Apple invests 600 billion to deploy the U.S. chip supply chain; TSMC's key technology remains in Taiwan

Apple plans to invest $600 billion over the next four years to strengthen the semiconductor supply chain and actively respond to the Trump administration’s policy promoting chip manufacturing in the United States. After in-depth visits to wafer factories, chip processing plants, and equipment assembly plants, Wall Street Journal reporters found that fully relocating the mature and highly concentrated Taiwanese chip supply chain back to the U.S. remains a highly challenging and daunting task.

Apple pressures suppliers to confirm wafers are made domestically in the U.S.

The starting point of the chip supply chain is GlobalWafers’ factory completed last year, which produces high-quality silicon wafers. The raw materials for silicon wafers come from high-purity quartz sand in North Carolina, melted at 2,500°C into ingots, then sliced and polished. Currently, this factory has a monthly capacity of about 10,000 wafers. Although still in the early stages, Apple engineers have already intervened in the production line for strict review.

As a major customer, Apple applies technical certification to pressure suppliers to source components domestically in the U.S. While Apple does not directly build factories, it ensures that these domestically produced wafers are supplied to subsequent foundries through verification processes. GlobalWafers states that Apple is the most demanding customer, and this high-quality configuration is essential to ensure that iPhone chips operate reliably under extreme precision requirements, avoiding business risks caused by supply chain disruptions in a single region.

Taiwanese TSMC’s U.S. chip technology still lags behind Taiwan

The key to the wafer supply chain is TSMC’s Arizona plant, which covers over 1,100 acres and cost $165 billion to build. According to Wall Street Journal investigations, only one manufacturing line is currently operational, with two more still under construction. Compared to Taiwan’s monthly output of over 100,000 wafers, the Arizona plant’s production remains a very small share.

Moreover, U.S.-produced chips still lag one generation behind Taiwan. TSMC points out that semiconductor manufacturing involves atomic-level etching, requiring extremely complex infrastructure and equipment, which cannot be directly replicated in a short period of time. Currently, the Arizona facility mainly processes blank wafers into chips containing trillions of transistors, with each wafer valued at tens of thousands of dollars. However, reaching Asian-level capacity is expected to take more than ten years.

ASML’s sales grow significantly, but advanced processes remain concentrated in Asia

The core of chip manufacturing lies in ASML’s extreme ultraviolet (EUV) lithography machines. These are considered the most precise manufacturing machines ever made, with each costing between $100 million and $400 million. ASML has a training facility in Phoenix. Its technology uses lasers to melt tin and generate special wavelength light, which is used to etch complex patterns onto wafers with nanometer precision. Slight deviations in transistor placement can scrap an entire wafer.

Data shows that last year, ASML’s sales in the U.S. accounted for 12%, up from 5% in 2021, indicating a significant increase in demand for high-end manufacturing equipment in the U.S. However, even with top-tier equipment, most advanced process capacity remains concentrated in Asia. For Apple, promoting collaboration between ASML and TSMC in the U.S. is a key step in building a local ecosystem, aiming to ensure that the most advanced AI chips can be etched and processed domestically in the future.

Mac Mini becomes a popular AI deployment product, Foxconn launches U.S. production lines

The end of the chip supply chain is assembly plants operated by Foxconn in Houston and other locations. These facilities mainly install AI servers containing Apple’s most advanced chips. Although key technologies previously relied heavily on overseas factories and labor, these factories have now begun recruiting and training U.S. workers on a large scale. Apple plans to start production of Mac Mini at this plant later this year, gradually expanding to serve North American customers.

Despite past experiences with weak demand for Mac Pro in Austin, Texas, the new Mac Mini, capable of running AI models, has seen stable market growth. However, compared to the 240 million iPhones sold annually, the scale of products assembled domestically in the U.S. remains a “drop in the ocean.” Apple’s move is seen as an initial attempt to diversify risks, leveraging tariffs reductions from the Trump administration and TSMC’s investment commitments to bring chip manufacturing and jobs back to the U.S. However, overall, the U.S. still has a long way to go to catch up with Asia’s semiconductor industry.

This article, “Apple invests $600 billion to deploy U.S. chip supply chain, TSMC’s key technology still in Taiwan,” first appeared on Chain News ABMedia.