Apple warns chip shortage will affect iPad and Mac in current quarter

The chip shortage is a reality that affects more and more companies. Apple managed to get the problem under control in the second quarter of 2021 (January, February, and March), but the company warns that the third quarter will be more complicated. The supply shortages will impact the iPad and Mac supply chain.

Announcing its financial results, Apple CEO Tim Cook said the company has done its best to fill orders, despite industry-wide chip shortages and record demand for iPad and Mac.

“We had no component supply shortages in the second quarter. In the end, all the buffers and offsets collapse. This is happening throughout the supply chain, but it’s allowing us to get ahead of what we expected to sell at the beginning of the quarter.”

While Apple reported record results for Q2 2021, he expects supply constraints to negatively impact Q3 results. He predicts a $3 billion to $4 billion drop in revenue due to supply issues.

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Cook mentioned in a virtual meeting with shareholders that one of the main drawbacks lies in “legacy nodes.” These use “older” manufacturing processes compared to Apple’s high-performance silicon chips.

Apple

While the Apple CEO did not specify which components are expected to be in short supply, the “legacy nodes” could be some of the chips that power the display, serve power management, decode audio or control Wi-Fi, and 5G communications antennas.

“The biggest part of our problem is licensing these legacy nodes. There are a lot of different people not only in the same industry but in other industries that are using legacy nodes,” Cook said.

While Apple designs its products in California, the production relies more or less heavily on outside suppliers. These include historic chip supplier TSMC and various assemblers such as Foxconn Technology Group, Compal Electronics Inc, Pegatron Corp, and Wistron Corp.

This situation comes amid the arrival of new versions of iMac and iPad Pro. Pre-orders for these products will begin on April 30. Although detailed availability information has not yet been announced, shipments are expected to begin in the second half of May.

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