A bang in the computer industry: Apple relies on iPhone chips “Made in the USA”

US President Joe Biden was in Arizona on Tuesday (US time) when the historic announcement was made: Apple will now manufacture the chips for the iPhone and other devices in the United States, not Asia.

This is made possible because the world’s largest chip manufacturer TMSC from Taiwan is building not one, but two huge factories in the southern US state.

TSMC said Tuesday it was investing $40 billion in the two Arizona plants. The first factory in Phoenix should start producing chips by 2024. According to the US government, the second plant is scheduled to open in 2026.

The original deal for TSMC to build a large chip factory in the US came about in 2020 while Donald Trump was still US president. According to the recent announcement, TSMC is tripling its US investments.

Why is that important?

According to US media reports, TSMC’s investment is one of the largest foreign investments in US history and the largest in the state of Arizona.

The US government can thus make its own computer industry and all companies (in the world’s largest economy) more independent from global supply chains.

The planned TSMC factories in Arizona are expected to produce 600,000 wafers per year when fully operational, which the National Economic Council says should be enough to meet the annual needs of the United States.

With the “Made in USA” chips, Apple is responding to fears that China could attack Taiwan and hinder or paralyze local chip production.

The BBC quotes an economic analyst:

What kind of chips are made there?

The TSMC factories could produce the 4-nanometer and 3-nanometer chips used in high-end processors such as Apple’s A-series and M-series and Nvidia’s graphics processors.

The global semiconductor shortage has cost Apple about $6 billion in lost sales so far — and it’s leading to delivery problems during the major holiday season. The company recently announced that it would buy more chips from European and American factories to combat supply problems.

How important is TSMC?

the Taiwanese semiconductor manufacturer is the world market leader in chip production. The largest customers include the American groups Apple, Nvidia and AMD. Taiwan produces about 60 percent of the world’s microchips – more than 90 percent of the most modern chips.

Intel also has chips produced by TMSC. The American company is also building its own chip factories in Arizona and Ohio and hopes to win back Apple as a chip buyer.

TSMC’s factories in Arizona are subsidized by the US government. The US President has enacted the CHIPS and Science Act. This provides billions of dollars in financial incentives for companies building chip manufacturing capabilities on US soil.

In August, Biden signed into law the bill, which will allocate $280 billion for high-tech manufacturing and scientific research. This is to prevent the United States from losing its technological lead to China.

And Europe?

Not least because of China’s blatant threats of war against Taiwan, the EU wants to become more independent when it comes to the microchips that are indispensable to modern societies.

According to media reports from October, TSMC is pushing ahead with plans for its own production in Germany.

In March, Intel announced the construction of a chip factory in Magdeburg, East Germany. The project is funded as part of the “European Chips Act” – a law to strengthen semiconductor production in Europe.

Sources