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Apple Says Chip Shortage Set to Further Affect Growth

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Apple, which took about a massive $6-billion hit in its September quarter owing to supply constraints, has said that the festive quarter may see a larger chip shortage affecting the entire industry.

In an earnings call late on Thursday, Apple CEO Tim Cook said that the primary cause of supply-chain-related shortages would be the chip shortage in the ongoing quarter.

“By the time we finish this quarter, the constraints will be larger than the $6 billion that we experienced in Q4 (July-September period),” he told the analysts.

Apple faced about a $6-billion hit in the supply constraints, and it affected the iPhone, the iPad, and the Mac devices in its Q4 earnings.

“There were two causes for this in Q4. One was the chip shortages that you’ve heard a lot about from many different companies throughout the industry. And the second was Covid-related manufacturing disruptions in Southeast Asia,” Cook informed.

Cook said that the Covid disruptions have improved materially across October to where we currently are.

“So for this quarter, we think that the primary cause of supply-chain-related shortages will be the chip shortage. It will affect, it is affecting, I should say, pretty much most of our products currently. But from a demand point of view, demand is very robust,” the Apple CEO mentioned.

The chip shortage is happening on legacy nodes.

“Primarily, we buy leading-edge nodes, and we’re not having issues on leading-edge nodes. But on legacy nodes, we compete with many different companies for supply and it’s difficult to forecast when those things will be normal,” Cook elaborated.


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