- Apple CEO Tim Cook said the chip shortage has caused the company to delay production of the iMac and iPad.
- The global semiconductor shortage has hit automotive and tech companies hard in recent months.
- Cook estimates Apple will lose $3-4 billion in revenue next quarter as a result of the shortage.
- See more stories on Insider’s business page.
Shoppers may see shortages of iMacs and iPads on the shelves in the coming months.
Apple CEO Tim Cook told investors during the company’s quarterly earnings report that Apple has been hit by the computer chip shortage and has been forced to delay production on its iMac and iPad as a result.
While many speculated that Apple would be one of few companies to dodge the chip shortage, Cook confirmed the supply disruption was primarily impacting its “legacy node” chips.
The affected chips employ traditional manufacturing lines used by other automakers and tech companies that are also scrambling to procure semiconductor chips. The computer chips are involved in anything from cars to televisions, gaming systems, and home appliances. Rising demand from the work-from-home boom paired with COVID-19 shutdowns in the supply chain have made the chips an especially valuable commodity.
Cook said Apple was able to avoid any impact from the shortage in the previous quarter. That was mostly due to the fact that the company began producing its own chips last year. On most of its other products, Apple uses high powered computer chips that are not impacted by the shortage.
The CEO did not specify which semiconductor parts were in short supply or when the issue would be resolved.
“Most of our issue is on licensing those legacy nodes, there are many different people not only in the same industry, but across other industries that are using legacy nodes,” Cook said.
Luca Maestri, the company’s chief financial officer, said Apple would take a $3 billion to $4 billion revenue hit as a result of the semiconductor chip shortage.
“It’s a combination of the shortages as well as the very, very high level of demand that we are seeing for both iPad and iMac,” Maestri said.
Maestri told investors that the iMac has had the highest sales in the past three quarters in the history of the desktop. He pointed to the work-from-home boom which has continually pushed Apple’s profits higher during the pandemic.
Overall, Apple has been able to weather the chip shortage relatively unscathed compared to other tech and automotive companies.
In February, consulting firm Alix partners predicted the supply disruption could cause car companies to lose as much as $61 billion in revenue this year. Many automakers have been forced to shut down plants and prioritize which models to produce, as a result of the lack of computer chips. On Tuesday, Tesla CEO Elon Musk said the shortage has caused “insane difficulties” for the electric car company.
While the chip shortage has hit automotive companies the hardest, Dell and HP have been reporting the impact of the lack of semiconductors since the fall. Earlier this year, Sony and Nintendo said they have faced trouble producing gaming consoles due to the shortage.
Apple had a profitable quarter, smashing analysts’ expectations. The company was driven by the continued increase in demand for electronics and its second quarter saw all of Apple’s stores open for the first time since the pandemic started.