Apple Inc is likely to slash its projected iPhone 13 production targets for this year by as many as 10 million units as prolonged chip shortages hit its flagship product, people with knowledge of the matter said.
The company had expected to produce 90 million new iPhone models in the final three months of this year, but it is now telling manufacturing partners that the total would be lower because Broadcom Inc and Texas Instruments Inc are struggling to deliver enough components, the people said.
Apple gets display parts from Texas Instruments, while Broadcom is its longtime supplier of wireless components.
One Texas Instruments chip in short supply for the latest iPhones is related to powering the OLED display. Apple is also facing component shortages from other suppliers.
Apple and Texas Instruments representatives declined to comment. Broadcom did not respond to a request for comment.
The shortages have already weighed on Apple’s ability to ship new models to customers.
The iPhone 13 Pro and iPhone 13 Pro Max went on sale last month, but orders are not being delivered from Apple’s Web site for about a month, while the new devices are listed as “currently unavailable” for pickup at several of the company’s retail stores.
Apple’s carrier partners are also seeing similar shipment delays.
Current orders are scheduled to ship around the middle of next month, so Apple could still get the new iPhones to consumers in time for the crucial holiday season.
The fourth quarter is expected to be Apple’s biggest sales blitz yet, generating about US$120 billion in revenue. That would be up about 7 percent from a year earlier — and more money than Apple made in an entire year a decade ago.
Apple’s woes show that even the king of the technology world is not immune from global shortages made worse by the COVID-19 pandemic. In addition to facing tight iPhone availability, the company has struggled to make enough of the Apple Watch and other products.
Broadcom does not have major factories of its own and relies on contract chipmakers such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to build its products. Texas Instruments makes some chips in-house, but also relies on outside manufacturing.
That means they are part of an increasingly challenging fight to secure production capacity at TSMC and other foundries.
Apple is TSMC’s largest customer. It uses the manufacturer to make its A-series processors, but they do not appear to be under threat of shortages for now.
There are signs the chip crunch is getting worse. Lead times in the industry — the gap between putting in a semiconductor order and taking delivery — rose for the ninth consecutive month to an average of 21.7 weeks last month, according to Susquehanna Financial Group.
Separately, a protracted energy crisis in China could add to the iPhone maker’s headaches. Apple supplier TPK Holding Co (宸鴻) last week said that its subsidiaries in Fujian Province are modifying their production schedule due to local government power restrictions.
That comes less than two weeks after iPhone assembler Pegatron Corp (和碩) said that it had adopted energy-saving measures amid power curbs in China.
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