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Apple Battles Chip Shortage Amidst AI Demand Surge
30 Jan
Summary
- Apple forecasts 13%-16% revenue growth despite chip supply issues.
- Advanced node manufacturing for A-series and M-series chips is constrained.
- Rising memory prices impact Apple's March quarter more significantly.
Apple projects its total company revenue for the March quarter to increase between 13% and 16% year over year. This forecast accounts for anticipated constraints in iPhone supply during the period. The company's chief financial officer noted that these estimates reflect the best possible projections given the limitations.
CEO Tim Cook elaborated that the main bottleneck for iPhone production is not memory components, but rather the availability of advanced node manufacturing for its A-series and M-series system-on-chip (SoC) products. Apple relies on Taiwan Semiconductor Manufacturing Company for this crucial production.
Cook acknowledged that rising memory prices, driven by AI data center demand, will affect Apple. While the impact was minimal in the December quarter, it is expected to be more significant in the March quarter. Apple is exploring various options to mitigate these effects.
Apple also stated its gross margins are expected to be between 48% and 49% in the March quarter. The company's commitment to sourcing chips from the U.S. continues, with 20 billion chips sourced from the U.S. in 2025, exceeding its previous target.
