Apple is reportedly planning to cut the production target for the iPhone 13 series by as much as ten million units as the ongoing chip crisis hits the company’s suppliers. The global semiconductor crisis has hurt industries across the board, with the consumer electronics and automobile segments being one of the worst hit. Even a company with a venerable supply chain control like Apple hasn’t been immune to the effects.
It was previously reported that, due to labor shortages, Apple suppliers in China were struggling to meet the demand and exacerbating the already strained production lines. COVID-19 proved to be a major hurdle for some time, but even after the pandemic’s effects receded, the notoriously complicated semiconductor supply chain continued to give brands a headache.
Apple will likely cut down the production target for the iPhone 13 series by as much as 10 million owing to the ongoing chip crisis, according to Bloomberg citing industry sources for the information. The company had initially planned to roll 90 million units of the iPhone 13 quartet off the production line in 2021's final quarter, but the company has since reportedly lowered those estimates. According to the report, the two key suppliers that have failed to provide the necessary amount of components are Broadcom and Texas Instruments.
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Broadcom is known to supply wireless components for Wi-Fi and Bluetooth connectivity to Apple, while Texas Instruments typically provides display parts as well as battery and camera components. One of the components that Apple is currently facing a shortage of happens to be related to the OLED panel for the iPhone 13 series. Camera upgrades, such as the use of improved sensors and series-wide use of sensor-shift image stabilization, were previously understood to have stressed Apple’s suppliers in Vietnam, leading to shipments being pushed back by up to one month for iPhone 13 buyers.
While Apple appears to be facing component shortages from multiple suppliers, the issues associated with Broadcom and Texas Instruments may have finally forced Apple to lower its iPhone 13 production estimates. Apple is expected to generate nearly $120 billion in revenue for the last quarter of 2021 led by strong sales in the holiday season, according to Bloomberg. However, it is unclear if the company will be able to recover from the supply hiccups and release adequate iPhone 13 stock in time. Supply chain snags are also said to be the reason behind the late release of the Apple Watch Series 7.
The iPhone 13 family and Apple Watch Series 7 are not the only products facing the heat. A report from April mentioned that the company had delayed the production of MacBook and iPad due to a shortage of circuit board components and display parts. Not to mention, supply obstacles also reportedly played a role in Apple pushing the launch of an iPad Pro with an OLED screen back by at least a couple of years.
Source: Bloomberg