Apple's New U.S. Chip Factory to Produce AI Servers With High-End M5 Chips

[MacRumors]

Apple's chip factory planned for Houston, Texas will manufacture AI servers that are equipped with high-end M5 chips, Apple analyst Ming-Chi Kuo said today.

Apple is working with Foxconn to open a 250,000 square foot server manufacturing facility in Houston in 2026, with the hardware produced at the location set to be used for AI. While Apple did not provide any insight into the servers that it will be making, Kuo says that the servers will be equipped with TSMC's high-end M5 chips, which are set to enter mass production as soon as the second half of 2025.

Foxconn already has a facility in Houston, and it bought additional land for new projects last year. Servers will be produced at existing facilities starting in the second half of 2025, with assembly expanding to the new facility when it launches in 2026.

Back in December, Kuo said that Apple would accelerate its Private Cloud Compute infrastructure for Apple Intelligence when the mass production of M5 Pro, M5 Max, and M5 Ultra chips started. Kuo expects the M5 Pro and M5 Max to enter mass production this year, with M5 Ultra chips to be mass produced starting in 2026.

Article Link: Apple's New U.S. Chip Factory to Produce AI Servers With High-End M5 Chips

 

[jz0309]

This is NOT a “chip factory”, it will be used like for some assembly. A “chip factory” would be something like a foundry (eg TSMC), using that term is very misleading.

 

[cr2]

My ex-big boss would get it to use with the big apple monitor -- for powerpoint viewing and sending very very important e-mails. A big apple fan boy but zero technical skills. Well, if I did not have to pay then maybe I would have gotten some nice toys too.

 

[kaycrystal626]

Apple's New U.S. Chip Factory? You make it sound like Apple owns Foxconn!​

 

[Take Flight]

Correct, need to change Chip to Assembly or Manufacturing in title

 

[rgeneral]

What happened the last time Foxconn plan for a factory in US. Was it in Wisconsin?

 

[name99]

"TSMC's high-end M5 chips, which are set to enter mass production as soon as the second half of 2025."

So should we assume that M4 Studio and Pro (and Ultra and Extreme) will
- yet again be skipped BUT
- will appear in M5 form very soon after M5 is announced (at the announcement?)

 

[dontwalkhand]

How about servers we can deploy on prem again, like the XServe?

 

[thefrost]

Is Apple Intelligence building it? /s

 

[BuffaloTF]

What happened the last time Foxconn plan for a factory in US. Was it in Wisconsin?

They built it 1/20th the proposed size, left it totally empty, put it up for sale 5 years later, were exempted from tariffs, and collected their tax incentive. 4 years to build this out… sure sounds like an echo bouncing off the wall. 😉

 

[thejadedmonkey]

This is NOT a “chip factory”, it will be used like for some assembly. A “chip factory” would be something like a foundry (eg TSMC), using that term is very misleading.

It's still impressive, considering how impossible it is to make anything in America anymore.

Hopefully this means we (the USA) at least have the capabilities of producing screws again.

 

[TigerNike23]

Of course it’s gotta be the high-end models. A Mac Mini “Made in America” cannot be sold for anything less than probably $1,000 base.

 

[name99]

How about servers we can deploy on prem again, like the XServe?

That's not an answer. You need to explain how such a product would differ from the mac mini or mac studio, both of which can be (and are) being used in such a role.

 

[sw1tcher]

Apple's chip factory planned for Houston, Texas will manufacture...

This is NOT a “chip factory”, it will be used like for some assembly. A “chip factory” would be something like a foundry (eg TSMC), using that term is very misleading.

Who knows, maybe this factory will make Apple chips similar to these 🤷‍♂️

 

[PsykX]

I'm mitigated with these announcements.
It's fine to create jobs in America, but America isn't especially good in manufacturing.
Since production and assembling went in Asian countries, they became better than the rest of the world.

 

[deconstruct60]

Back in December, Kuo said that Apple would accelerate its Private Cloud Compute infrastructure for Apple Intelligence when the mass production of M5 Pro, M5 Max, and M5 Ultra chips started. Kuo expects the M5 Pro and M5 Max to enter mass production this year, with M5 Ultra chips to be mass produced starting in 2026.

This part seems to be a stretch. Private Cloud Compute is where ship 'bigger' jobs that can't be done locally. M5 Pro is substantially bigger how than a M2-M4 Pro/Max ? Incrementally, perhaps. So mainly iPhone workload kicked up to PCC ?

An Ultra seems more likely closer to a 'server chip' ( mutiple person workloads aggregated onto a single node) than 'Pro'. If M5 Ultra not coming in 2026 what is factory churning out in 2025?

