Chip shortage hurts Apple, Nokia, Daimler and Volvo

Apple CEO Tim Cook

Brooks Kraft/Apple Inc/Handout via Reuters

A continued shortage of chips and other basic materials is forcing some of the world’s biggest tech and auto companies to scale back their targets this year.

Apple CEO Tim Cook warned Thursday that the company is “not immune” to supply chain challenges, noting that the iPad business has “very significant supply constraints” during the last trimester.

The iPhone maker’s chief financial officer, Luca Maestri, said several challenges need to be overcome in the current quarter, including Covid-19-related supply constraints that could hurt sales between $4 billion and $8 billion. . Apple shares fell about 3.7% on Friday after its earnings report.

Semiconductors are an essential piece of technology that enables a growing range of products to perform tasks they otherwise could not. They’re in everything from toasters and kettles to fighter jets and Nintendo Switch consoles.

Elsewhere, Nokia CEO Pekka Lundmark told CNBC’s Julianna Tatelbaum on Thursday that the Finnish telecom company would have grown faster in the last quarter had it not been for supply chain issues.

“The situation has stabilized but it continues to be quite tense,” he said.

“When we talk about semiconductors, we see improvements here and there. It’s pretty vendor-specific at the moment, but when we look at the full year and the second half, we’re still hopeful things will start to improve.” towards the end of the year.”

Automakers, which tend to use less advanced chips, continue to feel the effects of continued chip crunch.

The global chip shortage wreaked havoc on the auto industry in 2021 as many struggled to find the bits of silicon they needed to power features like cruise control and sensors. parking.

Daimler CEO Ola Källenius told CNBC’s Annette Weisbach on Friday that ongoing supply shortages, particularly in semiconductors, are one of the top three challenges in the current business environment. .

Källenius added that the new Covid shutdowns in China, one of Daimler’s biggest markets, could affect supply chains around the world.

Blockages in China add to short-term uncertainty, Lundmark said in reference to Nokia’s chip supply chain.

Volvo Cars CEO Jim Rowan told CNBC’s “Squawk Box Europe” on Thursday that Volvo currently doesn’t have enough of one particular chipset.

He added that the company would be affected by the issue in its second quarter, but said the company had “secured supply” which should help it in the second half.

In a eurozone research note last month, Berenberg economists Kallum Pickering and Salomon Fiedler said car production still lags behind orders.

They said chip sales were recovering, but significant price increases meant the rebound in real terms would likely be below the suggested sales value.

“The process of catching up on the backlog of orders will take time. Businesses will have to work overtime for some time,” they said in the note.

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