While companies like Ford and other automakers suffer bitterly from the lack of semiconductors, the technology company celebrates notable sales thanks to its iPhones, although it is also affected. What can you expect to overcome the bottleneck?
Sign up for our newsletters
On the same day that Ford Motor Co said it could only produce half of the cars envisioned due to global chip shortages, Apple Inc announced extraordinary quarterly profit as smartphone and computer sales skyrocketed, and shortages of Microprocessors had only a small impact on their business.
The proven results show how major players in the electronics industry, accustomed to long time horizons in chip production, have largely avoided major shortages due to shortages. Automakers and their suppliers, with “on the spot” production lines that they can more easily modify to produce different parts, have not been able to escape.
Apple said it would lose between $ 3 billion and $ 4 billion in sales this quarter due to the shortage of supplies of some old chips.
Even so, that represents only a small percentage of the Apple’s projected sales of $ 68.94 billion for the third fiscal quarter, according to Refinitiv revenue estimates, compared to a whopping 50% production hit for Ford.
German automaker Daimler also warned last week that the chip shortage would likely drag into next year. The supply bottleneck threatens to derail the country’s fragile economic recovery.
Ford CEO Jim Farley cited a March fire at a Renesas Electronics Corp plant in Japan as a key factor in its chip shortage.
But some of the problems for Ford and other automakers are the result of their own decisions. Many cut back their orders a year ago when the pandemic hit, then fell short when demand for cars rebounded much faster and stronger than anticipated.
Farley offered a grim picture Wednesday, saying that while the company was working “24 hours a day, 7 days a week” to fix the problems, “there are more times of whitewater ahead.” The difficulties could persist until 2022, he added.
Apple, which is famous for its supply chain management and has more purchasing power than any other companyIt has so far avoided the problems of meeting growing demand in part by using its reserves, Chief Executive Tim Cook told investors on a conference call Wednesday.
Trouble acquiring chips made with old-generation technologies will catch up with Apple in the current quarter, Cook said, noting that other industries also use those chips. It didn’t specifically cite automakers, but many of its components are based on that earlier-stage technology.
Apple expects the problems to hit mostly iPads and Macs, two product lines that have sold well as work-from-home tools during the pandemic, but whose revenue is a fraction of that of Apple’s dairy cow, the iPhone. Ford, by contrast, faces production stoppages of its most profitable model, the F-150 pickup.
The uneven impact of the chip shortage was evident in the results of mobile phone microprocessor supplier Qualcomm Inc announced on Wednesday: The company said business was booming due to strong demand for smartphone processors and 5G communications chips. .
Mobile phone processors do not suffer from the same kind of manufacturability shortages as automotive chips because they are made with more advanced production technology, in which chipmakers have invested heavily in recent years. However, mobile phones need some older technology chips in addition to their advanced processors.
Samsung Electronics also announced strong results and said it expected smartphone sales to suffer in the current quarter due to chip shortages. But earnings from its microprocessor division are expected to be strong.
In cases where advanced chip production technology faces bottlenecks, semiconductor companies are finding some ways to mitigate them.
Advanced Micro Devices Inc raised its annual sales targets on Tuesday, and CEO Lisa Su said the company saw no problems securing the supplies needed to meet targets.
To address a shortage of so-called “substrates” – a substance used to help put delicate silicon chips into stronger packaging so they can be placed on circuit boards inside electronic devices – he said. AMD invested money for its vendors to guarantee dedicated capacity.
“We are a bigger part of our suppliers’ businesses, and we are looking for opportunities to help our partners get the capacity we need,” Su told Reuters in an interview. “We started doing it last year and we are going to continue.”