Apple Inc (AAPL) is reportedly looking to cut its iPhone production outlook for 2021 by 10 million due to supply chain issues.
How The Chip Crunch Is Hurting Apple:
Supply constraints are beginning to show impacts on premium-tier handset production, BofA Securities analyst Vivek Arya said.
Shortages are impacting several areas within the supply chain, including components such as RF/wireless shipped by Broadcom Inc (AVGO) and OLED display drivers shipped by Texas Instruments Incorporated (TXN), he added.
Modest capacity constraints, the analyst said, were expected given Apple highlighted shortages on its June quarter earnings call and lengthier iPhone 13 lead times relative to the prior iPhone 12 rollout.
The magnitude of potential cuts comes as a surprise for investors, the analyst said.
Any downward production revisions will likely impact most suppliers, even those with healthier capacity situations, Arya said.
Suppliers With High Exposure To Apple:
Apple’s strong presence in the smartphone market and higher 5G mix would mean Cirrus Logic, Inc. (CRUS), which derives roughly 80% of sales from Apple, is among the most impacted, Arya said.
RF suppliers such as Skyworks Solutions Inc (SWKS), Qorvo Inc (QRVO) and Broadcom will also see meaningful impact, the analyst said. These companies benefit from strong units and increasing content in latest generation devices, he added.
Suppliers With Moderate Exposure:
Teradyne, Inc. (TER), which derives about 25% of sales from Apple; Texas Instruments Incorporated (TXN) with 8%-10% exposure; NXP Semiconductors NV (NXPI) with 5%-10% exposure; II-VI Inc. IIVI with 5%-7% exposure; and Intel Corporation (INTC) with 3%-4% exposure, are among those which will be moderately impacted, Arya said.
Suppliers With Little or No Exposure:
Advanced Micro Devices, Inc. (AMD), Marvell Technology Inc. (MRVL), MACOM Technology Solutions Holdings Inc (MTSI), Microchip Technology Inc. (MCHP), ON Semiconductor Corp (ON), Ambarella Inc (AMBA) and Wolfspeed, Inc. (WOLF) are chipmakers with little or no exposure to Apple, the analyst said.
Intel and AMD, the analyst added, hold exposure mostly to Macs, and should see minimal/no impact from iPhone headwinds.
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Originally Posted on Ocotber 13, 2021 – Which Apple Chip Suppliers Will Face The Biggest Impact From iPhone Production Cuts?
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