Key facts
- Apple CEO Tim Cook confirmed the company is experiencing the impact of a global memory chip shortage.
- The shortage is expected to increase costs and pressure Apple's profit margins in the coming quarter.
- Demand for Apple's newest products, including the latest iPhone lineup, has been exceptionally strong.
- The company is in 'supply chase mode' due to lean inventory following high demand.
- Access to advanced chipmaking nodes for Apple's processors is a significant constraint.
- The tech industry at large is facing a worsening memory chip shortage, affecting various sectors.
Apple is beginning to experience the effects of a global memory chip shortage, according to CEO Tim Cook. He stated on the company's first-quarter earnings call that rising prices for these critical components are expected to impact profit margins. This warning comes despite blockbuster demand for Apple's latest products, with iPhone revenue seeing a significant jump. Cook noted that the company is in 'supply chase mode' due to lean inventory and that access to advanced chipmaking nodes is a constraint. The memory shortage's impact on margins was minimal in the December quarter but is anticipated to grow, contributing to a forecasted gross margin range of 48% to 49% for the second quarter. The broader tech industry is also grappling with this shortage, as AI companies, smartphone makers, and PC manufacturers compete for limited memory components, driving up prices.