no doubt MacBook Neo is a hit. Apple touted the success of the new laptop in its most recent earnings call, warning that supply constraints will continue into the current quarter.
Today, analyst Tim Kulpan reports Apple now plans to produce a total of about 10 million MacBook Neos, roughly double what it originally ordered. This will result in chip supplier TSMC producing new A18 Pro chips to power the machines, and Apple will inevitably have to foot the bill.
For the first batch of MacBook Neo production, the company used the remaining stock of A18 Pro chips originally intended for the iPhone 16 Pro.
Here’s why: yield rates for advanced chip manufacturing aren’t perfect, and that means some chips come off the line with partially defective cores. The iPhone 16 Pro has an A18 Pro with six GPU cores. Instead of simply throwing away chips with one defective core, Apple kept them in stock and used them in the MacBook Neo, which was announced to feature the A18 Pro chip with five GPU cores.
However, as Culpan reported last monththe company is running out of trash. That means the company now needs TSMC to make a new set of A18 Pro chips to go inside the 5 million additional MacBook Neos it’s ordered to build its supply chain.
The order for the new chips will cost Apple more money than the “free” chips it is sitting on for its initial Neo stock. It’s unclear whether the company will simply absorb those costs and have a lower profit margin on the Neo, or somehow pass those costs on to the consumer.
Culpan speculates that Apple may repeat the trick it did with the Mac mini, where it will stop selling the entry-level 599,256GB MacBook Neo in the future and sell the 699,512GB model, which sells for just $100 and has bigger margins. This will allow Apple to better reduce the rising cost of chips.
That’s unfortunate, given that part of the Neo’s appeal is its surprisingly low price. But maybe Apple has other ideas about how to deal with it. We really don’t know yet. And whatever the solution is, it will be temporary, as Apple is expected to introduce the second-generation Neo with A19 Pro chips in early 2027 (probably depending on the iPhone 17 series’ rejection of the boxed chip).
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