Apple can't secure enough chips as iPhone demand surges, memory prices rise

In a recent report, Apple announced impressive first-quarter earnings, projecting a revenue increase of up to 16% for the current quarter. However, the tech giant highlighted that sales could have been even stronger if they could secure enough chips to satisfy the soaring demand for iPhones. Finance Chief Kevan Parekh shared with analysts that they anticipate year-over-year revenue growth of 13% to 16%, despite the current constraints on iPhone supply. During the earnings call, CEO Tim Cook addressed inquiries concerning Apple’s access to memory components, which have surged in price due to heightened demand for chips essential for AI data centers, resulting in a widespread memory shortage. Rather than focusing solely on memory issues, Cook emphasized the growing demand for Apple products and the company's limited inventory. Cook pointed out that the primary limitation in producing more iPhones stems from the availability of advanced node manufacturing needed for their A-series and M-series chips, collectively referred to as system-on-chip (SoC). Apple relies on Taiwan Semiconductor Manufacturing Company (TSMC), a leader in advanced chip manufacturing, for these critical components. Cook stated, “The constraints that we have are driven by the availability of the advanced nodes that our SoCs are produced on, and at this time, we're seeing less flexibility in supply chain than normal, partly because of our increased demand.” While Cook indicated that Apple is actively working to enhance its supply access, he refrained from making predictions beyond March. He acknowledged the impact of rising memory prices, noting that while the December quarter saw minimal effects from these price hikes, the March quarter would experience greater repercussions. Cook assured investors that Apple is exploring various strategies to navigate the AI-induced shortages affecting the global tech landscape. Additionally, Apple anticipates gross margins of 48% to 49% for the upcoming quarter, which would be an improvement compared to the previous quarter. Last year, the company committed to investing over $600 billion in the U.S. over five years, with a significant portion allocated to partnerships with companies like TSMC that are focused on domestic chip production. On Thursday, Cook revealed that Apple has sourced 20 billion chips from U.S. manufacturers in 2025, surpassing their earlier goal of 19 billion.