Apple and Intel give gloomy outlook amid supply chain crunches

29 Apr 2022

Image: © Andreas Prott/

Shares in both companies have dropped as they forecast issues ahead amid the ongoing chip shortage and supply chain constraints.

Apple and Intel both are both predicting weaker-than-expected quarters ahead, as supply chain issues and the global chip crunch continue to take their toll on the tech giants.

While both companies reported steady results in the latest quarter, the ongoing war in Ukraine, supply chain issues in China amid a Covid-19 resurgence and chip shortages have impacted outlooks for the quarters ahead.


In its second quarter ending 26 March, Apple reported revenue of $97.3bn, a 9pc year-on-year increase, while earnings per share were $1.52. Both of these results beat analyst estimates, according to Refinitiv.

“This quarter’s record results are a testament to Apple’s relentless focus on innovation and our ability to create the best products and services in the world,” Apple CEO Tim Cook said yesterday (28 April).

“We are delighted to see the strong customer response to our new products, as well as the progress we’re making to become carbon neutral across our supply chain and our products by 2030.”

The tech giant is seeing positive results from some of its major product launches last year, including the iPhone 13 and the M1-powered Macs.

Apple’s iPhone revenue grew by 5pc in the first quarter to reach $50.5bn, while the sale of Mac computers increased by 10pc to $10.4bn.

However, chief financial officer Luca Maestri warned that several challenges may impact the company in the quarter ahead, including supply constraints caused by Covid-related disruptions and chip shortages that could hit Apple revenue by $4bn to $8bn. He added that Covid-19 lockdowns were affecting demand in China.

Apple’s shares went down by around 2pc after the conference call, Reuters reported.

Maestri added that the war in Ukraine would affect Apple’s year-over-year growth rate as the tech giant paused all sales to Russia, while Cook added that the company was “not immune” to supply chain challenges arising from both Covid-19 and the Ukraine conflict.

iPad revenue was down 1.92pc to $7.65bn, while Apple’s services accounted for $19.82bn in revenue, up 17.28pc.


Intel’s first quarter of 2022 was in line with analyst expectations, with revenue declining 7pc year on year to $18.4bn. Earnings per share were $0.87, just above Refinitiv’s expectation of $0.81.

This comes after a strong 2021, when the chipmaker reported the highest annual revenue in the company’s 53-year history, along with a record-breaking fourth-quarter result.

Pat Gelsinger, Intel’s CEO, said the first quarter was a “strong start” to the year that exceeded expectations. He added that the company has a “$1trn market opportunity” ahead as it focuses on its IDM 2.0 strategy that was announced last year.

“In the supply chain, lockdowns in Shanghai and the war in Ukraine have demonstrated more than ever that the world needs more resilient and more geographically balanced semiconductor manufacturing,” Gelsinger said on the company’s earnings call yesterday.

The chipmaker has been working to create a resilient supply chain by boosting its semiconductor manufacturing operations. Further investment is expected in the coming years as Intel plans to develop what could be the world’s largest semiconductor manufacturing site in the US, while also making significant investments across its European network.

However, shares in Intel dropped by around 4pc yesterday as the company gave a weaker-than-expected forecast for its next quarter, CNBC reported.

“The chip shortage cost the US economy $240bn last year, and we expect the industry will continue to see challenges until at least 2024 in areas like foundry capacity and tool availability,” Gelsinger said.

Several Intel business units saw a rise in revenue in the last quarter, with its data centre and AI group up 22pc year on year and its network and edge group up 23pc.

However, Intel’s client computing group, which includes its PC chip business, saw revenue fall 13pc to $9.3bn, below analyst expectations according to Refinitiv.

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Leigh Mc Gowran is a journalist with Silicon Republic