Apple has announced a significant multi-billion dollar deal with chipmaker Broadcom to increase its usage of US-made components. The agreement spans multiple years and aims to develop 5G device components that will be both designed and manufactured in America. This partnership aligns with Apple’s previously stated plan to invest $430 billion in the US economy, as revealed in 2021. The move comes amidst escalating trade tensions between Washington and Beijing, particularly in the technology sector.
The ongoing trade dispute has witnessed the US imposing various measures on China’s chip manufacturing industry while funneling billions of dollars into bolstering the domestic semiconductor sector. Major US tech companies have faced heightened scrutiny from lawmakers across party lines regarding their reliance on Chinese manufacturers and components. In response, Apple has been actively diversifying its supply chains, shifting production to countries like India and Vietnam.
In 2020, Apple announced its intention to purchase semiconductors from a Taiwanese chipmaking giant, TSMC, which was constructing a factory in Arizona. Furthermore, in 2022, the company unveiled plans to manufacture the iPhone 14 in India, marking a significant milestone in its strategy to diversify manufacturing beyond China. Apple has been manufacturing iPhones in the southern state of Tamil Nadu since 2017, and the expansion of its Indian manufacturing operations has continued to progress. Last month, the company opened its first retail stores in India, located in Mumbai and Delhi.
The latest deal with Broadcom expands upon the existing partnership between the two companies. It entails the design and construction of components for Apple devices in Colorado and other regions within the United States. Apple’s CEO, Tim Cook, expressed enthusiasm for the collaboration, highlighting the company’s commitment to harnessing American manufacturing’s ingenuity, creativity, and innovative spirit.
As tensions between the US and China escalate, China recently classified products manufactured by US memory chip giant Micron Technology as a national security risk, marking a significant move against a prominent US chipmaker. The Chinese cyberspace regulator declared that the leading memory chip manufacturer posed “serious network security risks.”
Apple’s strategic decision to enhance its reliance on US-made semiconductors and diversify its manufacturing operations aligns with broader geopolitical developments, reflecting a growing emphasis on domestic production and reducing dependencies on foreign supply chains.