Apple is huddling with Intel and Samsung to move production of the processors for the iPhone and iPad maker’s devices stateside, according to a report published Tuesday by Bloomberg.
The financial news service, citing people familiar with the deliberations, reported that the “exploratory discussions” were aimed at providing Apple with a secondary option to Taiwan Semiconductor Manufacturing Co. (TSMC), a long-time Apple partner.
“All companies are looking at diversifying their supply chain now — for good reason,” observed Jack E. Gold, founder and principal analyst at J.Gold Associates, an IT advisory company in Northborough, Mass.
“You don’t want to have one single point of failure, if, God forbid, something happens to Taiwan,” he told TechNewsWorld. “Whether China attacks or there’s a major earthquake or tsunami or who knows what, it’s never good to have a sole source of supply.”
William Kerwin, a senior equity analyst with Morningstar Research Services in Chicago, agreed. “Shifting semiconductor production to the U.S. can provide supply chain diversification, which hedges against both pricing and potential geopolitical risk for Taiwan,” he told TechNewsWorld.
“It is favorable for relationships with the U.S. government too, which wants to drive expanding U.S. domestic chip supply,” he added.
But he warned that the move has a price. “No one produces chips as efficiently, or as cheaply, as TSMC,” he said. “Even TSMC’s U.S. plants in Arizona don’t come close to its efficiency in Taiwan.”
“So it’s a short-term cost with potentially long-term benefits,” he continued, “if it leads U.S. production to approach anywhere near parity with Taiwan.”
Powerhouse With All the Cards
Meghan Ostertag, a policy analyst at the Information Technology & Innovation Foundation (ITIF), a science and technology think tank in Washington, D.C., explained that semiconductors are among the most complex objects manufactured on Earth and are essential to every product from cars and military drones to cell phones and laptops.
“The United States is highly dependent on imports of semiconductors, with a significant share imported from East Asia, particularly Taiwan,” she told TechNewsWorld. “Having such a high dependency on imports for such a critical product creates vulnerabilities for both economic and national security.”
“We saw this play out during Covid, when the pandemic disrupted supply chains, leaving the U.S. auto industry with a shortage of semiconductors and leading auto manufacturers to suspend North American production,” she said. “Future disruptions could similarly affect critical sectors, including defense production.”
The specter of future disruptions appears to be driving Apple’s talks with chip makers. “Apple is finally getting out from under the thumb of global chaos and the constant ‘what-if’ of a conflict in Taiwan,” argued Mark N. Vena, president and principal analyst at SmartTech Research, a technology advisory firm in Las Vegas.
“By building chips at home, they’re basically buying an expensive insurance policy against overseas political drama. It turns the U.S. from a customer that’s crossing its fingers into a tech powerhouse that actually holds the cards,” he told TechNewsWorld.
Rob Enderle, president and principal analyst with the Enderle Group, an advisory services firm in Bend, Ore., agreed the move is insurance for Apple. “Apple isn’t necessarily looking to dump TSMC, but rather to ensure that if a ‘Day X’ scenario occurs — like a conflict in the Taiwan Strait, which is increasingly likely — its entire product lineup isn’t wiped out overnight.”
“Additionally,” he continued, “as AI demand consumes more of TSMC’s global capacity, Apple needs a ‘Plan B’ and ‘Plan C’ to ensure its own growth isn’t throttled by lack of supply. Finally, they need a hedge against potential future political decisions like tariffs, boycotts, embargoes, and blockades,” he said.
Operational Challenges
Moving chipmaking to the U.S. will pose some operational challenges for Apple. “Apple is going to find out the hard way that you can’t just ‘copy-paste’ the incredible speed and talent density of an Asian tech hub into the Arizona desert,” Vena predicted.
“They’re going to be fighting a massive uphill battle to find enough specialized engineers to actually run these places 24/7,” he said. “It’s a logistical nightmare waiting to happen as they try to rebuild a 40-year-old ecosystem from scratch on American soil.”
The ITIF’s Ostertag acknowledged that shifting semiconductor production to the United States introduces operational challenges — including higher labor, utility, and compliance costs than in many other regions, along with a shortage of skilled workers — but she maintained those pressures would be largely transitional.
“In response, companies are investing in domestic workforce pipelines, expanding apprenticeships and strengthening semiconductor engineering programs at community colleges and technical institutions to address talent gaps and support long-term industry growth,” she added.
Enderle raised the issue of quality. “TSMC is very predictable. Intel and Samsung must prove they can match TSMC’s yield — the percentage of functional chips per wafer,” he explained. “Apple is reportedly concerned that these partners may not yet offer the same scale or specialized ‘node’ technology as TSMC.”
He added that diversifying chipmakers would also complicate Apple’s supply chain. “Managing production across multiple foundries — Intel, Samsung, and TSMC — adds significant logistical and engineering overhead to ensure chip performance remains consistent across different manufacturers.”
Apple’s Industry Influence
Should there be a renaissance in chipmaking in the U.S., it could have a substantial impact on the nation’s economy. “Semiconductor fabrication facilities produce thousands of high-wage and high-value-added jobs for American workers, benefitting both the workers directly and the surrounding local economies,” noted Ostertag.
She added that greater domestic semiconductor manufacturing would also improve the trade balance by reducing reliance on imported chips.
While reviving chipmaking in the U.S. would bring back more manufacturing and jobs, how much and how many is highly debatable, asserted Tim Bajarin, president of Creative Strategies, a technology advisory firm in San Jose, Calif. “The infrastructure of semiconductor manufacturers in Taiwan, Korea, Vietnam, and other countries will still have the lion’s share of the business even if the U.S. gains more local semiconductor facilities,” he told TechNewsWorld.
Vena asserted that a semiconductor revival would create a massive “help wanted” sign for high-tech jobs in the U.S. “But let’s be real,” he said. “American labor and construction aren’t exactly budget-friendly. We’re trading the cheap, don’t-think-about-it costs of Asia for a much pricier domestic setup that’s going to be felt all the way up the balance sheet. It’s great for the local economy, but it’s definitely going to put a dent in the old maximum-profit playbook.”
He added that a move by Apple to bring its chip production to the U.S. could have an outsized impact on the tech industry. “Apple is the cool kid of the tech world,” he said. “If they jump in the pool, everyone else is going to start checking the water temperature.”
“If Apple proves that U.S. manufacturing is actually viable and not just a PR stunt, you can bet companies like Nvidia and AMD will be right behind them,” he continued. “It’s basically the signal the rest of the industry has been waiting for to finally stop being so dependent on a single corner of the globe.”
