Apple Halted M2 Chip Production in January Amid 'Plummeting' Mac Sales

[MacRumors]

Apple halted production of its M2 series chips at the start of 2023 following a pronounced slump in global demand for MacBooks, claims a new report out of Korea.

Facing "plummeting" Mac sales amid a severe PC market downturn, Apple in January completely suspended production of its custom-designed M2 series processors that power new MacBook Pro and Mac mini models and the latest MacBook Air, according to The Elec.

Taiwan's TSMC did not send 5 nano-process M2 chip wafer workpieces to the outsourced semiconductor package test (OSAT) in January and February, according to the OSAT industry on the 3rd. It is believed that it was because Apple requested to stop production as demand for MacBooks dwindled.

As the report notes, TSMC finalizes its fabrication process by sending the wafer-processed products to Amkor Technology's Korean factory for packaging work. However, in January and February there were reportedly no products forthcoming, which also forced the package material parts company for M2 chips to stop supplying the usual materials.

The suspension is said to have continued through February, after which production of M2 series chips resumed, but they were "only half the level of the previous year," said the Korean-language report, quoting a person familiar with the matter.

Apple's revenue was down approximately 5% year-over-year in the first quarter, a steeper decline than had been expected by analysts as Apple grappled with iPhone supply issues in particular but which also saw declines in Mac and wearables.

iPad revenue was up 30% thanks to the launch of new M2 ‌iPad‌ models, but Mac revenue saw a notable drop because there were no new Macs released in the final months of 2022. Mac revenue was $7.7 billion, down from $10.9 billion in the year-ago quarter. ‌

During his Q1 2023 earnings call, CEO Tim Cook admitted that Apple faced a "challenging" situation in the PC market. "The industry is contracting," said Cook. "We have a low share but we have a competitive advantage with Apple silicon, so strategically we are well positioned within the market. But I think it will be a little rough in the short term," added the Apple chief.

Apple unveiled the M2 chip in June 2022, when it appeared in an updated 13-inch MacBook Pro and a new MacBook Air. In January 2023, Apple then added M2 Pro and M2 Max variants to its 14-inch and 16-inch MacBook Pro models, and also added M2 and M2 Pro chips to its Mac mini configuration options.

Apple's first custom processor, the M1, was announced in late 2020 and still powers Apple's 24-inch iMac, which was launched in April 2021. Almost a year later the Mac Studio was unveiled with Max and Ultra versions of the same chip.

An updated version of the iMac with the M2 chip is seemingly missing from Apple's plans, according to Bloomberg's Mark Gurman, and there is no word on if or when a refreshed version of the ‌Mac Studio‌ with M2‌ Max and ‌M2‌ Ultra chips will launch.

Article Link: Apple Halted M2 Chip Production in January Amid 'Plummeting' Mac Sales

 

[dantracht]

Plummeting is never a good word when it comes to mac sales.

 

[Kylo83]

because the new MacBook Pro was a terrible update and not worth it; apple stop with the minor updates year after year

 

[thiswasamisatke]

I love Apple silicon but I am finding the release cycle very confusing. I feel like the Pro/Max/Ultra chips need to come before the regular chip, otherwise you end up in the weird scenario where the lowest end Macs are running on newer chips than those at the highest end.

 

[Unggoy Murderer]

because the new MacBook Pro was a terrible update and not worth it; apple stop with the minor updates year after year

Are you expecting like a new "new" MacBook Pro every year or something? It's perfectly normal for OEMs to release major hardware revisions every few years with minor increments in between.

 

[spnc]

because the new MacBook Pro was a terrible update and not worth it; apple stop with the minor updates year after year

Exactly. No way I would buy a M2, knowing what's coming next. I guess a lot of people in my shoes are simply ignoring the M2.

 

[Cassady]

Is this not merely a case of exceptional sales of the M1, following the debacle that was the touchbar Intel laptops — coupled with the M1 iteration being so good, that fewer see the need to upgrade to the M2 versions?

Personally, it will be a long time before I find a need to upgrade my 14” M1 MBP. Surely my situation is not unique?

 

[tomstone74]

Still super happy with my 14" M1 Pro 10/16/32G/2TB Refurbished, with a decent discount back then. No need for me to move to something else in the next years, I guess. At least as long AppleCare is active.

 

[Leon Ze Professional]

Hopefully this means that M3 chips are on the cusp of being released into new products like the 15 inch Macbook Air?

 

[afd]

They are more than I can afford. Don't really want to spend more than £1000 then you've got to factor in £400 to upgrade RAM and SSD since you can't do it yourself any more.

 

[spnc]

Are you expecting like a new "new" MacBook Pro every year or something? It's perfectly normal for OEMs to release major hardware revisions every few years with minor increments in between.

Not every year but every two/three years would make more sense since the M2 just demonstrated how much of a failure it was.

I tend to buy less often, but at the right time if it makes sense. The should wait until end of 2023 or early/mid 2024 to release the MBP M3 with a clearly upgraded product which people will buy big time.

