M2 chip production allegedly paused over Mac demand slump

AppleInsider

A dubious report claims that Apple allegedly paused production of M2 chips at the beginning of 2023, caused by an apparent slump in Mac sales.

M2 chip

The demand of products can impact the supply chain heavily, as Apple tries to balance manufacturing to the needs of its customers. A report claims that Apple stopped production of M2 chips early in 2023, because sales of its Mac and MacBooks had allegedly stalled.

According to sources of TheElec, Apple "completely stopped production" of the M2 system-on-chip for MacBook models in January and February. While some production resumed in March, it is said that the level is only half that of the same period in 2022.

The source explained that a slump in the finished product market indicates it is a serious situation, more than previously expected.

The Outsourcing Semiconductor Package Test (OSAT) said on Monday that TSMC didn't send 5-nanometer process M2 wafers for assessment in January and February. Apple apparently requested a pause in production due to decreased MacBook demand.

While TheElec is reasonable when it comes to supply chain stories, the reasoning behind this one seems a little far-fetched.

Some of this report makes sense. Apple had a hard time keeping products on store shelves during the Christmas season because of supply issues, while M2 processor production kept on going. The alleged "pause" may have just been a period of time where Apple had more chips on hand in the short term than it needed.

Other analysts have pointed to an overall PC market decline, but with Apple maintaining flat sales across 2022. Analyst predictions for Mac sales in Q1 2023 are also forecast to be good, with Apple being a high point in a declining industry.

Also, while it's entirely within Apple's power to pause production of a key component, this sort of activity normally would've been picked up on by observers and leakers earlier in the year.

Read on AppleInsider

22july2013

Macs aren't the only Apple products to use the M2 chip.

lkrupp

Interesting. The comments sections over at MacRumors and 9to5Mac are filling up with dozens of "Apple is done for" recriminations, reasons for failure, predictions of doom, instructions on how Apple can save itself from disaster etc. All over a single supply chain report of dubious veracity that AppleInsider has labeled "unlikely". 

Rumor based tech blogs are the perfect place for the disgruntled to rage and spew... and for fanboys to unload. C'est la goddamn vie.

blastdoor

Presumably the M3 will be replacing the M2 starting sometime this year (likely first in the MBA, Apple's highest volume Mac). Several months before that happens, Apple will likely shift production from the M2 to the M3 (not completely, but substantially). This story may reflect that process happening a bit earlier than Apple had originally planned, and that may indeed be due to weaker than anticipated demand. It's just very hard to know *how* much weaker the demand is relative to previous expectations. 

indiekiduk

The 5nm M2 was a stop gap anyway because 3nm wasn't ready in time so it's not surprising they ended manufacturing early given 3nm is ready now.

TenApplesUpOnTop

Sounds like some analyst wants to scoop up some Apple stock at a slight discount.

lkrupp

indiekiduk said:

The 5nm M2 was a stop gap anyway because 3nm wasn't ready in time so it's not surprising they ended manufacturing early given 3nm is ready now.

Yeah, like some nobody knows something.

tht

This report is similar to reports of iPhone production "dropping by 50%!" in the January and February time frame every year. If it was say October and November, that's alarm bells, with people getting fired. If it is January through February, that's post-holiday shopping season supply drawdown.

The PC market is contracting back to lower than pre-pandemic levels. Won't hit the bottom on this drawdown until this summer maybe? All those 2020 to 2021 PC sales will start being replaced in late 2023 and mostly really start in 2024. PC OEMs have to wait it out another 6 months at least.

paxman

Apple is frikking doomed! I have been saying so since the mid 90's. Mark my words. 

mattinoz

Maybe they changed the outsourcing test company to one that doesn't leak.

Serqetry

indiekiduk said:

The 5nm M2 was a stop gap anyway because 3nm wasn't ready in time so it's not surprising they ended manufacturing early given 3nm is ready now.

I'd be so happy if people would stop using the ridiculous term "stop gap" all the time.  Apple doesn't make chips or computers to be "stop gaps", they just make what's practical at the time, and technology continues to improve as usual.

BlueLightning

Suspect ALL laptop and desktop makers will see a slow-down for 1-3 years.  

Along with layoffs at Google, non-engineers will receive a Chromebook by default.  
(As most of you know, Google develops the ChromeOS used on Chromebooks.)  
Refresh cycles will be extended by a year or more.  
Any accessory costing more than $1k, and not available from current corporate stock requires high-level approval.  
Google is cutting back on paid maternity and sick leave and many benefits.  

