The Threat of Chip Shortage after Record Highs in the June quarter
Top Apple Stock News: On July 27th, Apple announced its record post-quarter numbers for June, dominantly thanks to steadily increasing demand for iPhone sales over the past year. Reports from CNN Business say that the company’s sales have increased by 50% in the past year bringing their total iPhone revenue to $39.6 billion. Apple reports its quarterly revenues increased by a significant amount of almost 36% percent during the last quarter to $81.4 billion dollars, an enormous increase of $8 billion greater than the expected revenue for the quarter.
However, according to Rumors, Apple and other similar companies like Tesla may be constrained by semiconductor shortages for the 3 month period ending in September. This news comes unfortunately as Apple plans the release of their new line of iPhone in the fall, thus leading to the company’s slower growth in the next quarter compared to a large uptick of 36% percent in the last quarter. Patrick Moorhead, the President of Moor Insights & Strategy stated that when Apple does not have a supply agreement they will bend over backward to make agreements with the supply company, to guarantee that they receive the parts they need. That said, even with such dedication, the Apple company can only do so much. The growth in revenue from the last quarter showed that Apple was using all of its resources from suppliers. And analysts believe that there is no amount of investment that can alter the supply they have in quarters 3 and 4.
Apple’s Supplier Prepares to Expand its Production Capacity
Macrumors reported that Apple chip supplier TSMC plans to open a new factory by 2024 in Hsinchu, Taiwan which is expected to be a key component in the manufacturing operations of Apple products. The company plans to follow a timeline of starting construction in early 2022 and installing equipment for use in 2023 to prepare for launch in 2024. Analysts predict that if Apple keeps the same names for their chips the first 2nm Apple chips produced in their new facility will be the A18 or the M5 chip. TSMC is reportedly one of the largest, most advanced manufacturing companies in its industry-beating other competitors such as Intel incorporation in their production abilities, maintaining an advantage on supplies while many other companies struggle to get the necessary parts they need. The A14 and M1 chips were released by Apple last year and were the first chips to be manufactured using the company’s new 5nm fabrication technology. Rumors hypothesize that Apple has already instructed its supplier TSMC to order a significant supply of 4nm chips to get a head start on production from 2022 and plans to follow the same routine with the 2nm chips in 2024.
Even better, TSMC is expanding its facilities to be able to ramp up the production of Apple products. The company has plans to build an additional 5nm chip facility in Arizona to meet the large demand and possibly plans to expand its 28nm factory in Nanjing China. In the future, TSMC could be open to the prospect of opening new factories in Germany and Japan to have even more ability to cope with demand.
Why is it important for Apple to maintain its competitive edge? Semiconductor chips are such a vital part of electronic development and are constantly being used by smaller electronics companies that improve their performance and their processing on electronic devices. If Apple does not stay ahead of the market in terms of chip production, it will not be able to compete with smaller innovative companies.
Apple Stock News – Apple Partners with NBC Universal to Share Olympic Content
News reports state that Apple has unleashed a new partnership with NBC universal to make it easier for fans in different time zones to tune into the games. The company hopes to develop daily Olympic recaps as a part of their news app, audio reports, and records of medals to help the viewers keep track of the games. While many of these features are offered by the NBC Sports app as well, many say it is hard to navigate as there are so many sports and only so much streaming ability, so users believe that this Apple partnership will complement the app experience. Apple’s reporting of the Olympic events includes unique features that allow users to view a schedule of every Olympic event by sport and even set reminders to ensure you never miss an event.