Apple is grappling with a critical supply chain challenge for its MacBook Neo, the most affordable MacBook ever released. According to analyst Tim Culpan of Culpium, the laptop’s popularity has depleted its stockpile of binned A18 Pro chips—defective iPhone 16 Pro components with a 5-core GPU repurposed for cost savings. These chips, manufactured via TSMC’s N3E 3nm process at maximum capacity, are now running scarce despite Apple’s initial plan to produce 5-6 million units.

The dilemma intensifies as demand outpaces supply, forcing Apple to weigh costly solutions. Restarting A18 Pro chip production would require disabling an additional GPU core, raising expenses. Alternatively, reallocating chips from other devices or prioritizing the $699 model with 512GB storage and Touch ID could alienate budget-conscious buyers, contradicting Apple’s affordability messaging. Discontinuing the $599 variant seems unlikely, given its role in attracting new macOS users.

Culpan notes Apple might accept lower profit margins to maintain the $599 price point, betting on ecosystem lock-in. However, delays in second-gen MacBook Neo shipments—currently 2-3 weeks—risk frustrating buyers. CEO Tim Cook recently hailed the Mac’s “best launch week ever” for first-time customers, underscoring the model’s success. Yet, the shortage highlights vulnerabilities in Apple’s chip strategy, with no immediate fix in sight.

TSMC’s constrained N3E production and the scarcity of “free” binned chips create a precarious balance. While Apple could accelerate A19 Pro chip integration for the MacBook Neo, that too would strain resources. The situation reveals a high-stakes trade-off between cost efficiency and meeting surging demand, with long-term implications for Mac sales and component partnerships.