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Apple’s faulty chips are big business for the company, and not just in the MacBook Neo

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Why This Matters

Apple's strategic use of chip binning allows the company to maximize manufacturing yields by repurposing faulty chips across various products, leading to significant cost savings and enabling more affordable devices like the MacBook Neo. However, this practice also raises questions about product performance consistency and quality control, impacting both the industry and consumers. As Apple continues to leverage this approach, it underscores the importance of supply chain optimization in the tech industry’s competitive landscape.

Key Takeaways

Apple has for years been using a procedure known as chip binning to reuse faulty chips in other models of a product, or even entirely different products.

A new report gives further examples of cases where Apple has been able to take chips which failed quality control for one product and subsequently use them in another – and says that the practice dates all the way back to the original iPad and iPhone 4 …

Chip binning

We first drew attention to the process back in 2020 when Apple used it for the M1 MacBook Air.

A number of people commented on what appears to be a comical difference in the new MacBook Air specs, between the $999 base model and the $1249 version. While the higher-spec model has an 8-core GPU – also seen in the new MacBook Pro and Mac mini – the base model only has a 7-core GPU. Apple isn’t asking TSMC to produce a version of the M1 chip with a 7-core GPU instead of an 8-core one. Rather, it is taking those chips which are not capable of running the machine with all 8 graphics cores. Those are designated 7-core versions and allocated to the base model MacBook Air. The benefit of taking this approach is cost savings. Instead of throwing away the chips which don’t quite live up to the full spec, Apple is able to use some of them. That increases yields and thus reduces costs.

MacBook Neo uses binned iPhone chips

We noted that this was key to Apple being able to offer the MacBook Neo at such an attractive price. The company was using binned A18 Pro chips that were rejected for use in the iPhone 16 Pro because only five of the six graphic cores were working.

That strategy was almost too successful. Demand for the MacBook Neo was so high that the company used up all of the binned chips it had saved from iPhone 16 Pro production and is now having to have more of them manufactured.

Binned chips in other Apple products

A Wall Street Journal report highlights a further five products using binned chips:

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