Nikkei Does Deep Dive Into Apple's 'Nightmare Before Christmas' Supply Chain Issues

At the beginning of October when device production typically ramps up, Apple cut iPhone and iPad assembly for several days because of supply chain constraints and "restrictions on the use of power in China," reports Nikkei.

iphone 13 pro max display bleen
In a detailed report on Apple's ‌iPhone‌ production woes, Nikkei says that Foxconn, Pegatron, and other Apple suppliers ramped down on production for the first time in more than a decade, with workers getting time off rather than overtime hours as is typical.

"Due to limited components and chips, it made no sense to work overtime on holidays and give extra pay for front-line workers," a supply chain manager involved told Nikkei Asia. "That has never happened before. The Chinese golden holiday in the past was always the most hustling time when all of the assemblers were gearing up for production."

According to Apple CEO Tim Cook, supply constraints around the time of the ‌iPhone‌ launch cost Apple more than $6 billion. Cook cited chip shortages as one of the reasons for the supply issues, and while Apple uses leading edge nodes that are not affected by ongoing issues with chip availability, other manufacturers that create components for Apple devices have been impacted.

October reports said that Apple cut its 2021 ‌iPhone‌ production goals by more than 10 million units after Broadcom and Texas Instruments were unable to deliver enough components. The lack of even a single tiny component for the ‌iPhone‌ can impact production, and there are a lot of moving parts for Apple to deal with.

Nikkei did a deep dive into Apple's supply issues, interviewing more than 20 industry executives to see what went wrong. Apple reallocated components from iPads and older iPhones like the iPhone 12 to the new iPhone 13 models, but production was still 20 percent short of where Apple wanted to be because of power restrictions in China, lockdowns in Vietnam and Malaysia, and supply bottlenecks caused by skyrocketing demand for chips.

The reallocation hit ‌iPad‌ production hard and Apple produced 50 percent fewer devices than planned, with shortages on the tablets lasting well into November. With many ‌iPad‌ models in short supply, customers who order now won't be able to get a device in time for Christmas as delivery already extends into January.

According to Bloomberg, Apple recently informed its suppliers that interest in the ‌iPhone‌ is slowing ahead of the holidays, which could be due to the long wait times for new devices in September and October. Apple planned to make up for the supply constraints in early 2022 when manufacturing issues were ironed out, but Bloomberg claims Apple may not end up getting the necessary orders from customers.

Sources that spoke to Nikkei painted a different picture, and said that Apple has asked suppliers to reaccelerate ‌iPhone‌ production in November, December, and January. An Apple component supplier told Nikkei that Apple has reassured them that demand has persisted and that Apple has postponed orders to a later period because of supply constraints, so it's not clear which take is accurate.

Nikkei's full exploration into Apple's supply chain and what led to the company's current situation with chip shortages and production delays is well worth reading.

Top Rated Comments

SonOfaMac Avatar
7 months ago
Even Apple with its world leading logistics and planning is not immune from the current shortages.
Score: 5 Votes (Like | Disagree)
GMShadow Avatar
7 months ago

With many iPad models in short supply, customers who order now won't be able to get a device in time for Christmas as delivery already extends into January.
Has for a little while, honestly. I'm mid January on an engraved 256GB Purple Mini 6, but non-engraved was only a few days quicker, and I ordered in November.

I still check the order status daily hoping for some kind of miracle. :D
Score: 5 Votes (Like | Disagree)
dannys1 Avatar
7 months ago

Sounds like stock manipulation or a slow news day so let’s make up a story about one of the world’s biggest companies to get clicks.
As someone who runs an Apple business I can guarantee you it's not made up - the supply issues are an absolute nightmare at the minute.
Score: 4 Votes (Like | Disagree)
tomsop Avatar
7 months ago
Here is the solution - we all need to as a society take a break at this pace of over consumption - we deal with the supply contstraints by reducing our own demand. It will balance out if we change our behavior but will persist until it is so annoying and disheartening that price and delay cause this to happen naturally anyway.
Score: 3 Votes (Like | Disagree)
Think|Different Avatar
7 months ago
No end in sight, sadly. And don't forget – this is affecting everyone.
Score: 3 Votes (Like | Disagree)
ThunderSkunk Avatar
7 months ago
In other news, we had a drier season than expected and everyone said all our crop yields would be down, and now all our crop yields are down. Our reporter interviewed twenty farmers, demanding to know why bad things happen and everything isn't as spectacular as some shareholders somewhere imagine it could possibly be 100% of the time.

