TLDR
- Apple posted $143.8 billion in Q1 revenue, up 16% year-over-year, with projections for 13-16% growth next quarter.
- CEO Tim Cook says TSMC can’t produce enough 3-nanometer chips to meet iPhone demand, constraining sales.
- Memory chip prices are rising due to AI data center demand, creating additional supply chain pressure.
- Apple expects 48-49% gross margins in March quarter despite higher memory costs.
- The company sourced 20 billion chips from U.S. manufacturers in 2025, beating its 19 billion target.
Apple delivered massive earnings Thursday. But the company left money on the table.
The iPhone maker reported $143.8 billion in quarterly revenue. That’s a 16% increase from last year. Apple forecasts another 13-16% growth for the current quarter.
The catch? Sales could be higher if Apple had enough chips.
CEO Tim Cook told analysts that customer demand exceeds production capacity. The problem isn’t interest in iPhones. It’s getting enough processors to build them.
“We expect our March quarter total company revenue to grow by 13% to 16% year over year, which comprehends our best estimates of constrained iPhone supply during the quarter,” CFO Kevan Parekh said. Translation: they’re selling every iPhone they can make.
TSMC Manufacturing Crunch Limits Output
Taiwan Semiconductor Manufacturing Co. makes Apple’s custom chips. The A-series processors in iPhones and M-series chips in Macs use TSMC’s 3-nanometer technology.
That’s where the bottleneck sits.
“The constraints that we have are driven by the availability of the advanced nodes that our SoCs are produced on,” Cook explained. He said Apple sees “less flexibility in supply chain than normal, partly because of our increased demand.”
TSMC dominates advanced chip manufacturing. But even the world’s biggest chipmaker has limits. Apple can’t get enough production slots to meet orders.
Cook said the company is working to increase supply access. But he wouldn’t say how long the shortage might last beyond March.
Memory Prices Rising Too
AI data centers are driving up memory chip prices. That’s creating another headache for Apple.
Rising memory costs had “minimal impact” on profit margins last quarter, Cook said. But he expects “a bit more of an impact” in the current quarter ending in March.
Apple isn’t sharing its specific plans. “As always, we’ll look at a range of options to deal with that,” Cook told analysts.
The company still expects healthy gross margins between 48% and 49% for the March quarter. That would actually be higher than the December quarter at the midpoint.
Domestic Chip Production Exceeds Goals
Apple committed to spend over $600 billion in the U.S. over five years. Much of that goes toward companies building chip factories in America.
The strategy is paying off. Cook revealed Apple sourced 20 billion chips from U.S. manufacturers in 2025. That beats the company’s 19 billion target.
TSMC is expanding U.S. operations after doing most manufacturing in Taiwan historically. Apple is one of the companies helping fund that expansion.
The chip shortage affects device makers worldwide. AI demand created competition for both advanced manufacturing capacity and memory components.
Analysts pressed Cook repeatedly about component access during the earnings call. The questions reflect industry-wide concerns about supply constraints.
Apple expects 48-49% gross margins in the March quarter despite rising memory chip prices.
The post Apple (AAPL) Stock: iPhone Production Hits Wall as TSMC Chip Supply Runs Short appeared first on Blockonomi.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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