From Bloomberg’s “Chip Shortage Spirals Beyond Cars to Phones and Consoles” posted early Monday:
Auto and electronics makers that cut back drastically in the early days of the outbreak are now rushing to re-up orders, only to get turned away because chipmakers are stretched to the max supplying smartphone giants like Apple Inc.
This week, Qualcomm Inc.’s Cristiano Amon, head of the world’s largest mobile chipmaker, flagged shortages “across the board,” citing the industry’s reliance on just a handful of players in Asia…
Carmakers appear in direst straits and have spurred the U.S. and German governments to come to their aid — General Motors Co. this month was forced to mothball three North American plants and Ford Motor Co. is bracing for a 20% drop in near-term output.
But more industries have lately copped to shortages, emphasizing how Covid-19 and a boom in a new breed of 5G-ready smartphones like the iPhone 12 is exacerbating a shortage of capacity plaguing the entire consumer industry. Chip shortages are expected to wipe out $61 billion of sales for automakers alone, but the hit to the much larger electronics industry — while tough to quantify at this early stage — could be far larger.
My take: When the chips are down — and automakers are shuttering factories — will Apple’s massive cash flow and locked-up production capacity look like unfair advantages?
The tsunami wave of pre-orders yet-unbooked high end models will hit the next quarter’s iPhone sales number and ASPs like a rocket one they’ve shipped and been booked. Higher margins too and MacBook sales boosted too. I”m not worried long term. Short term there’s just a jungle of Japanese knotweed to plough through thanks to witless speculation and gung-ho reporting which could muddy the water until the next report. TP raises seem unlikely at this point given the car-hysteria popping and supply chain rumours about to start appearing in such-trusted-resources as Digitiimes and Business Insider.
Maybe. It could also reinforce the necessity for his $1.9 Trillion relief package.
But this will cause corporations to take a harder look at their global supply chains and the risks of “just-in-time”.
I thought it; You thought it. Therefore, someone in the financial media or on the hill could say it but, at the end of the day, good credit, reliable payment in scale, and excellent vision/planning isn’t actionable.
When (no longer if) Apple enters the AV/EV market, they will have many other “unfair advantages”.
Jan 14, 2021, WSJ reports that TSMC increased CAPEX for 2021 by about 47% to $25B – $28B. Good news for Apple and TSMC.
Considering how many chips and sensors there are in a car, Apple, with TSMC’s help, gains an unbeatable advantage in ‘beyond just battery powered’.
There’s nothing inherently unfair in business, Either you think faster, better, farther out, see opportunities where others retreat, lead instead of follow, capitalize on instead of shrink, or you don’t. Apple takes calculated measures, not risks, because by the time the decisions are made, the risk is minimized. Even the iPhone 12 mini, even if it proves to be a sales disappointment, will be a positive. Why? All those scarce semiconductors destined for mini production can now be moved over to higher margin larger iphone 13 models and Apple saves on the small OLED display.