Apple on Thursday reported first-quarter earnings that far exceeded expectations and forecast revenue growth of up to 16% in the second quarter.
The company stated that its first-quarter sales performance would have been even stronger if it had secured sufficient chips to meet customer demand for the iPhone.
Apple's Chief Financial Officer, Kevin Parekh, told analysts during the earnings call, "We expect revenue for the March quarter (second fiscal quarter) to increase by 13% to 16% year-over-year, which incorporates our most optimistic estimate of iPhone supply constraints during the quarter."
During the earnings call, analysts directed several questions to CEO Tim Cook regarding the supply situation for Apple's memory components. A surge in market demand for chips related to AI data centers has led to a significant increase in memory component prices, consequently causing a memory shortage.
Cook did not dwell excessively on the past, instead focusing on the growing demand and the company's low inventory levels. He indicated that the factor hindering Apple's ability to produce more iPhones lies in its capacity to access advanced node manufacturing technology for its A-series and M-series chips (which the company refers to as SoCs, or systems-on-chip).
Apple utilizes advanced node chips produced by TSMC. TSMC holds a dominant position in the high-end node manufacturing sector.
Cook stated, "The constraints we face are determined by the availability of the advanced chip manufacturing process nodes we use. Currently, we are seeing lower flexibility in the supply chain than usual, partly due to our increased demand."
Cook mentioned that Apple is actively working to expand its supply chain sources and currently prefers not to make predictions about the situation in the coming months.
Although the supply shortages this quarter are related to advanced process chip manufacturing, Cook acknowledged that Apple is also affected by rising memory prices and is considering "a range of countermeasures." However, he declined to disclose specific details on how Apple is addressing this AI-driven supply shortage, which is impacting nearly all device manufacturers globally.
Cook said, "As always, we will consider multiple options."
Apple anticipates its second-quarter gross margin to be between 48% and 49%; the midpoint of this range is higher than the gross margin achieved in the first quarter. Cook noted that the impact of rising memory prices on Apple's first-quarter results was "minimal," but the impact on the second quarter will be greater.
Last year, Apple announced it would invest over $600 billion in the United States over the next five years, a significant portion of which is intended to support the few companies committed to producing chips in the US, including TSMC.
On Thursday, Cook stated that Apple procured 200 billion chips in the United States in 2025, surpassing the previously set target of 190 billion.
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