Apple to slash iPhone 13 production on chip shortages

Oct 13, 2021: According to a report published by Bloomberg, Apple’s manufacturing partners are struggling to deliver enough components, forcing the company to scale back targets for the Ifone 13.

According to sources familiar with the matter, Apple Inc. is likely to lower its expected iPhone 13 production targets to 10 million units for 2021 as the long term chip shortage affects its flagship product.

The company had expected to produce 90 million new iPhone models in the last three months of the year, but now it is telling manufacturing partners that the total number will be lower as Broadcom Inc. and Texas Instruments Inc. are struggling to provide enough components.

The technology giant is one of the world’s largest chip buyers and sets an annual rhythm for the electronics supply chain. But despite strong purchasing power, Apple continues to face the same supply disruptions that have devastated industries around the world. Big chip makers warn that demand will continue to rise next year and possibly beyond.

There are signs the chip crunch is getting worse. Lead times in the industry rose to an average of 21.7 weeks in September, according to Susquehanna Financial Group.

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 also is facing component shortages from other suppliers.

Apple and TI representatives declined to comment. Broadcom didn’t 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 in September, but orders won’t be delivered from Apple’s website for about a month. And 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 slated to ship around mid-November, so Apple could still get the new iPhones to consumers in time for the crucial holiday season. The year-end quarter is expected to be Apple’s biggest sales blitz yet, generating about $120 billion in revenue.

Apple’s worries show that even the king of tech world is not safe from the worst global shortage of the global epidemic. In addition to the tight availability of the iPhone, the company has struggled to make enough of the Apple Watch Series 7 and other products. Earlier this year, Apple warned that it would face disruptions to the iPhone and iPad during the September quarter.

The company, based in Capertino, California, cited the current global chip shortage. This period included a week and a half of iPhone 13 revenue.

In addition to the delays in the chip supply chain, a protracted energy crisis in China may add to Apple’s troubles. Apple supplier TPK Holding Co. said last week that subsidiaries in the southeastern Chinese province of Fujian are modifying their production schedule due to local government power restrictions. That comes less than two weeks after iPhone assembler Pegatron Corp. adopted energy-saving measures amid government-imposed power curbs.

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