The technical results for this quarter came as no surprise to anyone, high. But amid record revenue, the looming ghost of global semiconductor shortages was your fly.
Although virtually none of the large technology companies sounded overly concerned about their calls, the lack of components was reported Apple, Microsoft, Samsung, Tesla, AMDand Intel potential problems during the previous or next quarter.
Apple had already warned that a shortage of parts could impact its iPad and Mac businesses with its second-quarter earnings of $ 3 billion to $ 4 billion. CFO Luca Maestri said in a third-quarter earnings call last week that it was able to keep those losses mainly on the iPad and under $ 3 billion, which was definitely a profit for Apple. But at the same time, CEO Tim Cook’s warning that supply constraints could affect the iPhone – the most important and lucrative part of Apple’s product portfolio – in the next quarter, which could be a much more worrying factor for the company.
Microsoftalso pointed out that the decline in Windows OEM revenue (down 3 percent) was directly due to supply chain constraints, although its cloud revenue continued to grow. And of course, while Microsoft’s next-generation Xbox Series X and Series S consoles continue to sell all of the Microsoft-produced units, supply is simply not enough.
It was a similar story for Samsung, whose revenue and operating profit grew year on year as its semiconductor business (which accounts for more than a third of its revenue and more than half of its profit) grew in high demand. But Samsung was also burdened by declining overall demand and revenue from the mobile business, which declined from the previous quarter due to a combination of supply shortages and the seasonal cycle.
Other companies, such as Tesla, have taken more drastic steps to address the shortcoming: the company had to develop new firmware for all types of chips, but its CEO Elon Musk was frankly saying that semiconductors would be a big concern for the company. “The global chip shortage situation is still quite serious,” he said, highlighting the difficulties Tesla experienced in sourcing chips that use essential parts of its cars – particularly airbags and seat belt modules.
And, of course, the chip manufacturers themselves are expressing their concerns. Intel CEO Pat Gelsinger said according to the income request, the shortage could continue until 2023 in the whole sector and points out that he expects “it will take another 1-2 years before the industry can fully meet demand”. The company also called it a “continuous industry-wide component due to a lack of substrates,” which means Intel doesn’t expect to be able to get enough raw materials to make the chips — despite high demand for processors. This could lead to a “particularly acute” shortage of Intel consumer circles in the coming third quarter — which would be right when PC sales tend to pick up for schoolchildren.
AMD CEO Lisa Su took a more optimistic note and explained with the interview Yahoo Finance that while supply may still be “tight” by the end of 2021, things have improved throughout the year. “As we go through this year and certainly next year, I think things will get better,” he said.
All in all, two trends can be seen here: the first is that large technology companies do not allow supply problems to prevent the recording of record revenues. But it’s also clear that the impact of shortages is still largely underway, and until capacity starts to grow or demand starts to fade, worries about shortages, product delays, and hard-to-find equipment are likely to only increase as we head toward busy holiday shopping.