It's the process that starts miserable, not what you're building with them, then the yields generally get better to the point that often just as a process is being replaced it's getting close to 99.9% success - this is where binning comes from, the ability to make use of imperfect chips for market segmentation.
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Apple is Reportedly Facing a 'Massive Dilemma' With the MacBook Neo
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switz
Contributor
Folks, please remember that the Neo has more computing power than much of the equipment used in sending the gang to the moon the first time. We had to write in machine language to keep the code as small and tight as possible as lots of the equipment had only 64K bytes of memory of which the top 8kb was for the operating system.
The slop in coding today gives us MacOS being over 20GB.
The Neo would have been a super computer.....
The slop in coding today gives us MacOS being over 20GB.
The Neo would have been a super computer.....
jsavvy
macrumors 6502
They release a product that people want and now they're selling like hotcakes. I'm even thinking of picking one up for my kids to use. Good for Apple.
So you only ever buy the top part available at any time - you've only ever had say Intel i9's or AMD x99x chips?
ArtOfWarfare
macrumors G3
There is another option besides just selling out. Just space them out over time... if they can only sell ~12M before the next generation arrives, then just limit deliveries to 1M per month. If the backlog gets too long, customers will see it's a 2 or 3 or 4 month wait and either decide that's acceptable or not, and so the backlog will regulate itself.
Might cost Apple more in storage costs, they might lose some customers who decide to buy some other budget laptop that's available immediately, but also some customers might opt for a more expensive Apple model instead, and it probably enables cheaper shipping (ie, ship by boat or train or something... I think those are the cheapest ways to ship stuff, but with the tradeoff of being slower than planes or trucks, taking at least a week longer. I'm under the impression Apple usually prioritizes faster shipping and so goes with the more expensive trucks and planes.)
Might cost Apple more in storage costs, they might lose some customers who decide to buy some other budget laptop that's available immediately, but also some customers might opt for a more expensive Apple model instead, and it probably enables cheaper shipping (ie, ship by boat or train or something... I think those are the cheapest ways to ship stuff, but with the tradeoff of being slower than planes or trucks, taking at least a week longer. I'm under the impression Apple usually prioritizes faster shipping and so goes with the more expensive trucks and planes.)
That would be the base A18 chip, which likely has its own binned pile. Probably with a 4 core GPU. Perfectly usable in the base iPad.
It's been a model used in the industry for a long time.
Intel Core i3's are just i7's that had more manufacturing defects than an i5. It minimises waste, and makes things more affordable for everyone.
Note: this is a massive simplification, but at a basic level this is how it's worked for quite a while.
JPack
macrumors P6
Apple would need to know the exact number of chips after reliability testing through packaging. This is after the stresses of dicing, bonding, and encapsulation.
In my opinion, there is no chance these chips are intended for iPhone 16 Pro. If these are “leftover” chips, why would Apple wait so long to package them to know the final count?
sherwinzadeh
macrumors 6502
Simple solution: Add a $799 model with binned A19 Pro chips and 1TB of solution. That'll spread out the demand for a while.
Will Co
macrumors 6502a
True - they can blow fuses to irreversibly disable sections of a chip wherever they have designed in those fuses. So they could choose to partially disable perfectly good chips to "downgrade" them to the Neo spec, but those chips would have been healthy, and therefore chargeable to Apple. So that means less profit for each Neo where that happens. What Apple needs to maintain its profit margins is a larger supply of "faulty" chips that are good enough to make the Neo spec, but which cost them nothing.
switz
Contributor
Please note that the screen on the Neo is NOT one of the top specifications screens that exist. Thus a binned core is immaterial to the operation of the Neo and I would wager most customers are not rocket scientists and thus do not need the extra core.
My take is to accept lower margin per laptop with significant sales volume. The high acceptance of the new product is a great news.
The all-new MacBook Neo has been such a hit that Apple is facing a "massive dilemma," according to Taiwan-based tech columnist and former Bloomberg reporter Tim Culpan.
In the iPhone 16 Pro models, the A18 Pro chip has a 6-core GPU. During the chip manufacturing process, however, sometimes a CPU or GPU core can turn out to be faulty. Rather than discarding the leftover A18 Pro chips with only a 5-core GPU, Apple opted to use them in the MacBook Neo, as a way of optimizing its supply chain and costs.
These so-called "binned" chips with a 5-core GPU are effectively "free" to Apple, given that they otherwise would have been discarded.
Herein lies the dilemma.
