Apple faces supply chain problem as MacBook Neo demand exceeds expectations

The new MacBook Neo has apparently been a smash hit, and Apple will likely talk up its success at its next quarterly earnings call. But, in what can be considered a good problem to have, Apple is facing a bit of a supply chain predicament. Its stock of A18 Pro chips — the previous-gen iPhone processor that powers the Neo — is reportedly running low according to respected analyst Tim Culpan.

One of the ways Apple got the price of the Neo down was by using leftover, binned, A18 Pro chips that were originally destined for life inside iPhone 16 Pro. If it needs to ramp up production again, though, the laptop’s margins will be squeezed.

The MacBook Neo uses A18 Pros that were essentially discarded during their intended production run for iPhone 16 Pro. Chips that have slightly defective GPU were put aside and reused inside the Neo; this is why the Neo chips only have five working GPU cores, when the iPhone 16 Pro’s A18 Pro chip boasted six.

Culpan says Apple initially planned to make about 6 million MacBook Neos in total, using up the binned A18 Pro supplies. With demand now looking to exceed that amount, Apple is facing a bit of a quandary. Discussions about solutions are apparently taking place with supply chain partners right now.

One option is to pay TSMC a premium to ramp up A18 Pro fabrication again, although it’s unclear how much that would cost on a per-unit basis. Apple may have to bump the price of the Neo to make the math work, preserving its preferred healthy profit margins. This could mean removing the base $599 configuration from sale, leaving only the $699 model.

An alternative route may be to accelerate production of the second-generation MacBook Neo, originally planned for mid-2027, which will use A19 Pro chips (the leftovers from the iPhone 17 Pro family). That is easier said than done. Culpan also suggests Apple may have to simply let MacBook Neo availability dwindle, and bide its time until next year. Obviously, that’s the least desirable option — executives don’t want to leave present demand unaccounted for.