"The global memory chip shortage is catching up with Apple, Tim Cook says. The Apple CEO said on the company's first-quarter earnings call that Apple is beginning to feel the effects of the memory shortage crisis, with rising prices expected to put pressure on margins ahead. The warning comes amid blockbuster demand for Apple's newest products. Customer response to the latest iPhone lineup "exceeded our expectations," with iPhone revenue jumping 23%, Cook said on the call Thursday. Apple reported revenue of $143.76 billion and earnings per share of $2.84, beating analyst estimates."
"The staggering iPhone demand left Apple exiting the December quarter with "very lean" inventory, pushing the company into what Cook described as "supply chase mode." Cook said the biggest constraint is the limited access to advanced chipmaking nodes used to produce Apple's system-on-a-chip processors. Higher demand has also reduced flexibility across Apple's supply chain, he said. Memory shortages played a minimal role in Apple's December-quarter margins, but their impact is expected to grow, Cook added."
A global memory chip shortage is beginning to affect Apple, with increasing memory prices expected to put pressure on margins in the second quarter. Strong iPhone demand drove a 23% jump in iPhone revenue and left December-quarter inventory very lean, forcing Apple into supply chase mode. The primary production constraint is limited access to advanced chipmaking nodes for system-on-a-chip processors, and higher demand has reduced supply-chain flexibility. Memory costs had minimal impact on December-quarter margins but are projected to grow, contributing to a forecast gross margin range of 48% to 49%. Apple intends to consider a range of options as market memory pricing rises significantly.
Read at Business Insider
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