Apple faces supply chain problem as MacBook Neo demand exceeds expectations

Source: 9to5Mac

The new MacBook Neo has apparently been a smash hit, and Apple will likely talk up its success at its next quarterly earnings call. But, in what can be considered a good problem to have, Apple is facing a bit of a supply‑chain predicament. Its stock of A18 Pro chips — the previous‑gen iPhone processor that powers the Neo — is reportedly running low, according to respected analyst Tim Culpan (source).

One of the ways Apple got the price of the Neo down was by using leftover, binned A18 Pro chips that were originally destined for life inside iPhone 16 Pro. If it needs to ramp up production again, though, the laptop’s margins will be squeezed.

The MacBook Neo uses A18 Pros that were essentially discarded during their intended production run for iPhone 16 Pro. Chips that had slightly defective GPUs were put aside and reused inside the Neo; this is why the Neo chips only have five working GPU cores, when the iPhone 16 Pro’s A18 Pro chip boasted six.

Culpan says Apple initially planned to make about 6 million MacBook Neos in total, using up the binned A18 Pro supplies. With demand now looking to exceed that amount, Apple is facing a bit of a quandary. Discussions about solutions are apparently taking place with supply‑chain partners right now.

• Option 1: Pay TSMC a premium to ramp up A18 Pro fabrication again, although the per‑unit cost is unclear. Apple may have to raise the Neo’s price to preserve its preferred profit margins, possibly dropping the base $599 configuration and keeping only the $699 model.
• Option 2: Accelerate production of the second‑generation MacBook Neo, originally planned for mid‑2027, which will use A19 Pro chips (the leftovers from the iPhone 17 Pro family). This is easier said than done.
• Option 3: Let MacBook Neo availability dwindle and wait until next year, though this is the least desirable outcome for executives who don’t want to leave present demand unaddressed.