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Apple signs major US-made semiconductor deal as China bans Micron

25th May 2023
Kristian McCann

Apple has reached a multi-billion dollar deal with chipmaker Broadcom to use more US-made parts. This highlights a reconsidering of the tech titan’s global manufacturing plans as it pivots investment from China to the US.

Apple has reached a multi-billion dollar deal with chipmaker Broadcom to use more US-made parts. This highlights a reconsidering of the tech titan’s global manufacturing plans as it pivots investment from China to the US.

"We're thrilled to make commitments that harness the ingenuity, creativity, and innovative spirit of American manufacturing," Apple's CEO Tim Cook said in a statement.

The two US companies have agreed a multi-year partnership to develop components for 5G devices that will be designed and manufactured in America. This expands the iPhone maker’s existing relationship with Broadcom, as components for Apple devices will be designed and built in Colorado and other areas of the US.

Apple claim the deal is the continuation of a 2021 plan to invest $430bn in the US economy. Yet the announcement comes amid a tentative time for the chip industry. US lawmakers have been increasingly scrutinising tech titans over their reliance on Chinese manufacturers and components.

Washington and Beijing are currently engaged in a host of tit-for-tat measures against each other’s chip sectors whilst looking to booster their own supply. In October 2022, the US banned the export of certain advanced chips and their manufacturing equipment to China, and now this week, Beijing told Chinese companies to stop buying chips from US company Micron over ‘national security’ claims. Both countries have also announced multi-billion dollar packages to support domestic production of semiconductors.

Shortly after the US ban, Apple froze its plan to buy memory chips from China's YMTC. It also reacted to the TSMC announcement to create a new fab in Arizona following the US’ Chips for America Act by promising to buy semiconductors built there, and more of its devices are now being made in plants outside of China.

These efforts are seen by Silicon Valley companies, who are being hardest hit by such turbulence, as a way to hedge or limit themselves from further suffering or supply chain issues imposed by governments. Yet despite the Biden administration’s ambitions seemingly coming to fruition, with their raft of legislations seeing American companies turning to the US with investment and promises to support domestic production with their purchases, CEO of the world’s most valuable semiconductor company Nvdia Jensen Huang warned of the “enormous damage” continuing down this path would wreak of the US tech industry. “If we are deprived of the Chinese market, we don’t have a contingency for that,” Huang told the FT.

In 2022, Apple announced plans to make the iPhone 14 in India, significantly expanding the company's Indian manufacturing operations in the country which began in 2017. Apple also launched its first Indian retail stores, in the financial hub Mumbai and the country's capital Delhi.

 

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