According to recent reports from Wall Street Insight, Apple is facing severe supply chain challenges due to a shortage of a core material called "low coefficient of thermal expansion (Low CTE) fiberglass cloth". The production and inventory of the iPhone 17 series have become significantly strained, with Apple CEO Tim Cook "extremely anxious" about this situation.

An insider from the supply chain revealed that Cook is pressuring suppliers almost every day to expedite delivery schedules. This material is widely used in the encapsulation of key components such as SoC chips, RF substrate carriers, camera modules, and batteries, making it an indispensable part for ensuring the high performance and stable operation of the iPhone.

The crux of the supply chain crisis lies in the unique properties of the low thermal expansion coefficient fiberglass cloth. This material can match the thermal expansion characteristics between chips and substrates, preventing structural damage caused by temperature changes. It also has low dielectric loss, reducing energy loss during signal transmission, and is widely applied in high-precision fields such as chip encapsulation, battery modules, 5G RF modules, and HDI circuit boards.

Wall Street Insight reported that Honghe Technology focuses on the research and production of mid-to-high-end electronic grade fiberglass cloth, being one of the only two companies globally capable of mass-producing 0.03mm ultra-thin cloth (the other being Asahi Kasei of Japan). The company has also passed Apple's MFi certification. This material is essential for the encapsulation of core components in the iPhone 17, featuring low thermal expansion and low dielectric loss, effectively ensuring the stability of chip structures and signal transmission efficiency.

From Apple's market strategy perspective, the current material shortage is not only a challenge in production but may also impact its competitiveness in the global high-end smartphone market. As the annual flagship product, the iPhone 17 series is a critical pivot for maintaining Apple's market share and brand influence. Meanwhile, Samsung is accelerating the mass production of its 2nm Exynos 2600 chip, which is expected to be used in the Galaxy S26 series, potentially intensifying competition in the track.

In addition, Apple is facing dual dilemmas, as tariffs levied by the U.S. on Apple manufacturing bases remain an issue that Apple must address. Although Apple has obtained partial exemptions, if Apple spends huge funds restructuring its supply chain, it will lead to a significant increase in costs.

The new iPhone 17 series will mark the renewal of Apple's product line, including a possible replacement for the Plus series, the new model "iPhone 17 Air", designed for users pursuing slim designs. It is expected to be released in September 2024. Currently, whether the new iPhone 17 series can ultimately be launched on time at a reasonable price remains to be observed.

On April 15th, IDC released the global smartphone shipment report for the first quarter of 2025. The data showed that thanks to the release of the entry-level iPhone 16e and continuous expansion in emerging markets, Apple's shipments reached a record high of 57.9 million units in the first quarter, growing by 10%, accounting for 19% of the global smartphone market share, ranking second. Samsung ranked first with shipments reaching 60.6 million units, accounting for 19.9% of the market share. Xiaomi ranked third (13.7%), OPPO fourth (7.7%), and vivo fifth (7.4%).

However, Apple's performance this quarter was influenced by factors such as pre-stocking in the U.S. market to avoid tariffs and large-scale shipments to other regions by distributors due to concerns over supply chain disruptions. Moreover, Apple's performance in the Chinese market continued to decline. According to IDC's data, Apple ranked fifth among China's top five smartphone manufacturers in the first quarter of 2025, with shipments reaching 9.8 million units, a year-on-year decrease of 9%, occupying 13.7% of the market share.

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Original source: https://www.toutiao.com/article/7496698660567171595/

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