 

[norbinhouston]

Good news for Houston. Houston was once home to the largest PC company in the world. Compaq. They actually assembled computers there, not chips but mobos, etc. Quite amazing. Still a lot of left over engineers that hung around after HP bought them out and closed the plant.

 

[deconstruct60]

How about servers we can deploy on prem again, like the XServe?

Mac Pro rack .... 2019 and 2023 .

Pretty much Apple's answer. Likely still will be. More affordable?

xMac Studio - SONNETTECH

3U enclosure to install and secure one Mac Studio with optional PCIe card expansion in a standard 19-inch rack.

www.sonnettech.com

with a Max variant in it. Or the Mini variant.

Those probably are not what Apple would likely want to use for a scale out Private Cloud Compute nodes though. Many of the hyperscaler datacenters don't come with off-the-shelf systems. Google, Facebook, Microsoft, etc compose their own server systems that are customized to the power/HVAC/etc of their data center designs.

Decent chance Apple is only having stuff made at the new location for their own internal consumption. They'll just distribute out to their datacenters ( maybe worldwide so can get some "export" bonus points here also with the administration. )

However, if is just M5 Pro powered nodes then decent chance it is just Mac Mini Pros.

 

[deconstruct60]

Apple is working with Foxconn to open a 250,000 square foot server manufacturing facility in Houston in 2026, with the hardware produced at the location set to be used for AI.

This is about the same size at the Mac Pro factory that Apple contractor for back in 2019

" ...
The all-new Mac Pro was unveiled at Apple’s annual Worldwide Developer Conference in June. Mac Pro units are now in production in Austin and will soon ship to customers across the Americas. The 244,000-square-foot Mac Pro facility employs more than 500 people in a range of roles, including electrical engineers and electronics assemblers, who build each unique unit to customers’ specifications. ..."

Apple expands in Austin

Apple today announced the start of construction on its new campus in Austin, Texas, as part of its broad expansion in the city.

www.apple.com

This is unlikely a high volume assembly location. Only a subset of 2019 Mac Pro was assembled at this facility.

Mac Pro 2023 were largely made in Thailand.

New Mac Pro Has 'Product of Thailand' Label, Final Assembly Still in USA

Apple's new Mac Pro has a "Product of Thailand" label, but final assembly of the desktop computer still takes place in the U.S.,...

www.macrumors.com

So it really didn't change in 2023.

If the Mac Pro location shuts down as this one opens then it is likely little net change in jobs at all.



Pretty easily this could just be a place to assemble/make internal only consumption server models. Very large scale datacenter operators 'build' their own systems to deploy to their own facilities.

 

[diddl14]

Cool, a Genmoji Farm! 🙋‍♂️

 

[roncron]

They built it 1/20th the proposed size, left it totally empty, put it up for sale 5 years later, were exempted from tariffs, and collected their tax incentive. 4 years to build this out… sure sounds like an echo bouncing off the wall. 😉

I'm an econ/finance professor in SE wisconsin. BuffaloTF's description is accurate.

In addition, several nearby local city governments gave foxconn millions in subsidies, betting that the 13,000 promised new jobs would be great for the local economy. The money foxconn received from these subsidies and incentives is about double the amount foxconn actually spent in the initial stages of developing its facility before canceling the project. The local governments of course didn't get any refund from foxconn for reneging on its promises. One town incurred substantial debt to pay for the infrastructure development around the foxconn plant, and now has little to show for it.

Apple is more reputable, let's hope the project Apple announced actually happens.

One side note. It's likely Apple is doing this in hopes of avoiding being the target of import tariffs. Before the threat of tariffs, Apple chose to produce overseas because costs are higher in the U.S. Either way, this will mean lower profits for Apple shareholders, higher prices for U.S. customers of Apple products, lower wages for the workers that produce Apple products, or some combination of all three.

 

[9081094]

How about servers we can deploy on prem again, like the XServe?

That market is lost years ago when Apple abruptly abandoned it. You trust Apple for delivering servers your company relies on? People got burned before.

 

[9081094]

Is Apple Intelligence building it? /s

Well the purpose is to build servers for Apple Intelligence and they’ll start the second half of this year. They should have started it before they introduced Apple Intelligence and maybe they’d gotten some intelligence on time.

 

[thefrost]

Well the purpose is to build servers for Apple Intelligence and they’ll start the second half of this year. They should have started it before they introduced Apple Intelligence and maybe they’d gotten some intelligence on time.

You would hope so.

 

[BB1970]

That’s a lot of money for spiffing up text and Memojis