Apple CEO Tim Cook confirmed that Apple will buy U.S.-made microchips at an event in Arizona on Tuesday, where President Joe Biden also spoke, CNBC reported. Cook said Apple would buy processors made in a new Arizona factory, according to a video from the event.
According to CNBC, the chip factories will be owned and operated by Taiwan Semiconductor Manufacturing Company, the biggest foundry company with over with over half of the global market share. TSMC produces the most advanced processors, including the chips in the latest iPhones, iPads and Macs.
The plants will be capable of manufacturing the 4-nanometer and 3-nanometer chips that are used for advanced processors such as Apple’s A-series and M-series and NVIDIA graphics processors.
According to CNBC, TSMC currently does most of its manufacturing in Taiwan, which has raised questions from U.S. and European lawmakers about securing supply in the potential event of a Chinese invasion or other regional issues. Chip companies such as Nvidia and Apple design their own chips but outsource the manufacturing to companies like TSMC and Samsung Foundry.
The Verge reported that the Phoenix, Arizona plant include not only Apple, but also AMD and NVIDIA as customers. The new facility means a more secure supply of chips and quicker production timelines. The chip fabricator, TSMC, also said today that it would start construction on a second factory in Phoenix next year, increasing the site’s annual output.
According to The Verge, TSMC is a dedicated foundry, meaning it builds the chips designed by other companies. Apple, AMD, and NVIDIA are among its largest customers, and even Intel relies on TSMC to make the most advanced processors.
The first Phoenix fab will make 4nm processors (improved from the originally disclosed 5nm), with production slated to begin in 2024. The second fab will come online in 2026 and produce 3nm chips, which are the smallest and most complex processors in production today.
Engadget reported that the combination of the two plants will together make about 600,000 chip wafers per year. TSMC is spending $40 billion on the factories, but they’ll be partly subsidized by the U.S. government through the CHIPS and Science Act meant to incentivize US semiconductor manufacturing.
According to Engadget, while the plants won’t come online for two years, news of the expansion comes at an appropriate time. Apple has warned of iPhone 14 Pro manufacturing setbacks due to China’s COVID-19 policies. In theory, American facilities would have reduced the impact of those restrictions. Although many parts could still be made overseas even after TSMC’s expansion, there could soon be a greater chance of Apple devices reaching your door in a timely fashion.
Overall, I think this might be a good thing for American workers because the two plants are going to need to hire a lot of people. This can also be good for American companies that rely on the chips the plants will make, and also for consumers who use the product that require those chips.