Apple Suppliers Prioritize Cupertino's Chip Orders, Scale Up Manufacturing For iPhone 13: Report

Apple, Inc. AAPL has found resounding success with the 5G-enabled iPhone 12 series, which had a staggered and delayed launch in 2020.

Reports now suggest that Cupertino's suppliers are working overtime and are giving it priority status in manufacturing the chips that would go into the iPhone 13 that's due for launch later this year.

What Happened: Apple is likely to receive priority status with respect to supply of iPhone 13 chips from Taiwan Semiconductor Manufacturing Company Limited TSM, the DigiTimes said in a paywalled article, citing sources at the Taiwanese foundry.

Other Apple suppliers such as Genesys Logic and Parade Technologies are also scaling up to meet order demand from Apple in the third quarter, MacRumors said, citing DigiTimes.

These orders are about 30%-40% higher than what was ordered in the second quarter, the report said. 

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Why It's Important: After strong performance in 2020, Apple shares have sagged in the first half of this year. This is despite the fairly positive reception to the iPhone 12 series.

A timely launch of the new iteration this year could give the iPhone a head start, as consumer electronics manufacturers are struggling to meet deadlines due to a global semiconductor shortage.

In late May, a DigiTimes report said TSMC has started production of Apple's proprietary A15 bionic chip meant for the iPhone 13.

The iPhone 13, according to Wedbush analyst Daniel Ives, is a "game changer," incorporating a 1-terabyte storage option and lidar across all models.

AAPL Price Action: Apple shares were up 0.17% at $132.53 at last check Tuesday. 

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Photo courtesy of Apple.