Apple to cut iPhone 13 production goal for last quarter as chip shortage hits suppliers Broadcom and Texas Instruments

Apple said it could miss its target of 90 million iPhone 13 models in the last three months of the year, shipping as many as 10 million fewer units this year

The chip shortage is hitting suppliers of Apple’s display parts and wireless components, but TSMC’s production of A-series processors remains on track

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Apple's iPhone 13 models pictured at an Apple Store on the day the new smartphone series goes on sale in Beijing on September 24. Photo: Reuters

Published: 10:35am, 13 Oct 2021Updated: 10:36am, 13 Oct 2021

Apple Inc is likely to slash its projected iPhone 13 production targets for 2021 by as many as 10 million units as prolonged chip shortages hit its flagship product, according to people with knowledge of the matter.

The company had expected to produce 90 million new iPhone models in the last three months of the year, but it’s now telling manufacturing partners that the total will be lower because Broadcom Inc and Texas Instruments Inc are struggling to deliver enough components, said the people, who asked not to be identified because the situation is private.

The technology giant is one of the world’s largest chip buyers and sets the annual rhythm for the electronics supply chain. But even with strong buying power, Apple is grappling with the same supply disruptions that have wreaked havoc on industries around the world. Major chip makers have warned that demand will continue to outpace supply throughout next year and potentially beyond.

Apple gets display parts from Texas Instruments, while Broadcom is its long-time supplier of wireless components. One TI 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.

Apple shares slipped as much as 1.6 per cent to US$139.27 in late trading after Bloomberg reported on the news. The stock was up 6.6 per cent this year through Tuesday’s close. Broadcom and TI also dipped in after-hours trading.

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 US$120 billion in revenue. That would be up about 7 per cent from a year earlier – and more money than Apple made in an entire year a decade ago.

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