Apple Stumbled by Semiconductors... New iPhone 13 Production Cut (Comprehensive)

(Photo by Bloomberg News)

[Asia Economy Reporter Yujin Cho] Apple is reportedly considering reducing its iPhone 13 production target by up to 10 million units this year due to the semiconductor chip shortage, Bloomberg reported on the 12th (local time).

Apple initially expected to produce 90 million units of the iPhone 13 model in the fourth quarter of this year, but as production disruptions from semiconductor suppliers such as Texas Instruments and Broadcom have prolonged, it appears the company has lowered its production target for the end of the year.

Apple receives analog semiconductor and wireless communication chip components from Texas Instruments and Broadcom, respectively.

Broadcom, a major semiconductor supplier for Apple, outsources production to Taiwan's largest semiconductor manufacturer TSMC and others without owning its own factories, so it is expected to take some time to improve production disruptions. Texas Instruments also outsources 20% of its total volume to external manufacturers.

Initially, while the entire smartphone industry was experiencing a semiconductor shortage, most believed Apple would be relatively less affected due to its sufficient inventory compared to competitors.

Regarding this, Bloomberg commented, "It shows that even the tech giant Apple, with strong purchasing power, is not exempt from the global semiconductor chip shortage caused by the COVID-19 pandemic."

Apple is reportedly experiencing production disruptions not only with the iPhone 13 but also with other products including the Apple Watch 7.

Apple and Broadcom declined to comment on the plan to reduce the iPhone 13 production target.

Experts commonly agree that normalization of the semiconductor supply shortage is still far off. Building semiconductor manufacturing facilities (so-called fabs) requires billions of dollars in capital investment and more than two years of construction time, and the prolonged crisis is increasing lead times (the time from order to delivery), which is also a cause for concern.

According to investment firm Susquehanna Financial Group, as the supply-demand shortage intensifies, semiconductor lead times have increased for nine consecutive months, reaching an average of 21.7 weeks in September.

The industry expects the semiconductor shortage to continue until 2023, as the supply shortage spreads across all sectors including smartphones, home appliances, and automotive.

Additionally, recent COVID-19 lockdown measures in Malaysia and power shortages in China have caused semiconductor suppliers in the region to repeatedly reduce production and shut down operations, exacerbating the production disruption situation. TPK Holdings, a panel supplier for Apple, announced last week that its subsidiaries in Fujian Province, southeastern China, have reduced production schedules due to power restrictions.

Unimicron Technology, a Taiwanese supplier for Apple, also suspended operations at three factories in Kunshan, Jiangsu Province, for 4.5 days starting from the 26th of last month due to local government power supply restrictions.

This content was produced with the assistance of AI translation services.