Apple to invest billions in US semiconductors
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The iPhone maker has revealed it has struck a multi-billion dollar deal with Broadcom Inc to design and develop chips made in the US.
Under the agreement, Apple and Broadcom will develop "cutting-edge" components for 5G devices that will be designed and manufactured in the US.
The new sophisticated 5G radio frequency components will be built in several US facilities, including Fort Collins, Colorado, where Broadcom has a major factory, Apple said. They will include film bulk acoustic resonator chips, which are used in radio-frequency systems that help iPhones and other Apple devices connect to mobile data networks.
Neither Apple nor Broadcom disclosed the size of the deal, with the latter saying only that the new agreements require it to allocate Apple "sufficient manufacturing capacity and other resources to make these products".
Following the announcement, shares in chipmaker Broadcom were up 2.2 per cent, hitting a record high. The chipmaker is already a major supplier of wireless components to Apple, with about one-fifth of its revenue coming from the iPhone maker in the past two years.
Apple presented this investment as part of a plan it announced in 2021 to invest $430bn (£346bn) in the US economy. The company has also been diversifying its supply chains, building more products in India and Vietnam and looking at sourcing chips from a new Taiwan Semiconductor Manufacturing Co plant currently being built in Arizona.
"We're thrilled to make commitments that harness the ingenuity, creativity and innovative spirit of American manufacturing," Apple chief executive Tim Cook said in a statement.
"All of Apple's products depend on technology engineered and built here in the United States, and we'll continue to deepen our investments in the US economy because we have an unshakable belief in America's future."
However, the news also comes amid a US-China trade war where semiconductors have taken centre stage, as US tech giants face increased scrutiny to divest from their Chinese manufacturers and components.
The US has restricted China’s access to semiconductor technology since at least 2019 when the Trump administration banned Huawei from buying vital US technology. In August 2022, the US further prohibited the export of four technologies tied to semiconductor manufacturing, citing how they were “vital to national security” and signed a “historic” bill aimed at boosting the domestic production of semiconductors.
In December, China launched a trade dispute at the World Trade Organisation against the US’s chip export control measures, saying the curbs “threaten the stability of the global industrial supply chains”. Earlier this month, the Asian superpower banned its operators from using Micron chips in certain infrastructure projects, due to national security concerns.
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