Counterpoint: Apple iPhone is the least affected by processor shortages

From “Semiconductor Shortages Hitting Smartphone Industry Hard; Counterpoint Lowers H2 2021 Shipment Forecasts” posted Thursday:

apple tsmc counterpoint resilient According to Counterpoint Research’s latest Global Smartphone Quarterly Shipment Forecasts, total units shipped for 2021 are expected to grow by only 6% annually to 1.41bn units; Counterpoint had previously called for 9% annual growth to 1.45bn units.

The smartphone industry was set for a strong rebound this year after COVID-19 had hit the market hard in 2020. Smartphone vendors placed large component orders from the end of last year, and consumer demand coming from delayed replacement purchases buoyed the market in the first quarter. However, some smartphone OEMs and vendors are reporting they had only received 80% of their requested volumes on key components during Q2 2021, and the situation seems to be getting worse as we move through Q3 2021. Some smartphone makers are now saying they are only receiving 70% of their requests, creating multiple problems. Counterpoint Research believes 90% of the industry is affected and this will impact the second half forecast for 2021.

Tom Kang, Research Director at Counterpoint Research commented, “the semiconductor shortage seems to affect all brands in the ecosystems. Samsung, Oppo, Xiaomi have all been affected and we are lowering our forecasts. But Apple seems to be the most resilient and least affected by the AP [application processor] shortage situation.

My take: I read somewhere that Apple helps fund the construction of factories for its suppliers and in return gets first crack at their output. A quick search turns up this and this and this and thjs, but not exactly what I was looking for.

5 Comments

  1. Apple definitely funds some suppliers, especially when it comes to pricey custom-built factory equipment for producing glass, metal or other components. These arrangements have emerged in lawsuits and other leaks. Lately the issue seems to be getting this equipment delivered. Key components in the chip production process are made in the Netherlands & Germany. According to the Freightos index, “the median cost of shipping a standard rectangular metal container from China to the West Coast of the United States hit a record $20,586, almost twice what it cost in July, which was twice what it cost in January.” Washington Post. 9/30/21 + Dollar Tree CEO said so during Quarterly call.
    Truck driver shortages in most nations, massive rail backlogs and even shortages of the trucks, rolling stock and shipping containers themselves. Still too many ships off LA, waiting to unload. Finally, international & domestic air freight rates per ton are skyrocketing. Time to invest in barges, that’s all that remains.

    2
    October 1, 2021
    • Gregg Thurman said:
      I think the stink surrounding shipping all started when that container ship ran aground in the Suez a few months back. The time it took to free it caused a massive delay in getting product through the canal and onto its destination and freeing up containers and container ships, starting a ripple effect in the whole transportation system. This is because JIT (Just In Time) deliveries weren’t just in time and clogged departure points awaiting containers and container ships that were backed up behind the Suez canal.

      Throw in some extra consumer demand for product and you’ve got a disaster on your hands.

      1
      October 1, 2021
  2. Fred Stein said:
    When Apple reports Q4, we’ll get a useful perspective on this topic. Hopefully that reduces the angst in the market.

    Thomas, thanks for the info about freight. At Q3, Tim Cook complained about freight charges. I thought he was just being facetious.

    More seriously, Apple will withstand all the supply chain issues better than anyone; And come out stronger as a result.

    2
    October 1, 2021
  3. Fred Stein said:
    Again, Apple demonstrates anti-fragility. In this case, it’s all the supply chain issues. Not only does Apple manage it better, Apple’s inherent higher margins mean that it is less impacted by increases in COGS. PC and Android clone makers don’t have that luxury.

    4
    October 1, 2021
  4. Ken Cheng said:
    First time I can recall that Apple helped suppliers was way back when Apple launched their first unibody MacBook back in 2008 or so. If memory serves, and it may not, they supposedly bought 1,000 Fanuc robots, to do the CNC milling, for Foxconn to use. May have been the largest single order of automation, at the time.

    Interestingly, Fanuc is probably the biggest supplier of industrial robots for the automotive industry, so if Apple needs to buy industrial robots for whomever they contract with, they have that business relationship already.

    1
    October 1, 2021

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