Home » Business » Apple supports TSMC to build a factory in the United States to roll out “American cores” The ideal is plump but the reality is thin? | blog posts
Apple supports TSMC to build a factory in the United States to roll out “American cores” The ideal is plump but the reality is thin? | blog posts
Apple has once again announced its intention to seek a decentralized supply chain in order to reduce its reliance on Asia for chip sourcing. TSMC founder Zhang Zhongmou confirmed that TSMC will build the most advanced 3nm factory in the United States. However, some analysts believe that if Apple abandons the existing industrial chain with support systems, high efficiency and low cost, and violates the resource allocation law, Apple may lose its market advantage and encounter “lean” reality.
TSMC extension.
To solve the dilemma that about 60% of US chip products are imported from other countries and regions, Apple will work with TSMC, the world’s largest chip foundry, to enable the latter to produce chips in the United States.
A few days ago, Apple CEO Cook said in an internal meeting that Apple plans to buy from a chip factory under construction in Arizona, US, which marks an important step for Apple to reduce its reliance on chips from Asia. Bloomberg believes Cook may be referring to the Arizona plant of its exclusive chipmaking partner TSMC.
The theme of the cover story of the latest issue of Taiwan’s “Business Weekly” is that the first batch of TSMC employees have moved to Phoenix, USA with their families. Taiwan’s “United Daily News” reported that the Arizona plant is the largest overseas investment project planned by TSMC in recent years, with an investment of more than 12 billion US dollars. It is also the first factory of chip cutting advanced 5nm process, and has been highly praised by the United States.
Bloomberg also reported that the United States, once a global chipmaker, has ceded its dominance of this sector to Taiwanese companies, which already occupy more than 90 percent of the world’s production capacity for advanced process chips.
Zhang Zhongmou (middle) attended the relevant APEC meeting in Bangkok and admitted that the cost of production in the United States is at least 50% higher than in Taiwan. AP images
Zhang Zhongmou, the founder of TSMC who attended the APEC meeting in Bangkok, said on the 19th that he clearly knew that the cost of production in the United States was at least 50% higher than in Taiwan, but this did not exclude the ‘use of some of the products that the United States needs most and are more advanced than other companies manufacturing capacity” transferred to the United States.
Zhang Zhongmou said in an interview on Monday (21) that the current 5nm plant in Arizona is the most advanced process in the United States, but TSMC’s most advanced process has reached 3nm. He himself confirmed that TSMC will set up the most advanced 3nm fab in the US.
In addition to the United States, Europe is also an option for Apple to diversify its chip supply chain risk. According to reports, Cook hinted on a recent visit that the European continent will be another source of chips. In Europe, TSMC is also negotiating with the German government and may open a factory in Germany.
Apple started manufacturing the latest iPhone 14 in India in September this year. AP images
In addition to the chips, Bloomberg also revealed that Pegatron, a Taiwanese electronics foundry, has begun assembling Apple’s latest mobile phone, the iPhone 14, in India, becoming the second Apple supplier to produce the iPhone 14 in India. in addition to Foxconn. Reuters reported that at least three of Apple’s global suppliers currently assemble iPhones in India, including Foxconn, Pegatron and Wistron. Foxconn plans to increase the number of workers at its iPhone factory in India by 53,000 within two years, bringing the number of employees at its southern plant to 70,000, government officials familiar with the matter said.
According to US media reports, Apple’s large list of suppliers in 2017, only 18 are located in India and Vietnam, and last year it rose to 37. Previously, Apple only produced older iPhones in India, but it has started producing the latest iPhone 14 in September this year. It is reported that Apple will soon start producing MacBook notebooks in Vietnam.
Indeed, Apple has been restructuring the global supply chain since 2018, but this plan has been slowed down by the impact of the new coronary pneumonia epidemic. During this time, Apple’s supply chain has become more dependent on China.
More than 85% of iPhone 14 Pro production capacity is in Zhengzhou.
Taiwanese media recently quoted Yang Yingchao, the chairman of Kirkland Capital who goes by the nickname “the analyst who knows Hon Hai best,” as saying that Apple’s supply chain cannot be fully withdrawn from mainland China. According to Taiwan media reports, Apple’s 150 largest suppliers have set up factories in mainland China. Currently, 80% of the production capacity of Apple products still comes from mainland China. For example, Foxconn’s Zhengzhou Industrial Park is responsible for about 80% of the production capacity of the iPhone 14 series and more than 85% of the production capacity of the iPhone 14 Pro is in Zhengzhou.
Since 2020, TSMC’s trip to the United States to set up a factory has continued to cause concern on the island. Zhang Zhongmou said in a speech to the Brookings Institution, an American think tank, that the expansion of the US chip manufacturing industry does not have enough talent to support it, at the same time, the manufacturing cost in the United States is too high. from. When Liu Deyin, the current president of TSMC, said that he would further build a 3nm factory in the United States, Zhang Zhongmou bluntly said, “If there are too many factories in the United States, TSMC will lose.”
Some analysts believe that due to the gap in “support of industries, infrastructure and workers’ qualifications”, India and Vietnam cannot replace China’s role in Apple’s supply chain. At the same time, compared with the United States, Japan and South Korea, China maintains advantages in terms of labor costs, logistics speed and government support policies.
Xiang Ligang, chairman of the Information Consumption Alliance, pointed out that Apple’s supply chain has always been highly concentrated in Northeast Asia due to its strong industrial support capabilities, high production efficiency and low cost. Now, Apple wants to break the industrial chain formed under the optimal allocation of global resources, which violates economic laws to some extent. Xiang Ligang believes that the pursuit of larger-scale industrial layout around the world is a manifestation of the spillover effect of the industrial chain. However, behind the current decentralization of Apple’s industrial chain, there are profound geopolitical considerations.
He believes that if Apple insists on breaking the existing industrial chain and trying to restructure, it will face the risk of high costs and reduced efficiency. Taking Foxconn’s slow progress in building a factory in the United States as a precedent, the prospect of a restructuring of the industrial chain by the semiconductor industry in the United States is very uncertain.
He said, “The supply chain needs to be highly concentrated in areas with a complete production system, so that the advantages of high-efficiency and low-cost production can be brought into play. If this law of resource allocation is violated, the advantage market will no doubt be lost”.
In short, when chip companies set up factories in the United States, they will first have to deal with the problem of substantially rising labor costs; in addition, the local corporate culture and the union system will also limit the flexibility of production efficiency, so that they cannot adapt to changing market needs. In addition, Chinese companies occupy an important position in Apple’s supply chain. If Apple builds a new supply chain in India or Vietnam, a large number of supporting enterprises need to be set up simultaneously to demonstrate efficiency and cost benefits. Otherwise, the assembly will be in India and a large number of parts need to be imported from China. Imports and the fragmentation of the industrial chain will become empty talk.
deep Throat
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