Apple Chip Production Reportedly Coming To the US As Company Diversifies Its Supply Chain

by moin moin

Author: Perez Clark

According to several outlets reporting the comments made by Apple CEO Tim Cook, Apple may soon start buying its chips from a U.S. factory. 

In this article, we will look at Apple’s possible move to local fabs, its security reason, and the probable fabs to take such a decision.

Let’s get started.

Apple Chip Production Reportedly Coming To the U.S. As Company Diversifies Its Supply Chain

Apple Will Begin Buying Chips Locally

Apple will begin sourcing its chips from an Arizona-based manufacturer, Apple boss Tim Cook announced last month at a company meeting in Germany.

The company manufactures all its chips while relying on Taiwan-based companies to produce them. TSMC (Taiwan Semiconductor Manufacturing Company) is responsible for the M-series and A-series processors that power MacBooks and iPhones, respectively. 

“We expect to launch significant investments in the United States and possibly Europe as the demand continues to rise,” Cook said.

Options In The United States

Apple’s decision to source processors domestically represents a drastic shift from its dependence on Chinese manufacturers. “We’ve already decided to source our processors from an Arizona-based plant. This plant opens in 2024, so we’ve probably got two, maybe one-and-half years ahead of us,” said Cook.

As it stands, Apple is yet to disclose the identity of its future chip collaborator. But we’ve done our digging and come up with the two most probable companies for that role.

TSMC, as its name implies, works most of its plants in Taiwan. However, the company recently announced targets to launch a fab in Arizona by 2024, directing its resources to make chips based on the latest semiconductor technology. 

Furthermore, TSMC said earlier this month that it’s considering a second chip fab in the same Arizona due to “increasing market demands.”

Intel, the next likely fab, also has chip fabs in Arizona and said it wishes to manufacture chips for Apple under its new division that sources from other companies. Following the U.S. govt’s $50 Bn investment into domestic semiconductor manufacturing, the company also says it plans to build plants in Ohio soon.

Although, being a direct competitor reduces the likelihood of Apple employing Intel. Intel has already declared its vision to produce chips for several companies globally, but it seems unlikely that Apple will integrate Intel’s technology into its ecosystem.

Intel’s superior semiconductor technology is broadly regarded to be among the best but not yet as advanced as TSMC’- this might also influence Apple’s choice when deciding its next microprocessor herald.

Final Word

U.S. govt officials fear that Apple and other tech companies buying expensive parts from Taiwan presents a national risk if China ever decides to take it too far. Cook has also said that while Apple manufactures most of the iPhone on Asian soil, it’s still looking to diversify its supply chain.

In the past two years, it has increased iPhone production in India while shifting a tiny percentage of AirPods production to Vietnam. There have also been reports of ramped iPad, Apple Watch, and Macbook production in Vietnam.

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