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A Supply Chain report reveals that Apple Shut Down M2 Production at the start of 2023 and Resumed in March

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A reliable supply chain source is reporting this morning that Apple had halted production of its M2 Series SoCs used in MacBooks for a month as the year began (from January to February). While production of the chips have since resumed , the report indicates that production volume has dropped by half as compared to a year ago.

To further confirm this, Apple's supplier Taiwan’s TSMC didn’t send any of its finished 5-nanometer M2 wafers to packaging and testing companies to be cut and assembled as finished chips in that same time frame (From January to February). This can only happen if Cupertino requests it which translates to a likely issue with low demand for MacBooks, which use the chips.

The report pointed to others in Apple's supply chain associated with the M2 chip that halted production in that very same time frame.

Meanwhile, in February, Apple already warned of the difficulties of the PC market during its earnings call for its 2023 first quarter (October to December 2022). At the time, the iPhone maker said it expects short-term difficulty for Apple Silicon (which includes M2). For more, read the full report by The Elec. That's not exactly what was said during the February Financial Conference Call.

What did Apple's CEO actually say about the M2 in February?  

"Just last month, we introduced new MacBook Pro models powered by our latest developments in Apple silicon, M2 Pro, and M2 Max. These chips enable unprecedented performance and do so with less energy, which is not only good for the environment but gives the newest MacBook Pro the longest battery life ever in a Mac. We also introduced the M2-powered Mac mini, which will supercharge productivity for users of all kinds and leave them stunned by just how powerful a Mac mini can be. During the quarter, iPad revenue grew 30% to a total of $9.4 billion.

The very strong growth was due in part to a favorable compare to the December quarter a year ago when we experienced significant supply constraints. Customers continue to praise our new lineup for its versatility, whether it's the new iPad Pro now powered by the M2 or the newly designed iPad 10th Generation with its stunning liquid retina display and beautiful colors. Revenue for Wearables, Home and Accessories was $13.5 billion, which was down 8% year over year driven by foreign exchange headwinds and a challenging macroeconomic environment. We remain excited about the long-term opportunity in the category."

Apple's CFO, Luca Maestri later added:

"At the same time, however, the installed base of active Macs reached an all-time high across all geographic segments, and we continue to see very strong upgraded activity to Apple silicon. Customer satisfaction with Mac remains very strong at 96% based on the latest survey of U.S. consumers from 451 Research. iPad revenue was $9.4 billion, up 30% year over year despite significant FX headwinds."

Apple made no specific forecasts for individual products during their February conference call and definitely didn't warn of an M2 drop in demand. Obviously all product categories slow down after the holiday quarter and we'll have to listen closely to Apple's next financial conference call closely to get clarity on Mac shipments compared to last year before seeing doom and gloom for Apple's M2 chip.

Early in 2023 there were a series of complaints about the 2023 M2 MacBook Pro. Whether Apple stopped M2 production to fix these issues is unknown at this time – but it's not a guarantee that there was a drop in demand as the report suggests.

10.0F0  Supply Chain News & Rumors


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