Apple Is Turning 'Imperfect' Chips Into a Business Advantage

Apple is using binned versions of its custom chips to power lower-cost devices like the MacBook Neo and iPhone 17e, leveraging a decades-old semiconductor industry tactic to reduce waste and expand its entry-level lineup.



A Wall Street Journal report highlights the recently launched MacBook Neo, which uses the A18 Pro processor, the same chip that debuted in the iPhone 16 Pro two years ago. However, the Neo version features a 5-core GPU instead of the original 6-core configuration, with Apple repurposing A18 Pro chips that have one disabled graphics core for use in a more affordable product.


The approach is a common semiconductor industry practice known as binning, and Apple appears to rely on it extensively. The Journal reports that Apple has shipped six different A-series chips with disabled GPU cores in lower-cost devices since 2021 after the fully enabled versions first appeared in premium iPhones.

The strategy extends beyond graphics performance. The report notes that older A4 chips that consumed too much power for the iPhone were later repurposed for the Apple TV, while less efficient S7 chips originally designed for the Apple Watch ultimately powered the second-generation HomePod.

Repurposing lower-bin silicon helps Apple reduce waste while expanding its product lineup with lower-priced devices. The Neo is priced aggressively enough to compete with Chromebooks and budget Windows PCs, while the iPhone 17e targets lower-cost Android devices. Analysts cited by the Journal say the approach gives Apple efficiencies that smaller rivals struggle to match. Notably, the MacBook Neo is already selling below its $599 starting price, with the latest deals listed on the iClarified Mac Price Tracker showing the notebook available for as low as $589.99.

The report says demand for the Neo has been strong enough that Apple is running low on its supply of binned A18 Pro chips and recently placed new orders for additional silicon to maintain production. Earlier supply chain reports suggested those fresh chip orders could pressure margins on the budget laptop.


Apple's chip supply situation has also become more complicated as artificial intelligence demand strains manufacturing capacity at TSMC, the company's sole supplier for advanced processors. During a recent earnings call, CEO Tim Cook warned that some Mac shortages could continue for months due to ongoing supply constraints.

Please download the iClarified app or follow iClarified on X, Facebook, YouTube, and RSS for Mac supply updates.