Apple plans to source chips from Arizona plant by 2024

It's diversifying from its initial reliance on Taiwan-made chips.
Loukia Papadopoulos
Apple plans to source chip from America.jpg
Apple plans to source chip from America.

William_Potter/iStock 

Apple is diversifying its supply chain away from Taiwan as it has plans to buy some of its chips from a factory in Arizona, company CEO Tim Cook said last month at an internal meeting in Germany, according to a report by Bloomberg News published on Tuesday.

Manufacturing A-series and M-series processors

All of the firm's current processors are sourced from factories in Taiwan. Although Apple currently designs its own chips, the Taiwan Semiconductor Manufacturing Company (TSMC) is responsible for manufacturing the A-series and M-series processors that power the ever popular iPhones and Mac computers.

The company would now be moving this production to the United States in about two years time.

“We’ve already made a decision to be buying out of a plant in Arizona, and this plant in Arizona starts up in ’24, so we’ve got about two years ahead of us on that one, maybe a little less,” Cook said, according to Bloomberg.

TSMC will have some competition though as Intel also operates chip foundries in Arizona and has said it wants to win Apple’s business. TSMC has previously revealed plans for two factories in Arizona to open in 2024 and beyond to cater to “strong customer demand.”

Apple plans to source chips from Arizona plant by 2024
Apple's chips are mostly made in Taiwan.

The firm will be focusing on chips that use the latest manufacturing technology and has additional ambitious plans to build several other fabs in Ohio.

There's no denying that there is a global chip shortage. In November of 2021, Japan committed $5.2 billion (roughly 600 billion yen) toward providing support for semiconductor manufacturers in a bid to help solve the world's ongoing chip-related issues.

American politicians express concerns

But that’s not enough. In the U.S., politicians have expressed concerns that having companies like Apple source so many parts from Taiwan could create chaos if China ever decided to invade the small nation. According to Cook himself, an overwhelming 60 percent of the world’s processors come out of Taiwan.

Meanwhile, experts have stated that the chip shortage will continue well into the end of 2022 and 2023. Intel CEO Pat Gelsinger told Nikkei in December of 2021 that he expects the situation to continue well into 2023 partially due to the coronavirus crisis.

"COVID disrupted the supply chains, causing it to go negative. Demand exploded to 20 percent year-over-year and disrupted supply chains created a very large gap and that exploding demand has persisted," he said. 

Although Apple assembles its iPhones and other devices on China’s mainland, it sources parts from many different nations. Cook was now quoted as saying that he was even considering buying chips from factories in Europe to meet ever increasing demand.

Meanwhile, the U.S. is trying to keep as many semiconductor firms inside the country as possible. It passed the CHIPS Act earlier this year which contributes about $50 billion in financial incentives for these types of firms to thrive on American soil.

 

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