TSMC Holds $1 Billion in Apple A20 Pro Chips as DRAM Shortage May Delay iPhone 18

TSMC currently has roughly $1 billion worth of Apple A20 Pro chips sitting in backlog because of a severe shortage of dynamic random access memory (DRAM). With insufficient memory chips to pair with them, the relevant wafers cannot advance to the next stage of packaging and subsequent processing. Apple's next-generation chips typically enter mass production in July or August to build up inventory ahead of pre-orders and initial shipments following the September autumn launch event. In 2026, at TSMC's Fab 3 facility in Longtan, the application of wafer-level multi-chip module (WMCM) packaging to 2-nanometer wafers was blocked by the inability to secure sufficient low-power, high-bandwidth LPDDR5X memory, leaving a large number of A20 Pro chips stranded on the production line.

Apple has previously tried multiple avenues to close the memory gap, including negotiating with existing suppliers and attempting to partner with Chinese memory chip maker ChangXin Memory Technologies (CXMT) for low-cost supply, but those talks did not yield substantive breakthroughs, and Apple ultimately had to accept premium pricing. With explosive growth in the artificial intelligence (AI) sector, AI customers are snapping up high-bandwidth, low-power memory, leaving Apple facing intense competition in the supply chain and having to queue alongside non-AI customers for deliveries. As a result, Apple's overall supply chain has been disrupted, and iPhone assembly progress in China has been dragged down. Earlier, the memory shortage had already pushed deliveries of the new MacBook Air back to September.