Before retirement, my former (large) employer (Aerospace firm) was considering changing the Dell and HP refresh cycles from every 3 years to every 4-5 years.  
I have them beat, I'm on a 7-9 year refresh cycle at home (and currently pay for AppleCare Plus by the year, until no longer offered).  
 
Only things that caused me to upgrade from a late 2013 13" MBP (8gb, 256gb, 2.4GHz, 2 total cores) to a 2023 14" MBP (32gb, 512gb, 3.5GHz/2.4GHz, 42 total cores):
1.  Wanted to run a current macOS version.  
2.  Lack of dedicated GPU cores on the old Intel chip caused substantial heating during video viewing.  
3.  Started running into a moderate amount of memory compression and use of virtual storage with old machine.  
4.  Started to worry about parts availability on older machine, and figured battery would give out eventually.  

charlesn

I really wish Appleinsider would stop giving oxygen to this doom rumor nonsense, which NEVER turns out to be true. The true "Rumor Score" is 100% BS. And yet AI's Rumor Score is at the halfway mark, which to me says AI thinks it's as likely to be true as not. Really? So for the first quarter of this year, you think Apple had only two weeks worth of M2 production? (No production in Jan or Feb and only half-producton in March.) And which current products use the M2? ALL Macbooks, iMacs, Mac Minis and iPad Pros. So I guess pretty much Apple's entire computer and Pro tablet business has come to a complete screeching halt? Yeah, that makes sense. 

JUST STOP posting this crap. 

pb

AppleInsider said:

A dubious report claims that Apple allegedly paused production of M2 chips at the beginning of 2023, caused by an apparent slump in Mac sales.

I cannot understand why there is still no M2 iMac, 10 months after Apple unveiled the M2 MacBook Air and 2 years after the original M1 iMac. Could what you say here (alleged production stop and sales decrease) be the reason?

doggone

BlueLightning said:

Suspect ALL laptop and desktop makers will see a slow-down for 1-3 years.  

Along with layoffs at Google, non-engineers will receive a Chromebook by default.  
(As most of you know, Google develops the ChromeOS used on Chromebooks.)  
Refresh cycles will be extended by a year or more.  
Any accessory costing more than $1k, and not available from current corporate stock requires high-level approval.  
Google is cutting back on paid maternity and sick leave and many benefits.  

Before retirement, my former (large) employer (Aerospace firm) was considering changing the Dell and HP refresh cycles from every 3 years to every 4-5 years.  
I have them beat, I'm on a 7-9 year refresh cycle at home (and currently pay for AppleCare Plus by the year, until no longer offered).  
 
Only things that caused me to upgrade from a late 2013 13" MBP (8gb, 256gb, 2.4GHz, 2 total cores) to a 2023 14" MBP (32gb, 512gb, 3.5GHz/2.4GHz, 42 total cores):
1.  Wanted to run a current macOS version.  
2.  Lack of dedicated GPU cores on the old Intel chip caused substantial heating during video viewing.  
3.  Started running into a moderate amount of memory compression and use of virtual storage with old machine.  
4.  Started to worry about parts availability on older machine, and figured battery would give out eventually.  

Very cool that you have been able to keep a nearly 10 year MBP going.  It just goes to show how robust Macs are.  In the past I had Macs for almost that long.  The one thing you lose out on is the advancements in the OS and hardware.  You will be amazed how responsive a new Mac is compared to your current machine.  Battery life in particular on a Silicon Mac is truly amazing especially when watching video.  My M1 MBP rarely gets hot and never with video. The only time it does get warm is playing a game that is non-Silicon.  What amazes me is that the game runs faster than on my earlier 2019 MBP even though it is running in emulation.  This machine is a beast!

doggone

We used to have these rumor mills all the time 15+ years ago and the stock was very susceptible then.  Now Apple has a wider platform of products and rumors are less effective.

9secondkox2

It sounds unlikely that apple would pause m2 production, but at the same time, it’s plausible. 

The M3 has been put out there on social media for a while now. People are more informed these days and most have heard that the m2 is “mostly an overclocked m1” etc. 

mranwhile, the big buzz is m3 on 3nm with “huge gains” being mentioned left and right. 

couple that with the reporting that new GPU prowess is forthcoming and it stands to reason that people are willing to wait a few months to plunk down their hard earned multiple thousands on a hot new Mac in an inflation infested market. 

It’s likely part of the reason Apple didn’t run M2 across the product board right away. They’re pretty good at predicting market trends. 

