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Global Chip Shortage Could Force Apple To Cut iPhone Production: Report
14 Oct, 2021 / 05:44 AM / OMNES Media LLC

Source: https://me.mashable.com/

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The tech giant’s share prices fell as investors reacted to the news.

The ongoing global chip shortage has been affecting almost every industry, across the globe – from companies producing automobiles to personal computers, home appliances, and even toothbrushes – none have been spared.

Apple, despite being one of the largest manufacturers of consumer electronics in the world, seemed to comfortably weather the crisis. However, according to a new report by Bloomberg, the chip shortage may have finally caught up to the tech giant.

The company is projected to produce 90 million new iPhones in the last quarter of 2021. However, due to the chip shortage, the company is now expected to slash production by up to 10 million units, according to the report.

Apple has reportedly notified its manufacturing partners about the lower production total, as Texas Instruments and Broadcom are struggling to deliver the required number of components. Broadcom manufactures wireless components for the iPhone, while Texas instruments supply Apple with display parts.

The report comes just a month after Apple launched its iPhone 13 line-up, featuring high refresh displays and smaller notches. The line-up has received criticism for the lack of major improvements over last year's models.

This is the second time this year, that the chip shortage affected Apple. Early this year, Nikkei Asia also reported that the iPad production had also hit a snag due to chip shortages.

Apple’s shares tumbled by 1.2 percent soon after the report came out. While the shares of Broadcom and Texas Instruments also took a hit by one percent each. In June, Apple’s CEO Tim Cook had warned investors that the chip shortage could impact iPhone and iPad sales.

The situation also highlights the severity of the chip shortage. Apple enjoys greater purchasing power than any other consumer electronics manufacturer, and if Apple is having trouble sourcing components, that means smaller manufactures have very little chance.

The gaming community is also acutely feeling the effects of the chip shortage, with very little to no availability, and price gouging of next-generation consoles from both Sony and Microsoft, along with GPUs.