Worries about whether Apple's iPhone 5 will be delayed due to a shortage of 28 nanometer processors are surfacing again. The semiconductor supply issue is no small matter given Apple missed Wall Street's fiscal third quarter earnings and revenue estimates and has a slower product cycle than rivals like Samsung.
After all, Qualcomm executives on its most recent quarterly earnings conference call indicated that the company was getting a handle on the 28nm manufacturing issue. Qualcomm is the only processor player with integrated 4G, application and modem technology.
Although our outlook for semiconductor volumes in the fiscal fourth quarter has been reduced from our prior expectations, we are ramping our supply of 28 nanometer chipsets. We accept expect this ramp, along with new devices launched for the holiday season, to result in a strong December quarter for our semiconductor business.
That supply is most likely to go into the iPhone 5.
Jacobs did add:
We are continuing to see strong demand for our new Snapdragon S4 and other 28 nanometer chipsets, and that demand continues to exceed our available supply. We will continue to ramp capacity in the upcoming quarters consistent with our prior expectations; however, the constraints on 28 nanometer supply by continuing to limit our potential revenue upside this fiscal year.
Qualcomm said it has contracted with multiple foundries for the September and December quarters. Jacobs added that it will be able to closely match supply and demand as it exits 2012.
Most analysts expect the iPhone 5 to launch in October. Apple isn't saying much and won't.
It's also worth noting that Apple is the largest semiconductor buyer, according to IHS iSuppli. Apple in 2012 will buy $28 billion worth of chips, up from $24 billion in 2011. In other words, if someone is gobbling up all the 28nm chips in the supply chain it's likely to be Apple, which has the clout to ensure it has components for the iPhone 5.
The most likely outcome: The iPhone 5 will launch in October, but supplies will be tight for a few months.