Tech earnings this quarter have been, to the shock of nobody, excessive. However amid the record-settling revenues, the looming specter of the worldwide semiconductor scarcity was the fly within the ointment.

Whereas just about not one of the main tech corporations sounded too involved on their calls, part shortages have been referred to as out by Apple, Microsoft, Samsung, Tesla, AMD, and Intel as potential issues for both their earlier or upcoming quarter.

Apple had already warned that half shortages might affect its iPad and Mac companies at its Q2 earnings to the tune of $3 billion to $4 billion. CFO Luca Maestri mentioned on final week’s Q3 earnings name that it was in a position to maintain these losses primarily restricted to iPads and below $3 billion, in what was positively a win for Apple. However it got here concurrently a warning from CEO Tim Cook dinner that provide constraints might affect the iPhone — crucial and profitable a part of Apple’s product lineup — within the coming quarter, which might be a much more regarding issue for the corporate.

Microsoft, too, referred to as out a decline in Home windows OEM income (a drop of three {2d266c2b7f7b21b9d5247541775384085ff4c78fbe34d1f6195ea0b207eacd24}) as being instantly brought on by provide chain constraints, at the same time as its cloud income continued to soar. And naturally, whereas Microsoft’s next-gen Xbox Collection X and Collection S consoles proceed to promote each unit Microsoft could make, there’s simply merely not sufficient provide to go round but.

It was an identical story at Samsung, which posted elevated income and working revenue yr over yr, carried by large demand from its semiconductor enterprise (which accounts for over a 3rd of its income and greater than half its revenue). However Samsung was additionally weighed down by much less total demand and income for its cell phone enterprise, which declined in comparison with final quarter as a consequence of a mix of provide shortages and the seasonal shopping for cycle.

Different corporations, like Tesla, have taken extra drastic steps to face the scarcity: the corporate needed to develop new firmware for no matter chips it might get its palms on, however CEO Elon Musk was blunt about the truth that semiconductors could be a giant concern for the corporate. “The worldwide chip scarcity scenario stays fairly critical,” he mentioned, highlighting difficulties Tesla skilled getting chips that energy important elements of its vehicles — particularly the airbags and seatbelt modules.

And naturally, the chipmakers themselves are calling out considerations. Intel CEO Pat Gelsinger famous on an earnings name that the scarcity might final by means of 2023 throughout the {industry}, noting that he expects that “it would take one other one to 2 years earlier than the {industry} is ready to utterly meet up with demand.” The corporate additionally referred to as out “persistent industry-wide part in substrate shortages” — which means that Intel doesn’t anticipate to have the ability to get sufficient of the uncooked supplies it must make chips — regardless of excessive demand for its processors. Which will result in “notably acute” shortages for Intel’s shopper chips within the upcoming third quarter — which might be proper when PC gross sales are inclined to kick up for back-to-school college students.

AMD CEO Lisa Su took a extra optimistic word, explaining in an interview with Yahoo Finance that whereas provide should still be “tight” for the remainder of 2021, issues have been getting higher all year long. “As we undergo the tip of this yr and definitely into subsequent yr, I feel issues will enhance,” she mentioned.

Taken as a complete, there are two developments to see right here: the primary is that large tech corporations aren’t letting provide points stand in the best way of posting report revenues. However it’s additionally clear that the affect of the shortages may be very a lot one which’s nonetheless in progress, and till capability begins to extend or demand begins to die down, considerations over shortages, product delays, and hard-to-find devices will seemingly solely develop as we head towards the busy vacation procuring season.

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