3rd Monitor is not in Display

A MacBook Air with an M3 chip can support up to two external displays when the laptop lid is closed, one when using the internal display. The problem is not with the dock, but with your computer’s inability to drive more than two displays.

It will depend on the dock, what model are you trying to use? Many windows-type docks require use of DisplayLink drivers, and while those can work on a Mac they're not optimal (e.g. they often do as you describe, not work with the Mac closed).

Personally, I use a Stone Pro dock with my Macs, I have only one monitor connected (a large 5K:2K display), but it supports two 4K displays via the single cable connected to the Mac.

BuyBGS wrote:

Thank you for the post, good to know this but how can I make it work to have 2 monitor display whilst MacBook lid is closed using the same docking station ( connected via USB-C with both external monitors and laptop)? I already tried this as when I close the MacBook lid it locks up the screen.

Macs do not support driving more than a single monitor over a plain USB-C connection.

• If you have a USB-C dock that supports multiple monitors using DisplayPort Alt Mode and DisplayPort MST (Multi-Stream Transport), that won't work because Macs don't support the MST function. There might be enough bandwidth to attach two or more monitors with low resolutions, and a Windows PC might let you do that, but a Mac won't.
• If you have a USB-C dock that depends on some second-class "workaround" (like DisplayLink), you are not going to get any signal on your extra monitors unless you install special driver software.

If you want to attach two monitors to one dock, the dock needs to be a Thunderbolt dock, and the two monitors need to have resolutions of 4K @ 60 Hz or less. They do not need to be Thunderbolt monitors - there are many Thunderbolt docks that allow connection of two "regular" monitors or adapters (in various ways). But the Mac wants to see a wide Thunderbolt "data highway" to the dock before it will offer two video signals over one port.