![Image: Apple](/news/photo/202304/4480_4811_1311.png)
Apple had halted production of its M2 Series SoCs used in MacBooks from January to February, TheElec has learned.
While production of the chips resumed in March after the full halt, production volume has dropped by half compared to a year ago, sources said.
This is the first time that the iPhone maker has halted production of its chips __ which it calls Apple Silicon.
From January to February, Taiwan’s TSMC, Apple’s contract chip producer, didn’t send any of its finished 5-nanometer M2 wafers to packaging and testing companies to be cut and assembled as finished chips, sources said.
This can only happen if Cupertino requests it and is likely caused by the low demand for MacBooks, which use the chips, they added.
M2 chips are packaged and finished through flip chip packages and these are done by South Korean packaging companies Amkor and STATSChipPAC Korea. These Korea-based outsourced semiconductor packaging and testing (OSAT) companies receive TSMC’s wafers to finish them as completed chips.
These OSAT companies have production lines dedicated to Apple in their South Korean factories. These lines aren’t allowed to do packaging work for other companies besides Apple so they were essentially halted for two months without any work.
This two months halt has caused packaging material companies to halt the supply of their materials as well.
M2 uses solder balls supplied by a Taiwanese firm; these balls are used to connect the chip die to the package board. The thermal interface material is supplied by Germany’s Wacker. Japan’s Namics provide the underfill material used to fill the bumps. The package lead is provided by South Korea’s Youngil Precision and the adhesive used to attach the lead is supplied by Germany’s Henkel.
Meanwhile, in February, Apple already warned of the difficulties of the PC market during its earnings call for its 2023 first quarter (October to December 2022). At the time, the iPhone maker said it expects short-term difficulty for Apple Silicon (which includes M2). Its Mac PC business recorded US$7.7 billion in revenue during the quarter, down 30% year-on-year. Its revenue in the second quarter is also expected to drop.