics testing, or about 12.5% lower than the iPhone 16's 27668 score. These are raw numbers, and we can't really deduce what real-world use would look like between these two phones until reviewers get their hands on them.
However, based on these stats, my guess is the differences will be minimal. The CPUs and NPUs are the same, and the 16e's GPU still has four cores, which means performance for most tasks on the iPhone is going to be high. Where the difference might show is in graphically demanding apps, such as AAA games. Developers could push the iPhone 16 a bit further than the iPhone 16e, because it has that extra GPU core. That will likely extend the longevity of those premium devices, too: As software advances and becomes more demanding, the extra GPU core on the iPhone 16 could help keep it running smoother for longer.
That said, it's just one extra core. In all likelihood, the difference won't be that great. I think Apple's choice here was more about saving the company money than offering users a noticeably worse experience.