Jeez.
Score: 2 Votes (Like | Disagree)

Related Stories

ipad mini 3

Supplies of Apple Products to Improve in March Quarter

Thursday January 27, 2022 2:10 pm PST by
Apple faced significant supply constraints across all devices during the first fiscal quarter of 2022, but product supplies are expected to improve in the March quarter, Apple CEO Tim Cook told The Wall Street Journal ahead of today's earnings call. "We saw supply constraints across most of our products," Mr. Cook said in an interview Thursday as the company released its results. "We're...
iphone 13 pro max display bleen

Apple Supplier BOE Facing iPhone Display Production Issues Due to Chip Shortages

Thursday February 17, 2022 5:22 pm PST by
Apple supplier BOE is having issues producing the OLED panels that are used in iPhones due to the ongoing global chip shortage, reports The Elec. The shortage will impact production "this month and next month," according to the site's sources. BOE gets its display driver ICs for Apple's iPhone display panels from LX Semicon, but LX Semicon's production is falling short of the target goal....
AppleVsFoxconn Feature 2

Apple Supplier Foxconn Forced to Suspend Operations in Shenzhen Due to Lockdown

Monday March 14, 2022 2:12 am PDT by
Apple's leading supplier, Foxconn, has been forced to suspend operations in Shenzhen, China, following a city-wide lockdown that sees nonessential businesses close, public transportation halted, and residents advised not to leave their home unless for essential activities only. As Nikkei Asia reports: Shenzhen is home to major tech companies such as Huawei, Oppo and TCL, and is also one of ...
iPhone 13 Dummy Thumbnail 2

Apple Brings China's Luxshare Precision into iPhone 13 Supply Chain to Meet Production Targets

Wednesday August 4, 2021 12:19 am PDT by
Apple is tapping more Chinese suppliers as it seeks to meet ambitious targets for iPhone 13 production, according to a new report by Nikkei Asia. Apple is set to produce between 90 million and 95 million iPhones through January, according to a previous Nikkei report, and China's Luxshare Precision Industry has won 3% of orders away from Taiwanese rivals Foxconn and Pegatron. Luxshare will...
iphone 13 and iphone 13 pro max

Supply Constraints Cost Apple $6 Billion in Q4 2021

Thursday October 28, 2021 1:51 pm PDT by
Apple's revenue for the fourth fiscal quarter of 2021 came in under expectations, which Apple CEO Tim Cook said was caused by supply constraints on iPhones, iPads, and Macs. In an interview with CNBC, Cook said the supply issues cost Apple around $6 billion."We had a very strong performance despite larger than expected supply constraints, which we estimate to be around $6 billion," Cook told ...
AppleVsFoxconn Feature

iPhone Maker Foxconn Restarts Production in Shenzhen As Lockdown Partially Lifts

Wednesday March 16, 2022 4:17 am PDT by
Apple's primary iPhone assembler Foxconn says it has resumed production at its Chinese manufacturing plant in Shenzhen, following a partial lifting of the city-wide lockdown that came into effect on Monday. The Taiwanese company told Reuters it had restarted some production and operations at its Shenzhen campus after meeting government conditions for staff to live and work in bubble...
iphone 13 pro max display bleen

Apple to Cut iPhone Production Goals by as Many as 10 Million Units Due to Chip Shortages

Tuesday October 12, 2021 1:23 pm PDT by
Ongoing chip shortages faced by the tech industry are affecting production of the iPhone 13 models, according to a new report from Bloomberg. Apple is expected to cut 2021 iPhone 13 production by as many as 10 million units because of the shortages. In the final three months of the year, Apple was planning to produce 90 million iPhone 13 models, but Apple's manufacturing partners have...
vanarama apple car concept

Apple Suppliers Envisioning Long-Term Apple Car Supply Chain

Thursday March 3, 2022 4:43 am PST by
Apple suppliers are positioning to manufacture and assemble the company's long-rumored electric vehicle (EV), according to a report from DigiTimes. Apple Car concept render by Vanarama based on patents filed by Apple The report claims that Foxconn, the colossal manufacturer behind most iPhone models, and Luxshare Precision, the assembler behind Apple devices such as AirPods, are angling to...

