In an industry where minuscule manufacturing defects usually mean a trip to the scrap heap, Apple has mastered a highly profitable workaround: using imperfect processors to power some of its most popular, lower-cost devices.

This strategy relies on a standard semiconductor industry practice known as “chip binning.” Because printing microchips with microscopic precision is incredibly difficult, a notable percentage of chips leave the assembly line with minor defects—such as a single faulty core out of an otherwise functional graphics processing unit (GPU). Instead of discarding these chips, Apple simply deactivates the flawed core and repurposes the processor for a different tier of hardware.

The most prominent example of this tactic is Apple’s immensely popular, $599 MacBook Neo laptop. The Neo is powered by the A18 Pro chip—the exact same processor found in the premium iPhone 16 Pro. However, while the flagship iPhone utilizes the chip’s full 6-core GPU capability, the version fitted into the MacBook Neo operates on just 5 working cores. By lowering the performance baseline just a fraction, Apple can rescue millions of dollars worth of silicon that failed flagship quality control, giving the company a massive cushion against rising production costs. +1

This method dates all the way back to the original iPad and iPhone 4 era, but Apple has integrated it into its modern business model more effectively than its competitors. By matching binned chips with more affordable hardware—like utilizing slightly pared-down A15 Bionic chips in the iPhone SE—Apple seamlessly segments its product catalog. It keeps manufacturing yields high, reduces overhead, and opens up lower price points to lure in budget-conscious buyers who eventually generate lucrative, recurring revenue through App Store and iCloud subscriptions.

However, the strategy has become a victim of its own success. Demand for the budget-friendly MacBook Neo has grown so intensely that Apple has completely exhausted its stockpile of flawed, salvaged iPhone chips. To keep up with laptop orders, the tech giant has been forced to deliberately order entirely new, fully functional A18 Pro chips from its primary manufacturer, TSMC. This surge in volume places unexpected pressure on Apple’s supply chain at a time when global foundry capacity is already severely constrained by the tech industry’s booming demand for AI hardware.