Some Apple Silicon Chips Will Soon Be Produced and Packaged in U.S.

[MacRumors]

As part of its efforts to expand its U.S. manufacturing, Apple today announced that Amkor will package some Apple silicon chips at its new facility being built in Peoria, Arizona. The chips will be produced at a nearby TSMC factory, and then Amkor will handle packaging, a final step that protects the chip from physical damage.

Amkor will invest approximately $2 billion in the facility, which will employ more than 2,000 people once it is completed, according to the announcement.

"Apple is deeply committed to the future of American manufacturing, and we'll continue to expand our investment here in the United States," said Apple's operating chief Jeff Williams, in a press release today. "Apple silicon has unlocked new levels of performance for our users, enabling them to do things they could never do before, and we are thrilled that Apple silicon will soon be produced and packaged in Arizona."

In its own press release today, Amkor announced that it plans to begin limited production at the facility within the next two to three years. The company said it applied for CHIPS funding from the U.S. federal government to help fund the project.

Apple says Amkor has packaged chips used in all of its products for more than a decade. Apple silicon chips are found in iPhones, iPads, Macs, and other devices, but it's unclear exactly which chips will be packaged at the new facility in Arizona.

Article Link: Some Apple Silicon Chips Will Soon Be Produced and Packaged in U.S.

 

[Wizard_of_Woz]

They can do more than this, but it is a step in the right direction. When it is all said and done, I applaud Apple for brining any manufacturing back to the USA.

 

[Obioban]

Excellent step in the right direction.

 

[jz0309]

next logical step for those packaged chips would be to be assembled in a product in the US and not being sent to Asia

 

[usmaak]

next logical step for those packaged chips would be to be assembled in a product in the US and not being sent to Asia

Yeah. Manufacturing them here and then shipping them elsewhere would just be a feel-good PR move.

 

[toobravetosave]

next logical step for those packaged chips would be to be assembled in a product in the US and not being sent to Asia

unless you're a shareholder with little connection to reality besides your bank account then this is a terrible idea!

 

[hajime]

Does that mean prices will go up?

 

[fenderbass146]

Fantastic, really need to diversify chip production away from Taiwan. God forbid China gets too aggressive.

 

[fenderbass146]

unless you're a shareholder with little connection to reality besides your bank account then this is a terrible idea!

not on a geopolitical scale it's not...and that very well could effect everybody. 80%+ of advanced microchips are made in Taiwan which is concerning.

 

[shindailoversDF]

unless you're a shareholder with little connection to reality besides your bank account then this is a terrible idea!

I’ve got more of a connection to the child slave labor being used to assemble them.

 

[Schmitti81]

@MacRumors Please check what nano meter chips they build. Like this that a 5nm fab for making M1 chips?
Or a 3nm for the latest M3 chips?

Or do they just package a few chips for Mac Pros in the US?

 

[Obioban]

next logical step for those packaged chips would be to be assembled in a product in the US and not being sent to Asia

Realistically, Mexico. US labor is way too pricey for product assembly. They're not even jobs we should want in this country (unlike the higher skill, higher pay chip production, which we should want).

But, within NAFTA is the way to have secured supply lines into the future.

Plus, cheaper:

 

[jav6454]

In Arizona...? Where water is already scarce? Anyways, likely this will be last generation chips.

 

[txscott]

Prices were always going up anyway.

As a shareholder with an eye to the bottom line, both for AAPL and me, I applaud AAPL's stepwise movements toward more manufacturing in the US. Most manufacturing will not take place in the US, ever, the economics don't work. But moving manufacturing out of China (I would be happy if it all moved out) and diversifying it across India, Vietnam, Mexico and the US makes sense.

 

[jlc1978]

next logical step for those packaged chips would be to be assembled in a product in the US and not being sent to Asia

unless you're a shareholder with little connection to reality besides your bank account then this is a terrible idea!

Shipping costs are likely a small fraction of the cost of the chip, and I suspect shipping US-Asia is likely to allow shippers to fill otherwise empty a/c and vessels and thus give good rates to get the revenue which helps cover their costs.

