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The global chip shortage may be hitting Apple

April 8, 2021, 6:30 PM UTC
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The shortage of silicon chips finally seems to be squeezing one of the world’s biggest spenders on chips: Apple.

The iPhone maker had been sailing above the supply constraints that have impacted manufacturing across a wide range of products, from cars to video-game consoles to TV sets. But a report on Thursday from Nikkei Asia warned that Apple was forced to postpone manufacturing some laptops and iPad tablets, though not iPhones, owing to tight supplies of chip and display components.

The global chip shortage came about after carmakers and some other industries last year slashed orders for microprocessors, anticipating that the pandemic would hit demand for their products. But the economic downturn was not as steep as expected in many sectors and actually ignited a boom in sales of laptops, web cameras, and other tech gear laden with chips. That put a pinch on the global supply chain network, as only a few companies like Intel, Taiwan Semiconductor Manufacturing Co. (TSMC), and Samsung can produce the most advanced chips.

Apple designs its own chips for iPads, iPhones, and some Mac computers but relies on TSMC to produce the chips. Its products also use dozens of chips from a wide array of manufacturers for added functions like Wi-Fi, 5G connectivity, and battery power management.

Apple declined to comment to Nikkei about the report. Fortune reached out to the company for comment and will update this story if a response is received.

Shares of Apple’s stock, which had previously lost 4% in 2021, were up 1% in midday trading. Analysts are anticipating that Apple brought in $76.8 billion in revenue in the first quarter. The company reports its results on April 28.

Apple CEO Tim Cook made no direct reference to the global chip manufacturing crisis in January during Apple’s last quarterly earnings call, though CFO Luca Maestri said that the company hadn’t kept up with demand for two phone models owing to “some level of supply constraints.” That has been a common issue for Apple in quarters when new iPhones go on sale, regardless of the global chip shortage.

Qualcomm, a key supplier of iPhone chips, repeatedly cited chip supply problems as an issue on its January earnings call, however. “We are seeing demand significantly outpacing supply given the constraints affecting the industry,” CFO Akash Palkhiwala said. “The supply chain situation, I said earlier, has been broad across the industry, is not unique to handset,” new Qualcomm CEO Cristiano Amon added.

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