The technological world has been shaken by a phenomenon that has affected its operations, launches and new products. It’s about the global chip shortage, the effects of which began to be felt in late 2020. While many businesses have been affected in various ways, Apple managed to dodge the bala of rarity quite fluently.
The lack of news on the impact of this situation on Apple’s operations is explained by the the emergency measures you have deployed. Measures that can be summed up in five words: down payments and large orders.
An accelerating demand for chips that production barely follows
The semiconductor crisis is the result of a perfect storm. The one in which the consumer electronics industry she is not the only one affected. Any area where microchips are part of the chain has been affected. Automobiles and even household appliances such as refrigerators or washing machines are using chips with increasing frequency and abundance.
The pandemic has accelerated the acquisition of processors of all kinds, from computers to tablets and phones. Telecommuting was the time when many users and businesses have decided to renew or acquire new equipment to develop your work remotely. And it added tension to a supply chain that was already on edge.
Increasing chip manufacturing capacity is not easy at all. In fact, very large investments are needed to build state-of-the-art factories. Their construction in turn requires considerable time and planning. take a high risk when it comes to recovering the investment. Therefore, the chip manufacturing capacity simply cannot keep up.
Increasing manufacturing capacity will take time, prolonging shortages in the medium term
The consequence is that manufacturers have to make tough decisions. Among them is the establishment of quotas for your customers to avoid unnecessary accumulation of inventory or prioritization of more profitable premium tokens. These are found in computers and especially the latest generation smartphones and would harm other cars, household appliances and other less efficient consumer electronics.
Volume, advance and advance payments to secure Apple’s supply
At the earnings conference last Tuesday, Apple first mentioned the global chip shortage to questions from an analyst. The company was quite optimistic about the current situation, assuring that high-end chips for iPhone and iPad were not a problem, whereas in previous generations they had seen some shortage, although not to be alarmed.
This matches what we saw in the previous section, where the A14 and M1 chips in the 2021 iPhone 12 and iPad Pro are the most advanced in the industry. Apple is leading its suppliers to prioritize apple chips thanks to a combination of factors:
- Apple has always been a good customer at buy components wholesale, accordingly receiving sales discounts.
- Payment for orders is made in advance, secure manufacturing space and deliveries when needed.
- Apple has even gone so far as to invest with its suppliers to strengthen manufacturing capacities, develop technologies and thus ensure supply.
As we can see, this is something that goes beyond putting a very luscious heel on the table. It is something that is more related to security and tranquility this may allow you to work with a client like the one in Cupertino. If we take a look at Apple’s finances, we’ll see a change in Apple’s latest Q3:
- Q3 2017 purchase obligations: $ 23,400 million.
- Q3 2018 purchase obligations: $ 31.4 billion.
- Q3 2019 purchase obligations: $ 29.8 billion.
- Purchase obligations in the third quarter of 2020: $ 30.3 billion.
- Purchase obligations in Q3 2021: $ 38.2 billion.
Compared year over year, the jump from the third quarter of 2020 to the third quarter of 2021 is evident. 7,900 millions more dollars in purchase obligations that cannot be canceled without heavy penalties. Everything indicates that thanks to these tactics, Apple will launch the iPhone 13 next September.