FYI.

This story is over 5 years old.

Tech

Apple’s Upcoming iPhone May Be Causing Component Shortages

As Apple gets ready to ramp up production of the next iPhone, competitors are buying up all the DRAM and NAND they can.
Image: iFixit

We all know the iPhone 8 is coming out this fall. Or, maybe it'll be called the iPhone 7S. Some rumors say we'll get both. Whatever it is, Apple's yearly phone release is a few months away, which means production is about to really ramp up. According to a few reports, it's causing component shortages throughout the consumer electronics industry.

A Reuters report claims that Apple's demands on DRAM supply are impacting the market as a whole. LG is quoted as saying, "After the supply shortages emerged we brought forward our procurement decisions … to ensure a stable supply."

Advertisement

It's not just DRAM, either. NAND (flash storage used in phones, SSDs, and more) is under pressure from Apple's demand. It's easy to see why. Apple ships over 200 million iPhones per year, and when the new model is released (typically in September) they often sell over 80 million of them before the year ends. If the iPhone 8 is a bigger leap over the iPhone 7 than the 7 was over the 6 or 6s (which seems likely), this year's sales figures may go up significantly.

Reuters claims that some companies are moving up their purchase orders, buying RAM and NAND earlier than they normally would in order to avoid shortages later. Others are locking in 6-month supply contracts at higher prices, instead of the typical 3-month contracts.

If Apple ships 100 million iPhones in the 4th quarter of this year, each with 32, 128, or 256GB of NAND storage and 2 or 3GB of RAM, it will have a real impact on the global supply chain. And Apple gets what Apple wants—no supplier wants to risk losing next year's big iPhone contract by failing to meet demand this year.

Apple is no stranger to supply chain drama

Just last month, the Wall Street Journal blamed Apple's gobbling up of resources for shortages of the Nintendo Switch. And not a year goes by where PC enthusiasts blame a shortage of graphics cards on Apple taking up all of the top-tier manufacturing capacity (historically, Apple's system-on-chips have usually been made at TSMC, as have Nvidia and AMD's GPUs).

We've seen lots of stories and rumors over the years about the iPhone and supply shortages. Often, it's Apple having problems securing all the parts it needs. The iPhone 6s Plus was in short supply after launch due not only to high demand, but apparently because of problems securing enough backlights for the display.

Advertisement

The year before, it was said that shortage of the in-cell touch panel and metal casing would limit supply of the iPhone 6.

The year before that, it was the fingerprint sensor reportedly causing iPhone 5S production shortfalls.

It seems to be something of a tradition: Around June or July, we start to hear about how the upcoming iPhone is going to be in short supply, or is causing other things to be in short supply, or is in some way wrapped up global supply chain drama.

The iPhone is uniquely suited to supply issues. While Samsung may ship more phones per year, those shipments are spread out over a wide product line, and the cheap phones don't use all the same parts, materials, and manufacturing techniques as the expensive premium phones. Apple's sales are concentrated into just a few models, all using similar top-tier materials and complicated manufacturing techniques. The range of different chips used in iPhone manufacturing at any given time is small compared to the wide variety used to make the extensive Samsung product line. All of Apple's eggs are in a very few baskets.

Get six of our favorite Motherboard stories every day by signing up for our newsletter.