Even so, I have a hard time believing Apple would “pause” production when it seems they weren’t going full speed with M2 production from the start. 

9secondkox2

BlueLightning said:

Suspect ALL laptop and desktop makers will see a slow-down for 1-3 years.  

Along with layoffs at Google, non-engineers will receive a Chromebook by default.  
(As most of you know, Google develops the ChromeOS used on Chromebooks.)  
Refresh cycles will be extended by a year or more.  
Any accessory costing more than $1k, and not available from current corporate stock requires high-level approval.  
Google is cutting back on paid maternity and sick leave and many benefits.  

Before retirement, my former (large) employer (Aerospace firm) was considering changing the Dell and HP refresh cycles from every 3 years to every 4-5 years.  
I have them beat, I'm on a 7-9 year refresh cycle at home (and currently pay for AppleCare Plus by the year, until no longer offered).  
 
Only things that caused me to upgrade from a late 2013 13" MBP (8gb, 256gb, 2.4GHz, 2 total cores) to a 2023 14" MBP (32gb, 512gb, 3.5GHz/2.4GHz, 42 total cores):
1.  Wanted to run a current macOS version.  
2.  Lack of dedicated GPU cores on the old Intel chip caused substantial heating during video viewing.  
3.  Started running into a moderate amount of memory compression and use of virtual storage with old machine.  
4.  Started to worry about parts availability on older machine, and figured battery would give out eventually.  

Right on. My first Mac was a PowerBook g4 from 2005. Lasted me 10 years of every day use. Then I bought an iMac 5k in 2015 that runs like a champ today, 7+ years later. My MacBook Pro 16 has been going strong for 6 abusive years. 7 year old iPad Pro is still running like the day I bought it despite numerous OS upgrades. iPhone upgrade cycle is 4 years for me. Could be longer, but I always find a compelling reason in about that timeframe. This is why I’ll be an Apple customer for life, why I’m very satisfied with my purchases again and again and why everyone who knows me seems to end up in the Apple ecosystem as well. It’s just that much better here. Heck, my mom and dad used to buy a new HO desktop every year. In 2015, Finally got them a MacBook Pro 15 and that’s what they’ve used ever since. Thing still looks and runs like new. 

ravnorodom

22july2013 said:

Macs aren't the only Apple products to use the M2 chip.

I knew it. That explains why my Air Fryer cooks faster than my conventional oven. It M2 obviously. 

charlesn

pb said:

AppleInsider said:

A dubious report claims that Apple allegedly paused production of M2 chips at the beginning of 2023, caused by an apparent slump in Mac sales.

I cannot understand why there is still no M2 iMac, 10 months after Apple unveiled the M2 MacBook Air and 2 years after the original M1 iMac. Could what you say here (alleged production stop and sales decrease) be the reason?

In a word: priorities. As is now known, the base M2 is only a small incremental improvement over the base M1. It made sense to drop the M2 into the complete redesign of the Macbook Air -- an all new design with the latest chip. Same for the recent innards overhaul of the Mac Mini. Plus the bump for Macbook Pros, which at least feature the better Pro and Max versions of the M2 chip. I have the M2 Air and the M1 iMac and I think the real world performance differences between the two are negligible at best and mostly unnoticeable. An M2 bump for an iMac that had just gotten a complete redesign would have only made sense as a marketing ploy. The M3 iMac will be a more significant performance leap forward--although the tasks being done on a typical iMac probably don't need it. 

chadbag

Macs do last a long time.  My personal Mac is a
2017 iMac.  It has 64gb RAM now and an external thunderbolt SSD. Otherwise as I got it.  

Still my every day Mac.  I have a 2014 MBP 15” that my daughter uses regularly/daily for school etc and that I use when we travel.  The iMac replaced it when it developed a battery bulge and i was in the middle of some contract work that couldn’t wait for the machine to get fixed.  It did get a new screen and main board due to this battery bulge that stressed the main board.   Probably because I rarely took it off my desk as it mostly functioned as a desktop for me.  I paid a flat rate replace everything der to Apple to fix it.  Still going strong 5 1/2 or more years since that episode. 

Our family Mac is a 2015 iMac.  

My son does have the original m1 MBA he got as a new college student.  And my day job machine (company supplied, only used for company work — nothing personal) is an Apple Studio with M1 Max.  Interestingly it doesn’t seem all that fast to me but that is probably a consequence of the JAMF management and oversight the company makes us live with.  Seems to kill anything it touches.