I think it's a long play designed to reduce geopolitical risk to chips as part of Apple's supply chain diversification; as well as eventual US manufacturing. As phone components become more integrated less labor is needed to assemble and devices can be designed for robotic assembly. This means you can make them in high labor cost areas because you need a small amount of highly skilled labor that is likely not cheap anywhere in the world where you can get it.

I can see a future where an iPhone is just screen, battery, case and an all in one SOC on a MoBo with antennas and connectors for screen and battery. The SOC does everything except function as an antenna, and who knows it may be able to design that in as well at some point.

Realistically, Mexico. US labor is way too pricey for product assembly. They're not even jobs we should want in this country (unlike the higher skill, higher pay chip production, which we should want).

Today, but as manufacturing becomes more automated labor costs become less important.

Most manufacturing will not take place in the US, ever, the economics don't work.

It really depends on how much you can automate. A number of labor intensive industries are moving to automation to replace expensive labor and stay competitive with cheap labor areas.

 

[toobravetosave]

I’ve got more of a connection to the child slave labor being used to assemble them.

Don’t worry they will find new and different children in India and Vietnam

 

[GeoStructural]

In Arizona...? Where water is already scarce? Anyways, likely this will be last generation chips.

It is due to business-friendly practices and not environmental factors. Arizona is hugely promoting the construction of cloud data warehouses, for example. They have the space and tax policies in place for it.

 

[mattster16]

It is due to business-friendly practices and not environmental factors. Arizona is hugely promoting the construction of cloud data warehouses, for example. They have the space and tax policies in place for it.

Land is very cheap also.

 

[mattster16]

I suspect the CHIPS Act is a big factor in this.

 

[NetMage]

In Arizona...? Where water is already scarce? Anyways, likely this will be last generation chips.

1. This article is about packaging the chips, not manufacturing them.
2. It turns out humidity is more important than water supply and modern chip making (can) heavily recycles water used, so Arizona is a great place to make chips.

 

[sbrhwkp3]

Glad companies are seeing the value in the diversification of their supply chains. The US isn't the most industry friendly place to work with in terms of red tape, but the predictability and stability of the US as a country has made manufacturing things here undervalued by corporations for years. That stability may eat into margins in the short term, but can protect you from adverse unrest that could harm margins in the long run.

 

[springsup]

Does that mean prices will go up?

Maybe. It’s hard to say because there are also a lot of subsidies and tax breaks incentivising this kind of thing.

That said, the article mentions chips will be produced at TSMC’s Arizona plant.

In December 2022, TSMC announced the opening of the company's second chip plant in Arizona, raising its investments in the state from $12 billion to $40 billion. At that time, company officials said that construction costs in the U.S. were four to five times those in Taiwan (due to alleged higher costs of labor, red tape, and training) and that they were having difficulty finding qualified personnel (so some US hires were sent for training in Taiwan for 12–18 months), so it will cost at least 50% more to make a TSMC chip in the United States than in Taiwan.

CHIPS and Science Act - Wikipedia

en.wikipedia.org

It’ll take time for those structural problems to be resolved, but they’re never going to be resolved unless you build the plants and start working on them.

 

[cocky jeremy]

I don't care where they're manufactured, packaged, etc. Just get the best people for the job to do it.

 

[boak]

These will be low-volume chips where the extra costs can easily be passed on to consumers/absorbed by Apple, e.g. older gen chips where the R&D costs are already amortised, or Ultra chips where the profit margins are high.

The purpose is not to shift mass production back to the US but to develop a skills and technology base such that production can be quickly scaled up if anything were to disrupt the current supply chains.

 

[sugondese]

>The chips will be produced at a nearby TSMC factory, and then Amkor will handle packaging, a final step that protects the chip from physical damage.

I wouldn't dare to reduce IC packaging to "protecting the chip from physical damage". Makes it sound like they're piling chips into a shipping box in a multi-billion dollar facility.