Popular Stories

maxresdefault

M2 13-Inch MacBook Pro With 256GB SSD Appears Slower Than Equivalent M1 in Real-World Speed Tests

Monday June 27, 2022 1:57 pm PDT by
Benchmark testing has indicated that the 256GB variant of the 13-inch MacBook Pro with M2 chip offers slower SSD performance than its M1 equivalent, and now real-world stress testing by YouTuber Max Yuryev of Max Tech suggests that the 256GB SSD in the 13-inch MacBook Pro is also underperforming in day-to day-usage. The M2 MacBook Pro with 256GB SSD and 8GB RAM was slower than the M1 MacBook ...
M2 Pro and Max Feature

Apple's Upcoming M2 Pro Chip for High-End MacBook Pro and Mac Mini Will Reportedly Be 3nm

Monday June 27, 2022 7:31 am PDT by
TSMC will manufacture Apple's upcoming "M2 Pro" and "M3" chips based on its 3nm process, according to Taiwanese industry publication DigiTimes. "Apple reportedly has booked TSMC capacity for its upcoming 3nm M3 and M2 Pro processors," said DigiTimes, in a report focused on competition between chipmakers like TSMC and Samsung to secure 3nm chip orders. As expected, the report said TSMC will...
iPhone 11 Pro vs iPhone 14 Pro

iPhone 11 Pro vs. 14 Pro: New Features to Expect if You've Waited to Upgrade

Monday June 27, 2022 11:22 am PDT by
With many customers choosing to upgrade their iPhone every two or three years nowadays, there are lots of iPhone 11 Pro users who might be interested in upgrading to the iPhone 14 Pro later this year. Those people are in for a treat, as three years of iPhone generations equals a long list of new features and changes to look forward to. Below, we've put together a list of new features and...
original iphone 2007

15 Years Ago Today, the iPhone Went On Sale

Wednesday June 29, 2022 4:43 am PDT by
Fifteen years ago to this day, the iPhone, the revolutionary device presented to the world by the late Steve Jobs, officially went on sale. The first iPhone was announced by Steve Jobs on January 9, 2007, and went on sale on June 29, 2007. "An iPod, a phone, an internet mobile communicator... these are not three separate devices," Jobs famously said. "Today, Apple is going to reinvent the...
tesla carplay hack

Tesla Apple CarPlay Hack Updated to Work With Any Tesla Model

Monday June 27, 2022 3:38 am PDT by
Polish developer Michał Gapiński has released a new and improved version of his "Tesla Android Project" which brings Apple's CarPlay experience to more Tesla vehicles than ever before. According to Gapiński, version 2022.25.1 provides "100% functional CarPlay integration for any Tesla," and comes with several new features and bug fixes. The project now supports DRM video playback so that...
13 inch macbook pro m2 mock feature 2

Base 13-Inch MacBook Pro With M2 Chip Has Significantly Slower SSD Speeds

Sunday June 26, 2022 2:52 pm PDT by
Following the launch of Apple's new 13-inch MacBook Pro with the M2 chip, it has been discovered that the $1,299 base model with 256GB of storage has significantly slower SSD read/write speeds compared to the equivalent previous-generation model. YouTube channels such as Max Tech and Created Tech tested the 256GB model with Blackmagic's Disk Speed Test app and found that the SSD's read and...
maxresdefault

Video Comparison: M2 MacBook Pro vs. M1 MacBook Pro

Tuesday June 28, 2022 2:45 pm PDT by
Apple last week launched an updated version of the 13-inch MacBook Pro, and it is the first Mac that is equipped with an updated M2 chip. As it's using a brand new chip, we thought we'd pick up the M2 MacBook Pro and compare it to the prior-generation M1 MacBook Pro to see just what's new. Subscribe to the MacRumors YouTube channel for more videos. For the video comparison, we're using the...
iPhone vs Galaxy Larger

Apple Executive Says Samsung Copied the iPhone and Simply 'Put a Bigger Screen Around It'

Tuesday June 28, 2022 8:59 am PDT by
The Wall Street Journal's Joanna Stern today shared a new documentary about the evolution of the iPhone ahead of the 15th anniversary of the device launching on June 29, 2007. The documentary includes an interview with Apple's marketing chief Greg Joswiak, iPhone co-creator Tony Fadell, and a family of iPhone users. One segment of the interview reflects on Android smartphones gaining larger...
widgets ios 16 feature

Gurman: iPhone 14 Pro to Feature Always-On Display Showing iOS 16's New Lock Screen Widgets

Sunday June 26, 2022 7:36 am PDT by
iPhone 14 Pro models are widely expected to feature always-on displays that allow users to view glanceable information without having to tap to wake the screen. In the latest edition of his Power On newsletter for Bloomberg, Mark Gurman said the feature will include support for iOS 16's new Lock screen widgets for weather, fitness, and more. "Like the Apple Watch, the iPhone 14 Pro will be...