Chip shortage bites Apple

The global chip shortage that first reached prominence in March after a container ship ran aground in the Suez Canal is again making headlines after reports the global chip shortage would impact production of Apple’s new iPhone 13.

Apple forecast to make 90 million units of the iPhone 13 over the last three months of 2021 has slashed estimates by 10million units as the lead time between placing a semiconductor order and taking delivery has blown out to an average of 21.7 weeks, according to research by Susquehanna Financial group.

Chip makers have been unable to cope with a wave of demand unleashed after the Covid-19 pandemic for various reasons, including strong demand for laptops for homeworking and after automakers underestimated how quickly car sales would rebound.

The chip market is dominated by two Asian-based chip makers Taiwan Semiconductor Manufacturing Co (TSMC) and Samsung Electronics Co. In the meantime, as competitors seek to increase production, the chip shortage is expected to continue into the end of 2021

It's still unclear what the iPhone 13 shortage will mean for Apple's next quarter worth of sales. However, the market is erring on the side of caution, and Apple shares are trading -1.33% lower at $139.63 in late trading, after falling -0.91% earlier in the day.  

Apple's share price has now fallen over 10% from its $157.26 high of September, after testing horizontal support near $138.00. The fall is viewed as part of a correction rather than a change in trend. However, given this morning's news, the correction may yet test the 200-day moving average at $134.55 before the uptrend resumes.

Keeping in mind that a sustained move below the 200-day moving average would warn that a deeper correction towards $125.00 is underway.


Apple Daily Chart

Source Tradingview. The figures stated areas of October 13th, 2021. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.