Global Chip Shortage and its Impact on Apple

The Cupertino-based company is likely to cut production of its iPhone 13 by as many as 10 million units due to the global chip shortage. Apple is not alone as other companies are also trying to solve this issue. As it turned out it could take months to deal with problems created by the lack of chips. 

 Apple was expected to produce tens of millions of new iPhone models more precisely 90 million units by the end of 2021. The company told its manufacturers that the number of units would be lower this year. Its chip suppliers including Broadcom Inc and Texas Instruments are struggling to deliver components. Broadcom Inc as well as Texas Instruments are responsible for several key components, including chips that handle display power management. 

TSMC is in charge of manufacturing the iPhone’s primary A15 Bionic SoC on the iPhone 13 and iPhone 13 Pro. 

Shares of the company from California dropped 1.2% in after-hours trading, while shares of Texas Instruments fell about 1%. Moreover, shares of Broadcom Inc also dropped about 1%. 

Apple and its problems

Several months ago, the company forecast slowing revenue growth. Apple said the chip shortage would crimp iPhone production. Apple’s supplier Texas Instruments also gave a soft revenue outlook that month. 

The problems created by the lack of chips affected various industries from automobiles to electronics. Consequently, many automakers temporarily suspended production.

The company was able to cope with the lack of chips thanks to its massive purchasing power and long-term agreements with chip vendors. However, sometimes even Apple is struggling to deal with problems. It is likely that the tech giant will eventually manage to get production up. Nevertheless, the slashed manufacturing estimate means that it will probably be even more difficult to find iPhone 13 in the coming months.