USA: Apple Inc is getting ready to start sourcing chips for its devices from a factory being built in Arizona, a significant step towards the company's goal of reducing dependence on Asian manufacturing.
As part of a recent tour of Europe, chief executive Tim Cook revealed the information to local engineering and retail staff during a meeting in Germany.
The comments were reviewed by Bloomberg News. Apple may also increase the supply of chips from European manufacturing facilities, he continued.
Cook informed employees that "we've already decided to buy out a plant in Arizona, and that plant in Arizona starts in '24, so we have about two years ahead on that, maybe a little A little less."
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At the meeting, which was also attended by Apple services chief Eddy Cue and its head of retail and human resources, Deirdre O'Brien, he said, "And in Europe, I'm sure we will source from Europe as well as those plans become more Will be revealed."
Representatives for both Apple and TSMC declined to comment. Additionally, Intel is building facilities in Arizona that could begin in 2024.
For many years, the chip maker was an important Apple supplier; However, it's unlikely to win back that business. Apple has replaced Intel processors in Macs and other products with its own components, and the chipmaker has a short history of building on other companies' designs.
As part of the Chips and Science Act, the US government is offering nearly $50 billion in incentives to encourage domestic semiconductor manufacturing.
The current source for the iPhone maker's device processors is a TSMC facility in Taiwan, which accounts for a disproportionate amount of production. Cook said during the meeting that Taiwan produces 60% of the world's processor supply.
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He said that 60 percent coming out of nowhere is probably not a strategic position, regardless of how you may feel and think.
Whether it's the high-end Mac Pro desktop computer, the iPhone, or even the AirPods, processors are at the core of almost every Apple product. Apple made the chips, which were then manufactured by TSMC.
Returning even a small portion of that production to the US after years of relying on Asia would be an important step.
The suitability of the factory for Apple's needs remains an open question. According to the Taiwanese company, the plant will initially be able to produce 20,000 chips per month using a 5-nanometer manufacturing process. It won't satisfy Apple's desire for more sophisticated, 3-nanometer chips in the near future.
Theoretically, TSMC could start advanced production faster than previously said. Apple may also use Arizona manufacturing for simple parts in its products.
Although China and other nearby Asian countries handle the majority of final assembly for Apple products, the company works with a number of suppliers who produce components domestically.
Mac Pro models sold in the US are reportedly put together in Texas, according to the Cupertino, California-based business.
Europe, like the US, is offering incentives to encourage more chip manufacturing. Cook did not mention in his remarks where in Europe the company might source additional chips, but according to Bloomberg News, TSMC is in talks with the German government about opening a plant there.
In Germany, Apple is expanding significantly. The company is trying to replace the Qualcomm components in iPhones with domestic cellular modems, and several hundred local engineers are working on it.
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Cook said at the meeting in Germany that the Chips and Science Act and related initiatives in Europe are set to reshape the chip industry more generally.
To try to recapture market share where the silicon is produced, "I think you'll see significant investment in capacity and capability, both in the United States and in Europe."