Supply shortages
Apple acts to address shortages of chips and screens amid the pandemic
WITH THE ENTIRE electronics industry facing global component shortages, Apple has acted to secure supplies of critical parts.
The M1-chip-powered 12.9-inch iPad Pro, launched in April, has Apple’s first display with mini-LED technology instead of LCD or OLED. Buyers are complaining of long wait times and shipping delays, and it’s believed the cause is that Apple’s production partners are struggling to produce the mini-LED screens in quantity. This is said to be impacting Apple’s plans to launch a rumored MacBook Pro with mini-LED screen.
According to DigiTimes, Apple has made a $200m investment in its primary supplier, TSMT (Taiwan Surface Mounting Technology). This will be used to create four new mini-LED assembly lines, boosting capacity by 700,000 to 800,000 units. In addition, reports claim four new suppliers have been signed.
There’s a global chip shortage, for multiple reasons. Lockdowns around the world have reduced output, as has a drought in Taiwan (wafer manufacturing requires a lot of water), and even freezing weather in February in Texas, which forced chip-making plants to close. Intel CEO Pat Gelsinger warned in June that “shortages of foundry capacity, substrates, and components” will likely last at least to the end of 2021.
Nikkei reports that production of some existing MacBook and iPad models has been delayed by component shortages, although IDC notes that Mac shipments jumped by 29 per cent in 2020.
It is unclear whether supplies of the M1 chip in particular are constrained. The chip is produced by Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, who said in April that while it is doing all it can to increase production, tight supplies are expected to continue well into 2022.
Apple has also invested for the long term in key technologies. In May it awarded Corning $45m from its Advanced Manufacturing Fund, fueling the creation of Ceramic Shield for the iPhone 12 line. Also in May, it announced a new $410m award on top of a 2017 investment of $390m, both from the same fund, going to II-VI, whose optical technologies Apple uses for Face ID, Memoji, Animoji, and the lasers used in LiDAR scanners.