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Apple's Bid to Use Chinese Chipmaker as Leverage Backfires
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I met Gill Scott-Heron 30 years ago when I was in college. He was a great guy, and so ahead of his time. I would love to see what he would say now.
Bringing hi-tech, or any, manufacturing back to the US isn’t actually a bad thing—but the cost of oil needs to go higher for the companies to be willing to pay workers here. Further, we will need to understand that manufacturing in the US will never be the boon it was in the 1940s and 50s—automation will take care of that. Once it’s too expensive to ship stuff around the world, manufacturing will return, but the jobs won’t.
tridley68
macrumors 68000
That's what you get Apple for relying on Chinese goods they screw you over every time build in the united states.
In 2020 it was CPUs, in 2023 in was GPUs, now its DRAM, they could never keep up. And to think all you need to do it just "build it and they will come" is a crazy over-simplification. It would take more than decade for Apple to create a competitive product to what Samsung or SK Hynix has perfected over the last 20 years. Not to mention the talent Korea has vs what you would find in the US specifically around chip manufacturing. This would also apply to GPUs and CPUs. Trying to catch up the 2nm fabs that TSMC currently produces would be not be an uphill battle, it would be vertical.
Most of that factory work will be automated once that manufacturing returns (and it will, because we will eventually run out of oil), so we really don’t need to ask who will work in them, just who will build it (and how much that would cost).
It’s always refreshing to see a contextual response instead of “regime bad man” to blame for every little thing.
It is a systemic issue and the outsourcing to other places has gone on for far too long. Independence is truly priceless.
Minerals don't need to be imported. The thing is that the west doesn't want to dig (mine), doesn't want the dirty fuming factories to purify those minerals, in short, the west does not want that kind of industry on their soil. That's why China took everything they threw at her and now is holding the whole world by the ba**s.
Apple will invest in its own fab with dedicated capability if it concludes that the fab market players are colluding.
Two reasons why this wouldn’t work.
Cost likely would not be lower because Apple still has to procure all the equipment which there is a shortage of. And Apple doesn’t have the expertise.
Time would take 5 years, so doesn’t really help. And if dram prices collapse Apple would be stuck with a high cost basis.
picpicmac
macrumors 68000
Sigh, MR doing more clickbait.
The Korean manufacturers were already raising their prices. Apple shopping elsewhere did not cause those Korean companies to raise their prices, and the Chinese company not giving Apple priority in line over the Chinese companies who wanted the chips does nothing to the global RAM shortage.
It would be interesting to see Apple spin off hardware, but the iPhone accounts for 50% of their revenue—it won’t happen (not while it’s that large, at least).
Plus, even if services were bigger, your analogy is off. The Dreamcast, despite it being a console that so many love, was an unmitigated disaster for Sega, and it was the entire product line for the company (outside of their arcade business). When that ended in 2001 and Sega become a third party publisher, they laid-off large amounts of their workforce, and that still didn’t stabilize the company. It wasn’t until they merged with Sammy that Sega finally became financially stable again (as a subsidiary of a holding company; today’s Sega isn’t the same company). Early 2000s Sega was a financial mess that simply couldn’t afford to continue in the hardware business. 2026 Apple isn’t.
jarman92
macrumors 68020
It’s what they are doing, but it takes many, many years to build and spin up a fab, plus the requisite support infrastructure.
Even Elon Musk knows he's going to have to build his own fab to keep up with supply he needs, why would Apple be any different?
jarman92
macrumors 68020
thejadedmonkey
macrumors G3
Even beyond that, we just can't do it (anymore?). A giant petroleum factory opened near me. It promised a few crappy jobs and lots of smog. It was 100% over budget and they're trying to sell it because it's so unreliable. Even once you get past the red tape, we don't even have the talent to keep it operational.
jarman92
macrumors 68020
At the time, he was quoted as simply saying "those jobs aren't coming back."
He elaborated more in his biography. I found one article that gives more background: https://www.pulitzer.org/winners/staff-74
There's no direct link, but it's the top link on that page with a title about iPhone jobs.
Basically it boils down to the general erosion of the middle class in America, with people either over or under educated for these types of jobs.
And the supply chain, in that China has built literal megacities around manufacturing in a way that seems implausible if not impossible in America.
And the fact that the Chinese government did make those investments at the time, and it has paid off insurmountably. The US government doesn't seem able to make effective investments.
Labor is apparently not as big a part of it as it seems, though China has the advantage there too in sheer manpower willing/able to be forced into doing the kind of work Americans just won't do (12 hour days living in dormitories.)
The US government could have spent the last 20 years making wise investments in education and manufacturing like the Chinese did, but they didn't. As terrible as some of those jobs sound, there are still plenty of people in America who would take them because the job market here has gotten awful, due to many of these very trends.
You're right that it takes several years but you're wrong about the minerals. We have more than enough minerals. In fact, we have some of the largest mineral deposits in the world. The truth is most of the critical minerals needed (gallium, germanium, and indium) are obtained as the result of recovering them from other mining activities and we just don't bother with that recovery today.
Exactly. Before it was electronics it was already other industries. Manufacturing has been moving to China for 40+ years. This is just the latest example.
cjsuk
macrumors 68020
There is actually no RAM shortage. Some bastards stole it all out the supply chain.
IIGS User
macrumors 68000
Apple does make a lot of money off services. But those revenues are tied to the device. People with Android phones aren't paying for Applecare, iCloud, etc. They're typically using Google's services in this respect.
Apple needs to remain in the manufacturing business. iPhones, iPads, and Macs generate a lot of revenue. But that is kind of the side point.
One of the reason Apple's business model is so successful is that they control the operating system, the hardware, AND the processor design. They leverage this to optimize the end to end user experience. It's a digital form of vertical integration and it's obviously successful beyond belief.
The whole "memory shortage" will turn into a glut soon enough. Moves in cycles. Always has since the 80's and the 90's
(in New England/Boston accent)
We are here to help the Android people. Because in every droid user this an Apple user trying to get out. It's a hardball world, son. We've got to keep our heads until this memory craze blows over.
Yeah weren't they looking to use Chinese memory in order to make devices that are for the Chinese market, freeing up their other memory supply for their other markets?
Is the article just inventing this characterisation out of thin air?
Apple’s cash on hand at the end of June 2026 was 62 billion dollars. Apple’s net worth at the end of June was 5 trillion dollars. The credit and bond markets are DYING to lend money to Apple. Apple can more than afford to build a memory fab. And I bet Trump would more than love to take a 10% equity stake to help bolster the deal like he did with Intel.
Apple is bringing everything silicon under their roof. They’re even kicking out Qualcomm by the end of 2027. It’s time for Apple to put up or shut up about bringing manufacturing home to America. Build the fab now, Tim Apple. Or should I say….John Apple.