Global chip shortage could disrupt iPhone production, says report

“Apple, which procures OLED panels from Samsung, could also face disruptions in iPhone production.”

What you need to know

  • The world’s manufacturers are battling a global chip shortage.
  • A new report says that even Apple and the iPhone may not be safe from its reach.

A new report says that even Apple could be impacted by a global chip shortage because it relies on Qualcomm and Samsung for components in devices like the iPhone 12.

From Nikkei Asia:

The chip shortage that had slowed automobile manufacturing has now spread to the production of smartphones and personal computers, threatening to derail a post-pandemic economic recovery.

The shortage spurred by strong chip demand during the pandemic has been exacerbated by the shutdown of a Samsung plant in Texas following a winter storm. The chip fabrication plant responsible for 5% of global supply has been idled since Feb. 16, causing widespread repercussions through the supply chain.

Samsung’s co-CEO Koh Dong-Jin told shareholders at a meeting on Wednesday that there was a “serious imbalance” in the supply and demand of chips in the IT sector globally, and even Apple may not be safe.

As the report notes:

The supply crunch hitting Qualcomm will affect a wide range of smartphone makers that rely on the company for key components. Apple, which procures OLED panels from Samsung, could also face disruptions in iPhone production.

Earlier this month it was reported that Apple was cutting orders for all of its iPhones by 20% as it revised production estimates made in December. As the report notes, Apple may likely have been pre-empting component shortages, rather than anticipating demand. Whilst Apple might have done enough to avoid any major disruption to its supply chains, this latest report says it might not avoid the impact altogether.

The report follows news that Samsung may forego the release of a Galaxy Note altogether this year because of the shortage.

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