Apple Supplier Foxconn Expects Shipments to Be Impacted by Global Chip Shortage

[MacRumors]

Apple supplier Foxconn today said that it expects shipments to be cut by 10 percent due to the global chip shortage, reports Nikkei. In an earnings call, Foxconn chairman Young Liu said that the first two months of the quarter were okay, but the company "started to see changes happening this month."

Foxconn did not mention Apple specifically, but it is a major Apple supplier and this perhaps suggests that the ongoing chip shortage will ultimately impact Apple. Foxconn is responsible for much of the assembly of Apple's iPhone models, but it does work with other companies like Google and Microsoft.

Apple has more resources than many other smaller companies that have already been hit by chip shortages, but it could run into trouble sourcing supplies for upcoming devices as the chip issues continue. Foxconn expects the shortage to extend into the second quarter of 2022.

Foxconn will ship 10 percent fewer products than planned, but "the impact on the orders that were secured a long time ago is rather limited," so it's not clear if and when Apple might be affected.

The ongoing chip shortage was caused by supply chain issues that arose during the global health crisis and weather-related events like the freeze in Texas that shut down Austin chip plants. As chip factories struggled to keep up with standard outputs during the pandemic, demand surged as people purchased devices for an at-home lifestyle, leading to higher prices. Electronics companies bought up all available supply, and chip makers are running at capacity.

With manufacturing capabilities limited, chip makers have focused on higher-end chips for smartphones and game consoles rather than the more affordable, less-advanced and less profitable chips used for everyday devices such as cars.

Because of this focus on higher-end manufacturing, the car industry has been most heavily impacted so far, and manufacturers like General Motors and Ford have had to slash production, but major tech companies could also be affected going forward.

Article Link: Apple Supplier Foxconn Expects Shipments to Be Impacted by Global Chip Shortage

 

[im2fast4u]

Who’s going to chip in

 

[JoshuaBru]

I wouldn’t be surprised if Apple has a contractual ‘front-of-the-line’ deal when it comes to issues like this. I doubt they’ll feel the impact of this but they’ll definitely use it to drum up hype for the new iPhones

 

[Doomtomb]

iPhone 13 won’t be that great anyway

 

[ElectricPotato]

"the freeze in Texas that shut down Austin chip plants"

Perhaps the plant owners will petition for common sense regulation to make the Texas grid reliable.

 

[erthquake]

iPhone 13 won’t be that great anyway

It will be for me coming from a Xs since I can get the best cameras in the non-Max Pro.

 

[Macintosh IIvx]

Contradicts the claim last week that they wouldn't be impacted by it.

 

[d5aqoëp]

iPhone 13 won’t be that great anyway

Small notch, 120hz screens on Pro, Always on LTPO displays, bigger batteries are enough for me.

 

[mnsportsgeek]

Everyone's impacted. Whoever says they aren't is only saying so publicly while employees work to minize the impact.

 

[now i see it]

ok then I'll skip this year. Thanks for the warning

 

[mtneer]

I thought Apple has had first dibs on TSMC leading node fabs. Can they not just use those fabs to manufacture anything that their supply chain needs to be not impacted? Something does not add up here.

 

[subi257]

iPhone 13 won’t be that great anyway

But you'll get one anyway...right?

 

[1258186]

Inevitable. Everyone is being affected by this and will continue to be until manufacturing capacity it’s dramatically increased.

 

[Sasparilla]

I thought Apple has had first dibs on TSMC leading node fabs. Can they not just use those fabs to manufacture anything that their supply chain needs to be not impacted? Something does not add up here.

Pretty sure they do as they seem to front alot of the funds used to build the factories they use for Apple things, if memory serves. It's not just the TSMC CPU that goes to make an iPhone though....there's still lots of other things and chips in there. Whether that will impact Apple much we'll see. Foxconn makes stuff for alot of folks and may have been talking about other clients.

Is making me question whether to wait on the Apple Watch 7 or go for the 6. Was happily in the wait for the 7 group, but doesn't sound like things are going to get better at this point.

 

[az431]

Contradicts the claim last week that they wouldn't be impacted by it.

bull--****. FoxConn never said they "wouldn't be impacted" by chip shortages.

Foxconn chairman says expects "limited impact" from chip shortage on clients - ET Auto

Chip Shortage: The global spread of COVID-19 has increased demand for laptops, gaming consoles, and other electronics. This caused chip manufacturers to reallocate capacity away from the automotive sector, which was expecting a steep downturn. Car manufacturers such as Volkswagen AG, General...

auto.economictimes.indiatimes.com

 

[az431]

I thought Apple has had first dibs on TSMC leading node fabs. Can they not just use those fabs to manufacture anything that their supply chain needs to be not impacted? Something does not add up here.

Where in the article does it state that Apple is affected?

 

[Populus]

Small notch, 120hz screens on Pro, Always on LTPO displays, bigger batteries are enough for me.

Touch ID would be the selling point for me.

 

[mtneer]

Where in the article does it state that Apple is affected?

".....this perhaps suggests that the ongoing chip shortage will ultimately impact Apple. Foxconn is responsible for much of the assembly of Apple's iPhone models,...."

 

[howdy-doody]

“With manufacturing capabilities limited, chip makers have focused on higher-end chips for smartphones and game consoles rather than the more affordable, less-advanced and less profitable chips used for everyday devices such as cars”

huh? Cars are easy. Autonomous driving, ADAS and xEV, nothing to it.

yes, Apple has MFN agreements with their suppliers. And even though this includes TSMC, there are many suppliers of chips in those phones other than TSMC. Of course Apple is impacted. My guess is this why there was no March event too. No fun to introduce a hot new product that your customer base can’t get

 

[innovationwho]

I don’t believe any of this “shortage” claims from any company.

 

[ArPe]

Tell those stupid crypto people to stop using millions of chips to the exact same calculations. Wasting all the silicon and consuming 2-3 countries worth of electricity to do the same work that can be done with 99% less amount of processors.

These people are just being greedy parasitic death cult in a pyramid scheme designed to get more dollars from the next sucker who buys in.

 

[GeoStructural]

I wouldn’t be surprised if Apple has a contractual ‘front-of-the-line’ deal when it comes to issues like this. I doubt they’ll feel the impact of this but they’ll definitely use it to drum up hype for the new iPhones

They probably do, back when Steve was alive and CEO, Tim Cook was tasked on securing Lithium first for Apple.

 

[Manatee]

These aren’t the chips that are being injected into people with the COVID vaccine, so the shortage is surprising.

 

[erthquake]

“With manufacturing capabilities limited, chip makers have focused on higher-end chips for smartphones and game consoles rather than the more affordable, less-advanced and less profitable chips used for everyday devices such as cars”

huh? Cars are easy. Autonomous driving, ADAS and xEV, nothing to it.

Those aren't the chips that are limited. It's the older process nodes that are used things like fuel management.

 

[jz0309]

The shortage is not with TSMC 5 or 7nm chips but some of the other, more mature process nodes... there are still plenty of those chips in the iPhone, even the 13...