Malcolm Owen
The White House is in talks with major chip producers Intel and TSMC, in an attempt to try and get more processor production to take place within the United States, a move that could eventually lead to some of Apple's A-series chips being made within the country.
The Trump administration is keen to start the development of new chip foundries in the United States, to cut down on the reliance of facilities in Asia for critical technology, a report claims. The potential for supply chain disruption, as evidenced by issues created by the coronavirus pandemic, has prompted officials to try again at convincing firms to shift some manufacturing to the United States.
Administration officials are in talks with both Intel and TSMC, correspondence seen by the Wall Street Journal, about building new facilities within the United States. While Intel does already have some chip production based in the United States, the talks center around expanding US production for the company, while TSMC would be building its first chip factory.
Intel VP of policy and technical affairs Greg Slater reportedly said Intel is "very serious about this," with its plan involving the creation of a plant for advanced chips that are securely made for government use, as well as some other customers. "We think it's a good opportunity," said Slater, "the timing is better and the demand for this is greater than it has been in the past, even from the commercial side."
For TSMC, it has allegedly been in talks with officials in the Commerce and Defense departments, along with major client Apple, about potentially building a factory in the United States. While it would have similar aims as Intel for government and military chip production, the inclusion of Apple would seemingly suggest somewhere down the line TSMC believes the iPhone maker may want to use its regional facility.
"We are actively evaluating all the suitable locations, including in the U.S., but there is no concrete plan yet," a statement from TSMC about new facilities reads.
The US government has previously applied pressure on TSMC to create a facility in the country, specifically for sensitive components used by the military, such as in fighter jets and satellites. In January, TSMC, attempted to kill off speculation about a country, claiming at the time it had no short-term plans to shift production to the US.
Though best known for Apple's A-series chip production, TSMC has a number of clients across the industry, including a number of US-based tech firms. It has made chips for Qualcomm, Nvidia, Broadcom, AMD, and even Intel, so having a US-based facility may enable those other clients to design advanced chips for use by the US military.
The creation of a TSMC foundry in the US, as well as the talks with Apple on the subject, may be a step towards Apple moving some of its production to within the United States. On face value, it would also assist the Trump administration in achieving President Donald Trump's frequent demands for US companies to bring more manufacturing back to the country, rather than offshoring it to China and other major production hubs.
Even so, a US-based TSMC foundry would not immediately allow Apple to make iPhones in the United States. Apple would have to either make considerable changes to its existing and well-established supply chains to shift production away from Asia to the United States, or create new products that are made within the country, using an entirely separate supply chain from its currently-used processes.
Though the report centers around Intel and TSMC, there is also talk about Samsung, which has a chip factory in Austin, Texas. One source claims some officials are keen to assist Samsung in expanding its current contract-manufacturing operations to create more advanced chips, again for potential government use.
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Amber Neely
30 Comments
Most of Intel's chip manufacturing facilities are already in the United States (Oregon and Arizona) so I am not sure what they are talking about. TSMC (aka Taiwan Semiconductor Manufacturing Company) has manufacturing facilities in Taiwan, Mainland China and the United States. While I believe we all want more manufacturing in the United States, there are a couple of issues to keep in mind 1) Since Taiwan, China, South Korea, and Singapore have done a MUCH better job of containing the spread of Coronavirus than the United States what benefit would there be if all these facilities existed in the US? It might even cause more supply chain disruption. 2) These are well-established Asian facilities which would take years to bring back IF even feasible from a financial and logistical standpoint. There is a reason why companies like Apple Manufacturer most of their product in Asia. Who wants to pay $2,500 for an iPhone?
Protectionism and economic populism may appeal to parts of the country that have lost significant manufacturing jobs, but this is not something I believe most tech multinationals would see as in the best interests of their shareholders and customers. Capitalism isn't a sentimental system. It's a system that maximizes shareholder value while delivering the best innovative products at the lowest possible prices. That's the stark reality and unless the US embraces 'state capitalism' (as the Chinese Communist Party as done) I don't see this happening. Not trying to make a political argument. Just an observation based on reality.
Wouldn't businesses be more compelled to move to countries with consistently predictable government? The USA has been experiencing an unusual amount of political instability in the last few years, what is the business case to heavily invest in a country where the tables may be flipped on you on a moments notice.
We (Americans) sold our souls to China decades ago. China now has the technology edge. They can manufacture electronic gadgets by the billions. They have the technology and they have the workforce and they have the experience. It took a pandemic for some of us to realize ALL of our drugs, ALL our PPE, most healthcare hardware, comes from China because they can build it faster and cheaper. Search Amazon for non-essential surgical masks, hand sanitizer, etc. It’s ALL from China, not a single U.S. manufacturer to be found. Wow, Apple, GM, started making PPE shit. What happens when the crisis is abated? What happens to all those ventilators being cobbled together? Will they be stored in a gigantic Raiders of the Lost Ark warehouse somewhere in New Mexico?
The U.S. Treasury is borrowing $3 Trillion to cover the various stimulus legislation. How does the Treasury borrow money? They sell U.S. Treasury notes, that’s how. Any guesses as to who has been buying most of those treasury notes the past few decades? Come on now, you should know this. It’s CHINA of course. China owns big chunk of our debt these days, second only to Japan as of 2019. The U.K. owns a lot of it too. And a lot of Arab sheiks own a bunch. When will we be labeled as a credit risk?