Ming-Chi Kuo Refutes Claims of Massive Apple Chip Bottleneck

In a recent post on X, Veteran supply chain analyst Ming-Chi Kuo from TF International Securities has refuted claims that TSMC is sitting on $1 billion worth of unfinished Apple 2nm chips due to memory shortages.

A recent media report claimined that a global DRAM memory shortage had stranded approximately $1 billion worth of Apple processors inside TSMC manufacturing facilities. The report alleged that TSMC was stuck holding semi-finished 2nm processor wafers, or work-in-process (WIP), that could not undergo final packaging because there simply was not enough memory available to pair with them.

To back up its claim, the report pointed to TSMC’s second-quarter 2026 earnings call, where executives noted an increase in total inventory days and attributed it primarily to the ongoing production ramp of its 2-nanometer node.

While Kuo acknowledges that the underlying component bottleneck is genuine, he explains that the supply chain does not operate by blindly mass-producing unfinished silicon when crucial parts are missing.

“My industry checks suggest that Apple has indeed scaled back its hardware shipment plans this year due to memory shortages,” Kuo noted in a recent post on X. “However, Apple plans its processor production at TSMC at least three months in advance, based on the amount of memory expected to be available, rather than having TSMC build large amounts of WIP ahead of time.”

Kuo pointed out that while TSMC occasionally builds work-in-process inventory in advance, doing so when the bottleneck lies elsewhere provides no real operational benefit. In short, Apple would have little incentive to pay TSMC extra money to produce and hold logic chips that cannot be finished.

The analyst added that both companies are renowned for world-class supply chain management, making such a massive coordination failure highly unlikely.