Apple slashes production of iPhone 13 as chip shortage bites

Production bottlenecks at its suppliers Broadcom and Texas Instruments (TI) have meant Apple will not be able to produce the 90 million units in the last three months of this year that it originally envisaged, sources told the news website.

TI typically provides Apple with display parts for the iPhone, while Broadcom has long supplied Apple with wireless components for the devices.

The global shortage of semiconductors has been caused by several factors, including the Covid-19 pandemic causing facilities to close temporarily or scale down production, the sudden demand for chips to support remote work and study, and the ongoing trade war between the US and China.

All this has resulted in serious supply issues for a range of industries, including the automotive sector, gaming, and consumer electronics. Nearly a year on from release, Microsoft’s Xbox Series X and Sony’s PlayStation 5 are still hard to find as consumer demand eclipses the firms’ ability to produce units.

Some auto production lines have also been put on hold due to a shortage of chips, with Jaguar Land Rover and Ford shutting factories and laying off workers while other automakers choose to leave out higher-end features such as integrated navigation systems in order to adapt to the shortage.

Toyota, the world’s largest automaker slashed its worldwide vehicle production by 40 per cent in September, due to the chip shortage.

Apple is one the world’s largest chip buyers, but even its strong buying power has not shielded it from the current supply problems. The iPhone is not the only device affected, with Bloomberg reporting that it has also struggled to make enough of its Apple Watch Series 7.

According to executives at Acer and Intel, the dearth will continue until late next year at the very earliest and the problem seems to have got even worse in recent months. The average gap between the order and delivery times for electronics manufacturers rose yet again in September, for the ninth month in a row, to over 21 weeks.

Shares of Apple fell 1.2 per cent in after-hours trading, while Texas Instruments and Broadcom were both down about 1 per cent.

Jeff Fieldhack, research director for Counterpoint Research, said the reported Apple production cut could also be part of the iPhone maker's normal launch process of over-ordering devices to be prepared for an initial customer rush and then trimming orders as sales trends become clearer.