Tim Culpan, reporting at Culpium:

This renewed commitment to meeting demand means Apple must also ask TSMC for a hot lot of A18 Pro chips, the same processor used in the iPhone 16 Pro. The system-on-chip is made using TSMC’s N3E process, with the initial production run underway at least two years ago.

However, the chips used in the Neo are actually downbinned versions of the one used in the iPhone, meaning some parts of the die were considered defective or unable to run at its full design spec.

In keeping with industry practice, instead of scrapping these “less-than-perfect” chips, Apple turned off the defect parts and repurposed it for another product. As Ben Thompson of Stratechery wrote at the time, this downbin strategy means the SoCs in the Neo are effectively “free chips.”

With a fresh batch of A18 Pro SoCs, most of the new processors for the Neo will actually be top-tier and only some would fall into the downbin category. This means that in most cases the six GPUs would be fully functional. Apple is likely to deal with the disparity by simply switching off one of the GPUs through software.

The other issue Apple must face is the higher price. While TSMC may forego massive price premiums for a hot-lot run, the SoC will still be more expensive than the first batch because they’ll mostly be top-tier rather than downbin versions. In addition, DRAM prices have escalated since the initial production run, driving the Neo’s bill of materials much higher.

This rumor is deeply perplexing.

As Culpan says, the primary reason Apple opted to use the A18 Pro in the MacBook Neo is that those chips are left over from iPhone 16 Pro production. Apple didn’t need them anymore; it didn’t have a product they’d be used in. They’re already made and ready to go, so why not just put them in the MacBook Neo? And some of those chips ought to be binned in software, allowing Apple to sell them for even less. It’s a classic modern Apple strategy. But the MacBook Neo sold so well — beyond Apple’s expectations — that the company has effectively run out of spare A18 Pros, leaving the question of what to do next.

Apple could either (a) put an A19 Pro or A19 — chips currently in production — in the MacBook Neo, or (b) produce the A18 Pro again. If Cuplan is to be believed, Apple chose the latter strategy, which is inscrutable. The A19 and A19 Pro are more mature, built on Taiwan Semiconductor Manufacturing Company’s latest 3-nanometer process, N3P, which is more performant and more power efficient. I even think using the standard A19 in the MacBook Neo would be a better choice over the binned A18 Pro processors. And the biggest advantage to using the A19 or A19 Pro is that they’re already in production for iPhone 17 models — it’s only logical that Apple would switch over to these processors whenever it exhausts its stockpile of A18 Pro chips.

The only fair argument for restarting A18 Pro production is if it is meaningfully cheaper than ramping up A19 fabrication, but Culpan directly disproves that. And I highly doubt Apple saw the MacBook Neo’s impressive sales numbers and thought that the best business strategy would be to raise the price by $100, a problem it would only face if it restarted A18 Pro production. (Apple could just use binned A19 Pro processors, for instance, and it wouldn’t be forced to discontinue the binned model.) Memory prices are a concern, but I don’t think Apple sees the MacBook Neo as a particularly profitable product. I think it would rather subsidize the MacBook Neo’s increased material costs by raising prices on memory upgrades for more expensive computers and discontinuing lower-end models entirely. (Apple has already begun doing this.)

These are obviously good problems to have. The Mac mini and Mac Studio are in such high demand due to artificial intelligence agent users, and the MacBook Neo is selling like hotcakes. Apple could even justify a meaningful price increase of the MacBook Pro in the fall to further subsidize memory prices. But why restart A18 Pro production? It doesn’t seem like it has any upside and risks alienating the MacBook Neo’s core demographic.