According to analyst Ming-Chi Kuo, Apple’s weakening hardware demand is having a significant impact on chip manufacturers. Kuo predicts that orders for equipment will decline by 30% in the next year as a result.
In a post on Medium, Kuo examines the sales of extreme ultraviolet (EUV) equipment to chip manufacturers, specifically focusing on ASML. The analyst suggests that ASML may cut production of this expensive gear because Apple and other companies may not require as many chips as previously forecasted.
Kuo highlights that Apple’s MacBook and iPad shipments experienced a significant decline in 2023, with decreases of approximately 30% and 22% respectively, amounting to 17 million and 48 million units. He attributes this sharp decline to the end of work-from-home demand and diminishing user appeal for new specifications such as Apple Silicon and Mini-LED.
Furthermore, Kuo identifies a lack of growth drivers for the MacBook and iPad. This, combined with lower demand for 3nm from Qualcomm, lighter demand for Intel’s 20A process, and Samsung’s 3GAP+, poses challenges for chip manufacturers. Additionally, the major DRAM manufacturers are not expected to expand capacity until at least 2025 or possibly as late as 2027, depending on market conditions.
Apple has acknowledged that the PC market has contracted due to higher-than-expected purchases during the peak of the COVID-19 pandemic. While the company has weathered the storm better than its competitors, it remains uncertain how long the demand will last.
As for Apple’s chip development, rumors initially suggested that the M3 chip would debut in April 2023, then later in the fall of the same year. However, more recent rumors indicate that the new Apple Silicon Mac chip based on a 3nm process may be delayed until 2024. This is reasonable considering that Apple seems to have secured all of TSMC’s 3nm chip production through the end of 2024 for its iPhone.
In conclusion, the weakening demand for Apple hardware is causing a ripple effect in the chip manufacturing industry, with analysts predicting a decrease in equipment orders. The decline in MacBook and iPad shipments, coupled with lower demand from other players in the market, poses significant challenges for chip manufacturers. Ultimately, it remains to be seen how long the contraction in the PC market will continue and how it will impact the industry as a whole.