(Reuters) – Apple Inc’s victory over global chips supply-chain constraints signals good news amid troubled markets around the world. Not so fast, analysts say.
The iPhone maker, which warned three months ago that supply issues would dent its holiday-quarter revenue, on Thursday posted massively record results from sales of its premium phones. If something is missing, the situation seems to improve.
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“Most of the supply-disruption issues are over for Apple, but not necessarily for everyone else,” said Bob O’Donnell, principal analyst at TECHnalysis Research.
Companies ranging from electric automaker Tesla Inc. to wafer fabrication equipment supplier Lam Research have warned again that supply chain issues, which crippled many industries, will continue to limit production this year.
Semiconductor companies prioritize big players like Apple for their huge buying power, huge demand for their products, and the company’s ability to place custom orders for the components used in its products. And Apple’s high-end chips are expensive, a draw for chip makers.
This essentially means that Apple has an advantage and can procure components relatively quickly compared to rivals.
Still, while Apple got better service thanks to the more sophisticated chips, like many others, it faced trouble with some older technology chips, said Daiwa Capital Markets analyst Lou Misciosia.
Apple Chief Executive Tim Cook told analysts that the chips used in Apple iPads, which saw a 14% drop in revenue, used chips with older technology and that supplies of those older chips were particularly tight. .
Cook said the constraints on older chips, or nodes, were very significant in the holiday quarter. “Overall, we see an improvement against the odds in the March quarter, which were in the December quarter,” he said.
Tesla CEO Elon Musk said this week that the supply chain crisis would limit manufacturing output at all company factories. “So the lack of a chip, while better than last year, is still an issue,” he told analysts.
Semiconductor equipment maker Lam Research noted new supply challenges, with the Omicron boom adding further disruption to freight and logistics operations. The company said it was seeing a shortage of certain components and parts, including semiconductors, a few weeks into 2022.
Analysts and market leaders in the semiconductor space expect supply issues to ease later this year.
“This will continue to be a concern for the industry, but Apple may be the exception to the rule,” said Romeo Alvarez, technology analyst at William O’Neill + Co.
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