When Chinese factories supplying Apple’s iPhone were roiled with COVID-19 outbreaks that resulted in lockdowns and employee walk-outs, it directly impacted global iPhone shipments.
Some estimates suggest that iPhone production could drop as much as 30% as a result of China’s pandemic curbs.
To stem the risk of slowing the production of its devices overseas, Apple has decided to take matters into its own hands. Apple CEO Tim Cook confirmed on Tuesday that chips for Apple’s devices will now be made in the U.S.
“Apple silicon unlocks a new level of performance for our users. And soon, many of these chips can be stamped “Made in America,” he wrote in a tweet.
Cook said that a new plant in Arizona, operated by contract chip maker Taiwan Semiconductor Manufacturing, would mark the start of “a new era of advanced manufacturing in the U.S.”
Apple silicon unlocks a new level of performance for our users. And soon, many of these chips can be stamped “Made in America.” The opening of TSMC's plant in Arizona marks a new era of advanced manufacturing in the U.S. — and we are proud to become the site’s largest customer. pic.twitter.com/rBoiEUwZaX
— Tim Cook (@tim_cook) December 6, 2022
This will be the first time in a decade that Apple will use U.S.-made chips. The California-based company has relied largely on parts manufactured in Asian countries, particularly China. Most of the chips that power Apple devices are made in Taiwan.
The Apple CEO spoke at the TSMC plant under construction in Phoenix, along with President Joe Biden.
“As many of you know, we work with TSMC to manufacture the chips that help power our products all over the world,” Cook said during the speech, according to Bloomberg. “And we look forward to expanding this work in the years to come — as TSMC forms new and deeper roots in America.”
Apple plans to make silicon chips for most of its devices at the Phoenix factory, Bloomberg reported. In the initial years of manufacturing, the plant will produce a smaller quantity of chips and will use inferior technology compared to what Apple would require for its gadgets in 2024.
The company did not immediately respond to Fortune’s request for comment.
TSMC initially planned to spend $12 billion on the plant in Phoenix. The Taiwanese company subsequently increased its investment to approximately $40 billion, which it said is the “largest foreign direct investment in Arizona history and one of the largest foreign direct investments in the history of the United States.”
The chip-maker is reportedly eyeing another factory site in the U.S. as part of a larger effort to reduce the reliance on Asia for making much of the chips.
The factory in Arizona is set to open in 2024.
