Without a doubt, the MacBook Neo is a smash hit. Apple talked about the success of the new laptop on its most recent earnings call, warning that supply constraints will continue into the current quarter.

Analyst Tim Culpan today reports that Apple now plans to make about 10 million MacBook Neos in total, about twice as many as it initially ordered. This will entail its chip supplier TSMC manufacturing a new run of A18 Pro chips to power the machines, which Apple will inevitably have to foot the bill for.

For the first batch of MacBook Neo production, the company used left-over stock of A18 Pro chips originally destined for iPhone 16 Pro.

Here’s why: yield rates for advanced chip production is not perfect, and that means some chips come off the line with partially-defective cores. The iPhone 16 Pro featured an A18 Pro with six GPU cores. Rather than simply discard the chips that had one defective core, Apple kept them in storage and used them inside the MacBook Neo, which is advertised as being powered by an A18 Pro chip with five GPU cores.

But, as reported by Culpan last month, the company is running out of the binned leftovers. That means it now needs TSMC to make a new batch of A18 Pro chips, to go inside the 5 million extra MacBook Neos the company has now ordered the supply chain to build.

The order for new chips will obviously cost Apple more money than the ‘free’ chips it had sitting around for the initial Neo stock. It’s unclear if the company will simply swallow those costs and have lower profit margins on the Neo going forward, or somehow pass those costs along to the consumer.

Culpan speculates that Apple could repeat the trick it has done with the Mac mini, where it will stop selling the entry-level $599 256 GB MacBook Neo in future and only sell the $699 512 GB model, which sells for $100 more and has bigger margins. This would enable Apple to better mitigate the incremental costs of the chips.

This would be unfortunate, given that part of the Neo’s appeal is its surprisingly low price. But maybe Apple has other ideas about how to tackle this. We don’t really know yet. And whatever the solution, it would only be temporary as Apple is expected to launch the second-generation Neo in early 2027 featuring A19 Pro chips (presumably depending on the binned chip rejects of the iPhone 17 series).

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