Apple’s supply chain is the envy of the technology industry, but even Tim Cook’s marvel is facing constraints, thanks to AI-driven demand for a component produced by a single supplier.
While Apple’s mighty supply chain made it through COVID without breaking down, artificial intelligence could prove to be the last straw for Apple and other tech firm’s supply chains.
According to a Nikkei Asia report, Nitto Boseki, a supplier of high-quality glass cloth used in printed circuit boards (PCBs), has been facing increased demand for its product, and much of it comes from the AI industry.
While the company is working to increase its production capacity, it won’t see the fruits of its labor until late 2027, meaning Apple may be left scrambling in the meantime.
Apple was an early adopter of Nittobo’s glass cloth for iPhones and never faced any supply issues, as it is usually first in line to receive what it needs to manufacture its devices. However, deep-pocketed AI companies have now put heavy pressure on Nittobo’s production capabilities, meaning Apple and other other tech firms could soon face the risk of supply shortages.
The report says Apple is considering other manufacturers, and is even considering using lower-quality glass cloth to better meet its needs. Unfortunately, that may not be enough compared to pick up the slack from Nitto Boseki.
The AI industry is demanding PCBs of high quality at a ever-increasing rate, shoving Apple farther back into line. Apple competitors like Google and Nvidia are also in need of more supply.
Like everything these days, the cost of developing PCBs is on the rise. The article cites the increasing thickness and hardness of AI server boards, as one contributing factor. Thicker and harder boards means drill bits wear out quicker, requiring more of them to be ordered, adding to the increase in expenses.
Only time will tell whether this will mean that consumers may face shortages when they are in search of a new iPhone, iPad, or Mac later this year.