Apple Orders Fresh Batch of A18 Pro Chips as MacBook Neo Demand Doubles Production Targets
Apple's gamble on a budget MacBook is paying off in ways the company apparently did not expect
Apple's gamble on a budget MacBook is paying off in ways the company apparently did not expect. Just two months after the MacBook Neo went on sale at a starting price of $599, Apple has reportedly doubled its production target and is now asking TSMC to manufacture an entirely new batch of A18 Pro chips to keep the laptops rolling off assembly lines.
According to supply chain analyst Tim Culpan, writing on his Culpium blog, Apple has instructed suppliers to prepare capacity for roughly 10 million units of the first-generation MacBook Neo, up from an initial estimate of 5 to 6 million. The news, picked up by 9to5Mac and other outlets this week, points to a popular product that has become a victim of its own success.
A Budget Mac That Took Off
The MacBook Neo launched on March 11, 2026, after being announced a week earlier. It marked the first time Apple shipped a Mac powered by an iPhone-class A-series chip rather than an M-series processor designed for laptops and desktops. The 13-inch laptop starts at $599 for the 256GB model, with a 512GB version available for $699. Students and educators can pick one up for as little as $499.
The pitch was simple: a real Mac at a price meant to compete with Chromebooks and entry-level Windows machines. Apple paired the A18 Pro chip, the same one that powered the iPhone 16 Pro, with a colorful aluminum chassis available in Silver, Indigo, Blush, and Citrus. It includes a 13-inch Liquid Retina display, 8GB of unified memory, up to 16 hours of battery life, and a fanless design that runs silently.
Reception was strong out of the gate. Reviewers praised the build quality, the fanless design, and surprisingly capable single-core performance that benchmarks place near the M3 and M4 family for everyday tasks. By late April, shipping delays had stretched to two or three weeks. CEO Tim Cook acknowledged on Apple's most recent earnings call that the company underestimated demand and warned that supply constraints would extend into the current quarter. The Neo helped drive Apple's strongest fiscal second-quarter Mac revenue since the pandemic.
The Clever Trick Behind the $599 Price
The most interesting part of the MacBook Neo story has always been how Apple hit such an aggressive price point. The answer involves a manufacturing technique called chip binning.
When TSMC fabricates advanced chips, not every unit comes off the line in perfect shape. Some chips have minor defects, often in one of the GPU cores. The iPhone 16 Pro's A18 Pro shipped with six functional GPU cores, but Apple held onto the chips that came out with a single defective GPU core rather than discarding them. Those slightly imperfect chips became the engine of the MacBook Neo, which is advertised with a five-core GPU.
This is why the Neo could undercut every other Mac in Apple's lineup. The chips were essentially free silicon sitting in storage, originally produced for a phone Apple is no longer making in volume. Apple got to recycle inventory while customers got a Mac at a price that previously seemed impossible.
The Problem With Doubling Production
That clever workaround only stretches so far. Culpan first reported in early April that Apple was running low on the binned leftover A18 Pro chips. With production targets now doubled to 10 million units, the supply of imperfect iPhone chips is essentially exhausted.
To build the additional 5 million MacBook Neos, Apple has had to ask TSMC for what Culpan calls a "hot lot" of fresh A18 Pro silicon. The catch is that these new chips will mostly come off the line as fully functional six-core parts. To keep performance consistent across the Neo lineup, Apple will likely disable one GPU core through software.
It is, in effect, the opposite of the original strategy. Instead of using cheap defective chips, Apple will be paying TSMC for top-tier silicon and then deliberately turning off a working GPU core. The chips will cost more, especially given that TSMC's 3-nanometer N3E process is also in high demand from AI customers and other premium clients.
What This Means for the Price
The big question is how Apple will absorb the extra cost. Industry watchers see two possibilities.
The first is that Apple swallows the higher per-unit cost and accepts thinner margins on the Neo to keep the $599 starting price intact. Given that the laptop has clearly succeeded in pulling Chromebook and Windows shoppers into the Mac ecosystem, there is a strategic argument for protecting the price point.
The second possibility, raised by Culpan and others, is that Apple repeats a maneuver it has used before with the Mac mini: quietly retiring the entry-level configuration. Under that scenario, the $599 256GB model would disappear and the $699 512GB model would become the new starting point. The 512GB version carries higher margins and includes Touch ID, so the math works better for Apple even if it costs a bit more to build.
Either outcome would be a temporary fix. Apple is widely expected to launch a second-generation MacBook Neo in early 2027, presumably powered by binned A19 Pro chips left over from the iPhone 17 Pro family. That refresh would let the company return to the original recycling strategy that made the Neo so cheap in the first place.
A Bigger Story About Apple's Strategy
Behind the supply chain logistics is a more interesting question about how Apple thinks about its product lineup. The MacBook Neo started as an experiment in using leftover iPhone silicon to hit a price point that the M-series chips could not reach. That experiment now looks like a structural shift.
By offering a real Mac for $599, Apple has expanded its laptop addressable market in a way that the MacBook Air, even at $999, never quite did. Reports indicate that assembly partners Quanta and Foxconn have been told to rapidly expand factory capacity across China and Vietnam to keep up with orders. The 10 million unit target, if accurate, would put the Neo in genuine mainstream-laptop territory.
For now, the immediate story is a manufacturing scramble. Apple has decided to chase the demand rather than ration supply, and the consumer impact will come down to whether the company quietly trims the lineup or holds the line on $599. Buyers hoping for the cheapest Mac ever sold should probably not wait too long to find out.
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Apple Magic Keyboard with Touch ID
Apple 40W Dynamic Power Adapter
Satechi DotDisk™ 80Gbps M.2 NVMe SSD Enclosure
Retro Dock Station for Mac mini
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