Apple, which until now seemed to be immune to the semiconductor shortage that has affected all kinds of products, from laptops to cars to the PlayStation 5, it seems that it could finally suffer the same effect.
According an article of Nikkei Asia, the company is postponing production of some products in the MacBook and iPad family this year.
Specifically, the information indicates that the shortage is causing difficulties in the assembly of components on the motherboard of MacBooks. As for the iPad, the article says that Apple is having trouble sourcing components for the display.
That could also suggest that the production of a new iPad Pro could be delayed, as the model was expected to use a new display technology, known as mini-LEDs.
For now, the problems do not appear to have affected the iPhone, although the information claims that the supply of components for the company’s most important product is “fairly fair.” That could indeed become a problem if more disruptions occurred that worsen the shortage.
Apple’s main concern is its ambitious plan to replace its entire line of Macs with its own chip.
The launch of last year’s iPhone 12 was delayed by just over a month as a result of the pandemic. Sure, any product lag would be a big concern this year, but the most urgent thing is the Mac.
Apple has already introduced an updated MacBook Air, 13-inch MacBook Pro, and Mac Mini with its new Apple-made chips, but still most of its product lineup continues to run on Intel chips.
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The company had promised that it would make the transition to stop using Intel chips “in two years”, a time that began to run at the company’s Worldwide Developers Conference held last June. That gives you just over a year to finish the transition, something that is tricky even under ideal circumstances.
In recent weeks it has been rumored that the company could present soon a new iPad Pro and a redesigned iMac. The company is also expected to keep rolling out updates to the top-end 13-inch MacBook, alongside its 16-inch sibling. The Mac Pro is likely already the last Mac to upgrade due to its performance and expandability needs.
Considering that the entire industry faces the same limitations, it doesn’t seem like Apple can just buy the components it needs from the market.
Designing and manufacturing chips, like the chip that Apple has designed for its devices, takes a long time. A decline in chip production is not going to help the company meet its goal of moving away from Intel.
Also, it will not help you avoid the fate of this company, which has experienced manufacturing delays that have damaged its reputation.
Just when we thought things were looking up.
The demand for personal computers it has not cooled down yet behind the overwhelming increase from last year, when everyone tried to adapt to teleworking. Still, many industry analysts expect the shortage to ease in the near future.
General Motors, for example, said in January that it believed the worst was over and that the automaker hoped to return to normal. This statement turned out to be somewhat premature.
Automakers have been especially hard hit trying to stock up on the chips that are used for everything from brakes to entertainment systems to fuel efficiency. Many had canceled orders for parts in early 2020, when they were forced to halt production due to the pandemic. That meant that when the assembly lines were re-started they had no inventory of components.
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In fact, General Motors said it would start ship some vehicles without fuel efficiency chips to meet the demand. Affected vehicles consume slightly more fuel, which means they travel about a kilometer and a half less per liter. That may not seem like a big deal, but it represents a spectacular move to keep production lines moving, even without a few components.
Of course, it didn’t help that the Ever Given, a ship carrying up to 20,000 containers, spent six days stuck in the Suez Canal, blocking no less than $ 10 billion a day. In a supply chain that relies on components being delivered exactly when they are needed to make products, even what seems like a minor event – a ship stuck in a canal – can cause a ripple effect.
Apple is better at this than most, which means it could be a bad sign for others.
If Apple is delaying production due to shortages, it is an increasingly negative sign for the entire industry, as things could get a lot worse before they get better. Unlike some companies that were forced to cut production, Apple hasn’t slowed down in the past year.
CEO Tim Cook is widely recognized as a supply chain expert which has turned the company into a well-honed operating machine. So far, Apple’s aggressive tactics in managing its supply chain have worked well for it.
However, it seems that even Apple cannot avoid the consequences of a puncture in the global supply chain.
Apple has historically turned to Taiwan Semiconductor Manufacturing Company (TSMC) for make iPhone and iPad processors and, most recently, the Mac. Apple licenses the ARM architecture, designs the chips, and contracts with TSMC to produce them. Those chips are shipped to their manufacturing partners, who build iPhones, MacBook Pros, and everything else Apple makes.
Apple exercises extremely strict control over the entire process.
Part of that control includes buying as much of TSMC’s capacity as it can. For example, in December it emerged that Apple had purchased 80% of the manufacturer’s 5 nanometer process, which is used for the M1 chip in the latest Macs, as well as the A14 chips in the iPhone and iPad.
The problem is that the processor is not the only chip in these devices. Even if TSMC is able to keep up, Apple uses components from dozens of other vendors in every device. In fact, Apple’s vendor report lists more than 200 companies that provide different components to the company.
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If Apple plans to use Mini-LED displays in the next iPad, that requires display drivers that not only determine which pixels light up, but also which backlight zones light up. Those controllers are tiny microprocessors. Without the controller, there is no screen.
If the companies that make those components can’t produce any spare parts, they can’t ship displays to Apple, which can’t put them in the new iPads.
Apple has never been shy about using its size, scale and resources to make sure you’re on the front line when it comes to securing what you need to build your products. If the one at the front of the line is struggling, it is bad news for everyone waiting behind, which, in this case, is almost everyone else.
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