February 3, 2023

The homegrown chip revolution has come to Phoenix.

Bloomberg and Getty Images

Taiwan Semiconductor Manufacturing factory in Phoenix.

After a variety of factors, including COVID-disrupted supply chains and a slew of government incentives, global chip giant Taiwan Semiconductor Manufacturing Company (TSMC) announced at a ceremony on Tuesday that it would open two semiconductor chip manufacturing facilities in Arizona — and Apple said it would be one of being the first patrons of the plant.

“Thanks to the hard work of so many people, these chips can be proudly stamped ‘Made in America,'” Apple CEO Tim Cook said at the event. CNBC.

Semiconductor chips are usually made of silicon and are used in almost every electronic device, from smartphones to microwave ovens.

It is often a cyclical industry, but the general shortage of chips that started with the 2020 pandemic became painful for a number of industries, especially automotive manufacturing. And it is estimated to last until 2023. Currently, the US produces only about 10% of the world’s chips.

For Apple in particular, the shortage of chips cost the company about $6 billion in the fourth quarter of last year, Cook estimated. The edge noted. The company has also faced manufacturing headwinds related to China’s “Zero COVID” policy, which only now appears to be abating.

Related: Apple says COVID-19 restrictions in China will delay iPhone 14 Pro and Pro Max

The move to Arizona is also part of the company’s overall efforts in recent years to move production out of China, from moving Apple Watch production to Vietnam and making iPhones to India, per The edge.

Cook went on to say that Apple is “proud to become the site’s largest customer,” via Tweet.

TSMC produces about 50% of the world’s semiconductor chips, according to an expert estimate. But it is based in Taiwan, whose rocky relationship with China led to concerns about political issues slowing production, per CNBCmaking a “Made in America” ​​foundation even more attractive to the company.

TSMC celebrated its new Phoenix plant on Tuesday and said it will be operational in 2024. The company plans to build another facility in the area to open by 2026.

This is also a reflection of a greater gold rush in home chips. President Biden signed the CHIPS and Science Act in August, which includes $50 billion in investment in domestic chip production.

The money has not yet been distributed, but TSMC has said it is requesting it. Intel is also building chip factories in Ohio and Arizona, CNBC reported.

Whatever happens, Cook said at the event that he’s leaning towards Arizona.

“Today we combine TSMC’s expertise with the unparalleled ingenuity of American workers. We invest in a stronger, brighter future, we plant our seed in the Arizona desert. And at Apple, we are proud to help its growth boost,” Cook said at the event.

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