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Apple’s triumph over supply-chain shortage is a disaster

by on28 January 2022

Wall Street warns it is not good news

The Tame Apple Press has been praising Apple’s cleverness in overcoming the global chips supply-chain shortage, when it should be really concerned about the cost of Job's Mob's success.

The iPhone maker, which had warned three months ago that supply issues would dent its holiday-quarter revenue, posted record results largely boosted by sales of its premium phones. It sees an improving situation, if some remaining shortages.

But Wall Street Analysts have warned that this “success” has come at the expense of others in the industry

TECHnalysis Research chief analyst Bob O'Donnell said that most of the supply-constrained issues are over for Apple, but not necessarily for everybody else. 

Basically because of Apple’s tight legal arrangements with chip suppliers companies from electric automaker Tesla to wafer fabrication equipment supplier Lam Research have warned again that supply chain issues, which crippled several industries, would continue to limit production this year.

Apple’s chips cost more which makes them more lucrative for chipmakers to produce. The result is that Apple has an advantage and can procure components relatively faster than rivals. It can get a better service for more sophisticated chips.

The difference can be seen in Apple getting its paws on some of the older technology chips which the chipmakers are less interested in making. Apple Chief Executive Tim Cook chips used in Apple iPads, which saw a 14 per cent drop in revenue, use chips with older technology, and supplies of those older chips were particularly tight.

Cook said the constraints on the older chips, or nodes, were significant in the holiday quarter.

"Overall, we do see an improvement in the March quarter in terms of the constraints going down versus what they were in the December quarter," he said.

Tesla CEO Elon Musk this week said supply chain woes would limit manufacturing output in all company factories.

"So the chip shortage, while better than last year, is still an issue," he told analysts.

Semiconductor equipment maker Lam Research noted new supply challenges, with the Omicron surge adding more disruption to freight and logistics operations. The company said it was seeing scarcity of certain components and parts, including semiconductors, a few weeks into 2022.

Analysts and market leaders in the semiconductor space held out hopes that supply issues would ease later this year.


Last modified on 28 January 2022
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