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Chip shortage: Apple to cut iPhone production

by drbyos

Apple was still relatively little impacted by the chip shortage that currently affects all players in electronics, but the company has decided to reduce its production for the coming months.

A global shortage is affecting the microchip market, and everyone is affected, from phone makers to car makers. Apple seemed for the moment still spared by these low stocks, certainly having anticipated the movement and having ordered units well in advance.

10 million fewer iPhones

But finally, reality catches up with the Cupertino company which will reduce its production for the end of the year, according to Bloomberg. The Californian giant had planned to manufacture 90 million of its iPhones by the end of the year, and it should be satisfied with 80 million units.

Two of its suppliers are facing a shortage, Broadcom and Texas Instrument. The first provides Apple with elements for wireless networks and the second provides it with elements for screens including the one to turn on the OLED panel. And a lot of these chips are made by foundries either way, which doesn’t help improve lead times.

In addition, the time between ordering a chip and delivering it extends. It is now around 21.7 weeks compared to 14 weeks at the start of the year and around 12 weeks last year. It therefore takes almost twice as long as a year ago to receive a chip and the energy situation in China could further extend these delays.

The new iPhone 13 lineup was released last month and demand has been strong across the globe, with pre-orders even running out of stock within a short period of time. And now it takes about a month for an iPhone 13 Pro ordered from Apple’s site, and several stores of the manufacturer do not have stock for certain models.

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A problematic situation for many companies

The situation that Apple is going through is not problematic only for the firm itself, which will be deprived of part of its sales for the end of the year holidays. Indeed, Apple relies on many companies for the manufacture of its iPhones and the announcement of a drop in production has impacted these manufacturers, like Japan Display which supplies the panels to Apple for its iPhones and which sells half of its production, and whose stock market price has fallen by several points.

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