In the latest edition of his Culpium newsletter today, Culpan said the MacBook Neo is selling so well that Apple's supply of the binned A18 Pro chips with a 5-core GPU will "run out" before the company is able to fully satisfy demand for the laptop.
Apple's initial plan was to have suppliers build around five to six million MacBook Neo units before ceasing production of the model with the A18 Pro chip, he said, but it sounds like demand is so strong that Apple might run out of A18 Pro chips to put in the MacBook Neo before the second-generation MacBook Neo with an A19 Pro chip is ready next year.
Apple is unlikely to mark the MacBook Neo as temporarily sold out, so it may be forced to take action, but profit margins might be affected.
A18 Pro chips are manufactured with TSMC's second-generation 3nm process, known as N3E, and Culpan said TSMC's N3E production lines are currently operating at maximum capacity. As a result, he said that Apple may have to pay a premium to restart A18 Pro chip production for the MacBook Neo, which would lower its profit margins.
Apple would have to disable a GPU core on these chips to ensure that they have only a 5-core GPU, like all other MacBook Neo units sold to date.
Alternatively, Culpan said that Apple could reallocate some of its chip production that was originally planned for other devices, but he said the cost would still be higher than what it paid for its initial batch of A18 Pro chips.
Culpan speculated that Apple could also opt to discontinue the $599 model with 256GB of storage, leaving the $699 model with 512GB of storage and a Touch ID button as the only configuration available. This is unlikely to happen any time soon, in our view, given how heavily Apple has been promoting the MacBook Neo's affordability.
Apple might also be able to move up the release of a MacBook Neo with the iPhone 17 Pro's A19 Pro chip, but that too would be a costlier option, at least until the company achieves a sufficient stockpile of binned A19 Pro chips with a 5-core GPU.
In any case, Apple could opt to keep the starting price of current and future MacBook Neo models at $599 and simply accept lower profit margins on the laptop, especially given that it attracts customers to the macOS and broader Apple ecosystem.
Two weeks after MacBook Neo pre-orders began last month, Apple's CEO Tim Cook said the Mac had its "best launch week ever for first-time Mac customers," suggesting that the MacBook Neo has been a massive hit. This news should not come as much of a surprise, as the MacBook Neo is the most affordable MacBook ever released.
All configurations of the MacBook Neo currently have a 2-3 week delivery estimate on Apple's online store in the U.S. and many other countries.
Article Link: Apple is Reportedly Facing a 'Massive Dilemma' With the MacBook Neo
But it is a hell of a lot better than the screens you'll find on competing machines in the same price bracket, and it isn't even close.
Neo-spec chips still cost Apple money, just not as much as a 16Pro-spec one, but only by a few USD - so they can pay full price, say $3 extra for a potentially perfect chip that's been blown down to a Neo-spec chip, but that way they get to sell another laptop, which easily pays for those few extra dollars.
Black_Mage
Contributor
iMac The Knife
Suspended
I never buy AMD, so no to that part of your question. But yes, I only ever buy devices with high end CPU's and GPU's.
klasma
macrumors G4
If they were tested just recently, then the question arises what Apple is using the unbinned A18 Pros for currently that came out of that testing. Unless I’m overlooking some product, they wouldn’t have any use for them at present. That makes it more plausible that the testing happened longer ago when there was still a use case for the unbinned version.
If, on the other hand, they do still have a use for the unbinned chips (maybe they are still making some new iPhone 16 Pros?), then it’s plausible that the etched wafers might be older remaining stock.
Happy_John
macrumors 68000
They're not faulty. Using binned chips is standard procedure. Why do you think intel offered so many variations of i3, i5, i7 chips over the years.
Accelerate the release of the Neo 2. It cant be that hard to just drop in the next SoC. I'm sure it's not zero-effort, but I'm sure they can do it.
Well a lot don't have the money to do that, and in a way they're subsiding you and I who like our high-end kit, it'd be much more expensive if that was all there was. Meanwhile you've got the M5's to buy!
iMac The Knife
Suspended
Yeah, I understand. I was mostly just kidding around anyway. I want everyone to have options, regardless of their budget. And, the Neo seems to be a great option for a lot of people.
Will Co
macrumors 6502a
The article states that the chips used in the Neo are effectively rejects which are not chargeable to Apple.
all this worthless speculation is based on a baseless assumption that there will be a shortage of A18 Pro chips some time in the future.
it’s not even a rumor.
it’s not even a rumor.