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Apple's long-term demand for 3nm chips may be lower than expected

15-inch MacBook Air

Analyst Ming-Chi Kuo believes that weakness in Apple hardware demand through 2024 is causing a ripple effect that is reaching chip manufacturers, with orders for equipment falling by 30% in the next year.

In a post on Medium on Wednesday, analyst Ming-Chi Kuo is examining extreme ultraviolet (EUV) equipment sales to chip manufacturers. Specifically, ASML may cut production of the expensive gear because Apple and other firms may not need as many chips as the industry forecast.

"In 2023, Apple's MacBook and iPad shipments declined significantly by approximately 30% and 22% to 17 million and 48 million units, respectively," Kuo writes. "The sharp decline is attributed to the end of work-from-home (WFH) demand and diminishing user appeal for the new specifications (Apple Silicon and Mini-LED)."

He goes on to say that there is a "lack of growth drivers" for MacBook and iPad.

This, paired with Qualcomm's lower demand for 3nm, plus lighter demand for Intel's 20A process and Samsung's 3GAP+, is a problem. The main DRAM manufacturers aren't expected to expand capacity until 2025 at the earliest and 2027 at the latest, depending on market conditions.

Apple has noted a contraction in the PC market due to higher-than-expected buys during the height of the COVID pandemic. It has weathered the storm better than competitors, but it remains unclear how long the demand will last.

Apple's M3 chip was originally rumored to arrive in April 2023, then fall 2023. More recent rumors peg the new Apple Silicon Mac chip based on a 3nm process to arrive in 2024, which is reasonable considering that Apple appears to have purchased all of TSMC's 3nm chip production through the end of 2024 for the iPhone.