Apple iPhone 12 Chip Shortage Raises Concerns

Apple is one of the leading smartphone manufacturers worldwide. They are known for their high-end, premium products and have recently released the iPhone 12. The phone was defiantly a major hit in the market but it seems there are some hindrances to be expected in its production.

The Global Shortage

The pandemic has impacted every single industry hence there have been massive discrepancies between supply and demand. Massive shortages of raw materials and limited workers have caused hysteria all over the world. Consequently, demand and supply chain restrictions due to the pandemic are causing a global chip shortage that affects almost every industry that requires semiconductors. It seems that Apple’s iPhone 12 production could take a major hit as well.

A representative from Microsoft claims that the shortages will continue all through the first half of 2021 whereas, AMD’s CEO, Lisa Su adds that this should be seen as a constant occurrence throughout 2021. Additionally, it is believed that the entire smartphone industry will face this roadblock however it is too soon to present a quantified report.

Apple has faced a shortage of both power management chips and LiDAR components since the last year and it could get even worse. Even, Apple’s advantages in negotiating priority with many of its suppliers won’t come in handy. According to a report by Bloomberg,

The first hints of trouble emerged in the spring of 2020. The world was in the early throes of a mysterious pandemic, which first obliterated demand then super-charged internet and mobile computing when economies regained their footing. That about-face in months laid the seeds for potentially the most serious shortage in years of the semiconductors that lie at the heart of everything from smartphones to cars and TVs

Apple, a major Qualcomm customer, said recently that sales of some new high-end iPhones were hemmed in by a shortage of components.

“The virus pandemic, social distancing in factories, and soaring competition from tablets, laptops, and electric cars are causing some of the toughest conditions for smartphone component supply in many years,” said Neil Mawston, an analyst with Strategy Analytics. He estimates prices for key smartphone components including chipsets and displays have risen as much as 15% in the past three to six months.

In Conclusion

Apple is in a relatively better position than most. The tech mogul can demand favorable contract terms from suppliers if the worst-case scenario occurs. Unfortunately, there is no easy fix since the semiconductor industry is running at maximum capacity and the only way to increase production is to build new plants that will take years.

This is not the only problem the Silicon Valley tech giant is facing, ever since it announced “AppTrackingTransparency”, to limit data sharing, it has been under fire from Facebook. The two tech moguls are in one of the biggest tech feuds of the century.