Apple is dramatically cutting production of its iPhone 13 devices thanks to the ongoing shortage of computer chips, Bloomberg has reported.
The company ship 10 million fewer iPhone 13s than anticipated as two of its main suppliers, Broadcom and Texas Instruments, can’t produce enough components for Apple’s flagship smartphones.
Texas Instruments supplies Apple with crucial parts for its devices’ OLED displays and Broadcom sells components for wireless technology.
But despite Apple and its suppliers all seeing share prices dip, the chip shortage squeeze placed on one of Silicon Valley’s most powerful companies may not entirely spell doom-and-gloom.
Apple was expecting higher than average demand for its products in the wake of COVID-19 and was upping expected production of its new generation iPhones from around 75 million in previous years to around 90 million this year.
Losing 10 million devices to supply chain problems would therefore still see Apple record high production numbers on the iPhone 13, even if it can’t quite meet high demand.
Supply chain issues have plagued technology-embedded consumer goods for the duration of the pandemic as factory closures and shipping woes have made it increasingly difficult for suppliers to meet the increased demand for computer chips.
It’s a problem that semiconductor manufacturers have warned may continue for years, leading to fewer high tech consumer goods reaching customers.
Supply chain disruptions have led to new measures from government and industry alike as manufacturers look to the shortage as an opportunity.
Last week reports emerged that leading chip maker, Taiwan Semiconductor Manufacturing Co (TSMC) was preparing to partner with Sony to build a new semiconductor factory in Japan.
The new facilities would cost nearly $10 billion (800 billion yen) to construct and would be in operation by 2024, Nikkei reported.
It would likely make semiconductor products used in camera image sensors alongside chips used in cars.
Early details about the deal suggest it would be built on land owned by Sony which would also take a small stake in a new company spun-out to manage the factory.
Late last month, Intel broke ground on its two new foundries in Arizona.
The $27 billion expansion of Intel’s US operations – also slated for operation in 2024 – is another effort to secure local supply chains against future disruptions and has been supported by the US government’s $70 billion investment into chip manufacturers.
Chip shortage woes
Car manufacturers have been among the worst hit by semiconductor shortages as components needed for modern features are severely lacking.
The result is diminishing new car stock for sellers which in turn has pushed up prices of used cars.
Last week, Czech auto company Skoda warned it may be forced to stop making cars in the final months of 2021 thanks to the chip shortage.
Toyota previously said it would cut production by 40 per cent and UK manufacturers rolled out 27 per cent fewer cars in August compared to last year.
In China – the world’s largest retail car market – September sales reportedly dropped by 17 per cent on the previous year.