Apple may run out of iPhones due to skyrocketing demand, chip shortage

After its iPhone 16 took the smartphone world by surprise by becoming the most-sold smartphone of 2025, Apple is once again in the limelight as it has disclosed exceptionally strong fiscal first quarter, securing a 23% year-over-year increase in iPhone sales.

As per what Apple CEO Tim Cook reported, the company sold iPhones worth $85.27 billion during this period, indicating an immensely rising demand for the device.

That being said, Apple is currently running out of sufficient application processors (APs) built on TSMC's 3nm process node.

While demand for iPhone models is very high, Cook noted, the limited supply is restricting Apple's hand to meet it, PhoneArena reported.

The chips concerned are the A-Series application processors manufactured by TSMC, and Cook mentioned that Apple is hyperactively involved in improving its access to these APs. The Apple higher-up did not make any projections beyond March.

Apple's finance chief, Kevan Parekh, told analysts that total revenue for the current quarter is expected to rise by 13% to 16% year-over-year.

Besides supply-demand issues, Cook highlighted another concern regarding memory chips, which are evidently in high demand due to the rise of AI data centres, which is leading to shortages and increased prices.

While admitting that Apple would also have to confront rising memory chip prices, Cook assured that the company is exploring various options to address the situation.