Half of Tim Cook's 'Made in America' is Right, Half is Wrong

Latest Chips for Apple iPhone and Mac Likely to Be Produced in Taiwan

[Asia Economy Reporter Baek Jong-min] Apple CEO Tim Cook recently declared that ‘Made in America’ semiconductors will be used in the iPhone. Will this truly realize U.S. President Joe Biden’s hope of producing the latest American-made semiconductors?

Apple CEO Tim Cook is speaking at an event held earlier this month at the construction site of TSMC's factory in Arizona, USA. [Image source=EPA Yonhap News]

In this regard, there is a growing expectation that the situation will be half right and half wrong. This is because it is anticipated that Apple will still entrust the production of the latest core chips used in iPhones and Mac series computers to Taiwan’s TSMC. Most likely, for the time being, the A-series and M-series chips used in the latest iPhones and Macs will continue to be manufactured in Taiwan, just across the Pacific Ocean near China.

The latest chips used in iPhones and Macs are typically manufactured using the most advanced processes. Manufacturing with the latest fine processes is necessary to improve performance and reduce power consumption. This is a core competitive advantage for smartphones and computers. For example, the latest Apple A-series chip, the A16 Bionic, is produced using TSMC’s 4-nanometer process. This chip is used in the iPhone 14 Pro. It is estimated that the iPhone 15, which will be released next year, will use the A17 Bionic made with a 3-nanometer process. If such semiconductors were manufactured at TSMC’s Arizona plant in the U.S. and installed in iPhones, it could be called a true American-made semiconductor. However, according to TSMC’s announcement, it seems difficult for Apple to use the latest A-series chips produced in the U.S. because the fine process at the Arizona plant lags behind that of Taiwan.

TSMC has officially planned to introduce a 4-nanometer process at its Arizona plant in 2024 and a 3-nanometer line in 2026. This differs from the Taiwan plant’s 4-nanometer plan in 2022 and 3-nanometer plan in 2023. Naturally, TSMC’s U.S. plant will have a 2 to 3-year gap compared to Taiwan. When TSMC’s Arizona plant begins production in 2024, Apple’s latest A chips are likely to enter the 2-nanometer era. At the time when 2-nanometer process chips are needed, a 4-nanometer chip process is of little significance. It is effectively a secondary process.

Given these circumstances, it can be inferred that TSMC will not produce the latest A and M-series chips in the U.S. The latest chips for iPhones and Mac computers will be produced in Taiwan, while older chips will be produced in the U.S. Currently, chips used in both the latest iPhone 14 and iPhone 12 are produced in Taiwan, but in the future, chips for the latest iPhones will be produced in Taiwan, and chips for existing iPhones will be produced in the U.S. Additionally, Apple may apply different production sites for chips used in the high-end Pro line and the regular products. According to Apple specialist media 9to5Mac, if this approach is followed, the TSMC Arizona plant, which will officially start operations in 2024, is likely to produce older iPhone chips and the second Apple Silicon product, the M2, as its first production items.

The introduction of TSMC’s latest processes in the U.S. is a sensitive issue not only for the semiconductor industry but also geopolitically. TSMC is called the ‘Silicon Shield.’ The U.S.’s firm defense commitment to Taiwan is largely due to TSMC’s presence. From the U.S. perspective, to protect its interests, Taiwan, where TSMC is rooted, must be defended from China. The U.S. will pressure for the latest processes to be brought over, but from the Taiwanese government’s standpoint, it is inevitably burdensome for TSMC to move its latest lines to the U.S. If TSMC’s latest lines are relocated to the U.S., the situation could change.

This content was produced with the assistance of AI translation services.