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Apple to Source Chips From Arizona Starting in 2024
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A step in the right direction, but ...
www.cnbc.com
Apple will 'take years' to diversify away from China, says Counterpoint Research
It will be years for Apple to diversify its China factories according to a research director while a Constellation Research analyst is bullish on Apple's stock.
Chip manufacturing is the most automated and less labour demanding part of making an iPhone. Machines are responsible for nearly every step of the process. Humans cannot be manually involved in producing chips, only setting up die plates, pushing buttons, monitoring the process, quality control and packing. Not human free, but a chip plant looks very sparse compared to virtually every other step.
On the other end, final assembly is the most labour demanding and would be cost prohibitive to accomplish in the US.
It's unlikely that Apple could afford to bring assembly to North America. If Apple could pull it off, it'd be because they'd invented an incredibly complex assembly robot that could replace dozens of people and be manned by just a few.
Still, beyond labour, the supplier geography that only exists in the East is important in cost efficiency, because having the suppliers of nearly 200 components, each themselves with dozens of suppliers, all within the same geographic area is just not possible in the US with its strict labour laws, regulations and tax structure.
There's a difference between "aren't willing to" and financially unable to.
The iPhone 14 Pro (starting at $999) and 14 Pro Max (starting at $1099) that are in such high demand right now would probably have starting prices of at least $1500 and $1700, respectively, due to the higher labor and supply chain costs that will be incurred if they're manufactured/assembled the US. I'm basing my price estimates on this U.S. made smartphone that starts at $1999 that's using 5+ year old hardware and then factoring in some of Tim Apple's ability to cut costs and increase some production efficiencies. But that can only go so far when the U.S. doesn't have the supply chain that China has. Remember the tiny screw that threw a wrench in Apple's plans to build the Mac Pro?
NYT: The 2013 Mac Pro launch was partly delayed by the lack of US screw suppliers - 9to5Mac
The New York Times features a fun story today, shining some light on why big companies struggle to build products...
9to5mac.com
A Tiny Screw Shows Why iPhones Won’t Be ‘Assembled in U.S.A.’ (Published 2019)
Apple decided several years ago to produce a high-end Mac in Texas. The problems that surfaced illustrate the challenges of domestic manufacturing.
Thanks for adding the financially able to purchase part. That’s a very valid addition.There's a difference between "aren't willing to" and financially unable to.
The iPhone 14 Pro (starting at $999) and 14 Pro Max (starting at $1099) that are in such high demand right now would probably have starting prices of $1500 and $1700, respectively, due to the higher labor and supply chain costs that will be incurred if they're manufactured/assembled the US. I'm basing my price estimates on this U.S. made smartphone that starts at $1999 that's using 5+ year old hardware and then factoring in some of Tim Apple's ability to cut costs and increase some production efficiencies. But that can only go so far when the U.S. doesn't have the supply chain that China has. Remember the tiny screw that threw a wrench in Apple's plans to build the Mac Pro?
NYT: The 2013 Mac Pro launch was partly delayed by the lack of US screw suppliers - 9to5Mac
The New York Times features a fun story today, shining some light on why big companies struggle to build products...
A Tiny Screw Shows Why iPhones Won’t Be ‘Assembled in U.S.A.’ (Published 2019)
Apple decided several years ago to produce a high-end Mac in Texas. The problems that surfaced illustrate the challenges of domestic manufacturing.www.nytimes.com
Off Topic: I attended the Fall Symposium for Northern Water (Colorado) today. It is a very scary situation. Will be interesting to see how the Federal Government resolves the issue. Between the Upper and Lower Colorado Basin, per the Compact, the Upper get 7.5 million acre-feet and so does the Lower. However last year the Upper Basin used 3.5 million acre-feet and the Lower used 9.5 million acre-feet. Considering that only 5 million acre-feet get into the Powell/Mead lake system, draconian water conservation measures may be required in So CA et al. very soon.Las Vegas, Nevada with their water shortage, cuts to water supply going down there, and conservation efforts? Not a chance.
Lake Mead Water Shortage
In January 2022, Southern Nevada’s water allocation was reduced by 7 billion gallons, enough water to serve 45,000 homes.www.lasvegasnevada.gov
Southern Nevada has 8 years of water reserves as state faces water cuts from Colorado River
Gloom and doom is what we’re all used to hearing when it comes to our ongoing drought. You typically don’t hear leaders talking about having extra water.www.fox5vegas.com
Quite scary to be honest.
Cheaper iPhone cost for Apple, not for you and me.
And the SoC is just one component. The rest are still mainly come from Asia, and probably will be assembled elsewhere. There’s no news of Foxconn in the US, so the chips will probably be shipped to China for assembly.
That's smart, building a chip plant that requires a ton of fresh water to operate into a state that is lacking in fresh water.
Better to build in Central Washington State where the Columbia River can supply the water for the Fab. Nevada is hosed for water.
No doubt they have looked at that, tariffs, taxes and other costs before dumping all that money into the plants. TSMC will not lose money on the change. Maybe more automation in the plants in the US with their brand-new lines.
I feel like we should have had U.S. chip production ages ago, but thankfully a step in the right direction. Hoping to see an all U.S. made Macintosh product in the future!
This will substantially grow enterprise sales in regulated markets like Federal and State Governments, where TAA compliance was mandatory.
I seriously doubt the market pressure would be strong enough for this kind of stuff. What’s more likely to happen is everyone else raises the price just like apple did and we customers will be forced To suck up the price increase, on top of cost of living hike and mortgage hike.
Free market is just a pipe dream for the most part, especially since the pressure of unlimited growth from Wall Street will never allow profit margin go even $1 less than before, otherwise all shareholders gonna panic and riot.
Patriots will, and with enough patriots buying Made in USA at whatever price, eventually everyone else will follow, however unwillingly they might be.
Automated =/= price reduction. Machine maintenance cost is still there, and those employees would get paid very well for servicing those ultra expensive machines. Yes, capitalist will always find a way to get more for less, but…… ahem, maybe they can bend the reality to their will after all.
Remember when they were going to run a sapphire glass factory in Arizona?
We had. Remember commodore days, they had their own chip fab called MOS Technology that produced variations of 6502 processors. Who knows what happened after that. Even AST wanted to use made in USA sound cards in their PC but price was just too high to be competitive. Then the rest is history.
Can’t believe USA voluntarily gave up on made in USA to chase higher profit. Oh wait, capitalism. Ahh That makes sense now. Blame Wall Street on the destruction of made in USA.
Which makes location choice even more sensible than ever. Tho that also makes Arizona a high priority target for enemy states to attack. Idk, a couple EMP rounds to completely disable all plants for months?
TheYayAreaLiving 🎗️
Suspended
OMG! It was a hot mess. Whatever happened to the building? It's probably abandoned now.
Apple's Failed Sapphire Glass Supplier GT Advanced Charged With Misleading Investors
The SEC today announced it has charged GT Advanced Technologies and its former CEO Thomas Gutierrez with misleading investors about the company's...
www.macrumors.com
Please let them know they forgot to consider that.