Falling Mac sales reportedly forced Apple to suspend M2 chip production

The PC industry is in the midst of a sales slump and the latest report indicates that the Mac might not be immune. While Apple seems to be doing better than its PC counterparts, it isn’t immune to the market’s demands. One of the things Apple did to mitigate the situation was cut production of its M2 chip, according to Korea-based The Elec (translation)–Apple paused production of the M2 altogether this past January and February for the first time since the Apple silicon began.

TSMC, the manufacturer of Apple’s chips, did not send any M2 wafers out to “packaging and testing companies to be cut and assembled as finished chips,” and The Elec concludes that this is because of low demand for MacBooks during the first months of 2023. The publication claims production resumed in March but at “half of the previous year.”

Apple’s decision had a chain effect on the industry. South Korean packaging companies with dedicated production lines for Apple essentially had no work for its employees. And companies in Taiwan, Germany, Japan, and South Korea that provide the materials for production were also affected. Apple picked up M2 production in March but lowered its volume to half.

The M2 MacBook Air and 13-inch MacBook Pro arrived last July and Apple released a new MacBook Pro and Mac mini with M2 Pro and M2 Max processors in late January and none seem to be in short supply. Apple has several new Macs in the pipeline, including a 15-inch MacBook Air and the first Apple silicon Mac Pro, which will presumably use the M2 chip. And rumors suggest the M3 chip will arrive in late 2023 or 2024.

While Apple was the only PC company to see sales growth in 2022, Apple experienced a quarterly revenue decline for the first quarter of 2023. Apple CEO Tim Cook cited “foreign exchange headwinds,” pandemic-related factors, and “the challenging macroeconomic environment” as reasons for the sales slowdown. Apple CFO Luca Maestri did not provide guidance for expected revenue for the second quarter of 2023 but said that the company expects results similar to Q1, where the company reported $117.2 billion in revenue. However, based on The Elec’s report, it seems as though the Mac portion of the quarter could see a downturn.