Chip shortages took $6bn bite out of Apple's top line

No need to panic, Cupertino still pulling in a $1bn a day in revenue

Apple's lost $6bn in revenue during its last financial quarter of 2021 due to chip shortages and supply constraints, and the impact will be even more severe in the coming months.

"We estimate the impact from supply constraints will be larger during the December quarter," said Luca Maestri, chief financial officer, during an earnings call on Thursday.

Apple's stock price fell nearly 5 per cent at the news, despite Cupertino reporting a record quarterly revenue of $83.4bn. Analysts had been expecting a figure much closer to $85bn, so those $6bn in lost sales have proved very pricey indeed on Wall Street.

Later in the call, CEO Tim Cook said chip shortages have been affecting the iPhone, the iPad and the Mac products. The company had no issues getting cutting-edge chips made from some locations, but had issues getting supplies from "legacy nodes" in places like Southeast Asia, which suffered from pandemic-related delays.

Apple's latest Mac and iPhone chips are made by Taiwan Semiconductor Manufacturing Co using the 5nm process.

"On legacy nodes, we compete with many different companies for supply. And it's difficult to forecast when those things will balance because you'd have to [know] how the economy is going to be in 2022," Cook said.

IDC analyst Ryan Reith told The Register that the supply-chain challenge on the legacy node is around components like power management integrated circuits, display driver components, and even USB-C parts. These are made in "mom-and-pop" factories with limited operations and no concerns about upgrading factories.

"We expect revenue for each product category to grow on a year over year basis except for iPad, which we expect to decline year over year due to supply constraints," Apple's Maestri said.

Despite this challenge, the company is seeing big demand for its products, Cook said.

The fourth quarter and year-end results [PDF] are as follows:

Revenue for the quarter was a record $83.4bn, up 29 per cent year on year. For the year Apple pulled in $366bn, a touch over a billion a day.

Net income was $20.6bn of the three months up to September, up from $12.7bn this time last year. For the full year Apple reported profits nearly doubling to $94.7bn.

Earnings per share were in line with analysts' expectations, at $1.24 for the quarter and $5.61 for the year. ®