 

[boak]

I love Apple silicon but I am finding the release cycle very confusing. I feel like the Pro/Max/Ultra chips need to come before the regular chip, otherwise you end up in the weird scenario where the lowest end Macs are running on newer chips than those at the highest end.

Disagree. Newer does not mean better. High-end market cares way more about multi-core performance than single-core. It's not a weird scenario.

 

[apocalyarts]

I bought the M2 Air because I was waiting for a redesign of the Air and simply did not need a new machine when the M1 chips came out, but I know that almost everyone from my peers bought an M1 Pro MacBook and there's just no need to upgrade for them, problably for years to come. Apple would be better off increasing the upgrade cycle.

 

[ProfessionalFan]

There was no incentive to upgrade from M1 to M2 for the majority of people (everyone?) so this isn't surprising. If the CPU upgrade isn't going to be significant, the products need something, anything new to entice those M1 buyers. Otherwise you're only targeting people with pre-M1 machines.

I say that as someone with several M1 products.

 

[contacos]

well in the age of tech people being fired left and right, companies implementing hiring freeze, I can understand that the demand is dropping. Who is going to buy a 2k Mac just for „fun“ out of their own pocket

 

[boak]

I think M1 family catered to a huge pent-up demand?

 

[jlc1978]

It will be interesting to see how the industry's contraction ultimately plays out. Will Apple have a larger share of a smaller market, shrink with it; as well as what will replace the PC market? Is the future iPad devices that run MacOS on iCloud servers, much as MS is moving Windows to the cloud? Is the future the modern version of big iron and terminals; albeit with much smarter terminals?

The M1, as others also point out, likely satisfied a lot of pent up upgrade demand as well as attracted early upgraders. I was at my 3 year upgrade point and upgrading to the M1 was an easy decision. That said, I'm likely, especially with the new renewable AppleCare, to go longer than 3 years baring an unanticipated need for a more powerful machine or some real killer new feature.

 

[t0rqx]

Time to deliver quality products and not save on things that made the M1 great for Mac.

 

[spnc]

Is this not merely a case of exceptional sales of the M1, following the debacle that was the touchbar Intel laptops — coupled with the M1 iteration being so good, that fewer see the need to upgrade to the M2 versions?

Personally, it will be a long time before I find a need to upgrade my 14” M1 MBP. Surely my situation is not unique?

+1 here. The only reason I'd upgrade is if they release the M3 chip (3nm with 40 cores) that will be a lot more powerful than my late-2020 M1 and would make me think twice because I will need to extra power at some point, although I don't need it yet at this point and the M1 is already 'perfect' on this front to me.

Extra features such as 16TB SSD, no more notch, improved battery, FaceID, Thunderbolt 5, WiFi 7 (40 Gbps) etc. will eventually make me buy a new one but I don't think they're gonna be happening before another 3 year cycle, so I will probably get a M3/M4 or whatever this model will be called then, in 2025/2026.

 

[Alexwastaken]

Just got my request denied at work. Times are rough for everyone

 

[Kylo83]

Are you expecting like a new "new" MacBook Pro every year or something? It's perfectly normal for OEMs to release major hardware revisions every few years with minor increments in between.

The issue is the m2 as not worth it I would rather apple wait until a good update is ready; they release new ones with better hdmi well that could of been there for the old one it’s old tech

 

[dannys1]

As a seller I saw massive down turn in sales in December - the worst for 8 years - however this year is back to normal so far with the launch of the new machines. It's a slightly stagnant market the moment but nothing too harsh.

 

[threesixty360]

The idea should be to try to encourage Mac buying all year round without anyone stalling their purchase because of significant new technology is about to be released. No one should feel there is a wrong time to buy a product from Apple, especially not a MacBook.

The M series updates shouldn't really mean more than 10/20% improvement yearly. And Apple should not be expecting M1 owners to upgrade to M2 machines. Thats not realistic at all. Steady sales, not massive spikes is what every company should aspire to. Thats good business.

 

[Matt Leaf]

I think it was on Unbox Therapy where the guys were talking about what people are looking for in a slow economy, and that's value for money. Performance-wise, the Air can do most tasks outside of demanding Pro workflows. Even if folks do some creative projects every now and then, the Air is enough - and in some ways that competitive advantage of Apple Silicon is a shot to the foot, most folks just don't need a MacBook Pro anymore.

One thing I will say, is the loss of Bootcamp, coupled with growing interest in gaming on PC - even doing a build - I think this time around Mac folks are actually looking at the PC as a 'Pro' purchase - or at least, that's where that money is going, because the Mac can no longer scratch that itch for tinkerers and folks who like to dual boot. A lot of Mac users have become used to being able to dual boot for what feels like decades.

I know for me that's the case - the Air is a fantastic everyday laptop, great plugged into a screen and covers a lot of bases, but for gaming & other Pro workflows, for hobbiest computing, it's not hard to be looking elsewhere.

 

[curnalpanic]

Exactly. No way I would buy a M2, knowing what's coming next. I guess a lot of people in my shoes are simply ignoring the M2.

M3? But then M4 comes after that. Should I wait for that as well?