A change is coming soon in Apple because they will be using US-made microchips in their product. The CEO Tim Cook confirmed the upcoming expansion of the company at an event by Taiwan Semiconductor Manufacturing Company’s (TSMC) “tool-in” ceremony last week. He announced that the microchips would be produced in a new chip factory in Phoenix, Arizona. These chips will be used in iPhones and MacBooks. This is like unlocking a new milestone, and Cook believes that utilizing American workers alongside TSMC will create a “stronger brighter future”.
US President, Joe Biden, was present at the event and described this expansion as a “game-changer”. Like many tech companies, Apple had to purchase advanced processors overseas previously. By localizing the work within the country, they also encourage and strengthen the US supply chain.
Apple silicon unlocks a new level of performance for our users. And soon, many of these chips can be stamped “Made in America.” The opening of TSMC's plant in Arizona marks a new era of advanced manufacturing in the U.S. — and we are proud to become the site’s largest customer. pic.twitter.com/rBoiEUwZaX
— Tim Cook (@tim_cook) December 6, 2022
About the factory
TSMC is a chip manufacturing company and is one of the largest foundry organizations that holds half of the global market share. They are investing $40 billion in manufacturing chips in America. The company is already serving advanced processors to many electronic companies, including Apple for their latest iPhones, iPads, and Macs.
According to TSMC, the plant can manufacture 4-nanometer and 3-nanometer microchips for Apple devices like A-series and M-series. It will be a $40 billion expanse for the two plants in Arizona. The first plant in Phoenix will start producing chips in 2024. Biden’s administration said that another plant will start its production in 2026. Both of these plants are capable of producing 600,000 wafers per year.
The US manufacturing simulation
Asia is leading in producing the majority of semiconductors whereas the US produces only 10% of the world’s production. Most manufacturing units are in Taiwan, and companies like Apple usually need to outsource the customized chips. Unfortunately, the pandemic over the past few years blocked the supply chains and caused a recent chip shortage problem, costing Apple around $6 billion loss in sales.
Lawmakers in the US and Europe want to secure the supply of microprocessors so that political unrest or regional issues cannot create a scarcity of microchips. The US government partially subsidizing the Arizona factory is one of the many efforts to curb the issue of microchip scarcity. Biden also signed the CHIPS and Science Act into law earlier this year which promised around $53 billion as an incentive for building the chip manufacturing factory in the USA.
The manufacturing industry in Arizona is a masterstroke development for the industry. It may reduce the reliance on factories in Asia, especially in Taiwan. Being Apple’s exclusive chip-making partner, TSMC is taking a significant step in its production. This also strengthens the strategic position of Apple.
Meanwhile, Intel has expressed interest in doing business with Apple as they also plan to build chip factories in Arizona and Ohio.
YouTube: Apple to Work With Taiwan Semiconductor in US
Photo credit: The images used are owned by TSMC and have been provided for press usage.
Sources: Kif Leswing (CNBC) / Chris Welch (The Verge) / McKinsey and Company
