Apple’s Zipped Lips on Chips

U.S. and European officials are constantly talking about making the world’s most advanced computer chips anywhere other than Taiwan, which they consider sensitive to Chinese aggression or influence. They are on a mission to make more chips in the US and Europe and want to spend taxpayer dollars to do so.

Apple doesn’t seem so concerned. For years to come, Apple plans to roll out assembly lines to rely on chips made mostly in Taiwan.

Apple has a track record of turning global technology manufacturing to its liking and the company has lobbied for more computer chips in the US. But Apple and other big buyers of chips do not seem to have preferred it and are not seriously using their influence on suppliers to speed up the construction of chip factories in the US, Japan or Europe.

Brett Simpson, a computer chip expert and partner at investment firm Arett Research, said: “The industry is not growing this as something they need to take immediate action on.”

The apparent disconnect between Western governments and the biggest buyers of chips like Apple raises a question for both companies and policymakers: who is right about the urgency of the economic and geopolitical risks of centralizing chip-making in Taiwan – which people need a vote. Or companies that vote with their wallets?

Government officials may overestimate the risks of focusing on making chips in Taiwan, or chip buyers like Apple may underestimate them. Or maybe these companies find it very difficult to get away from the expertise of Taiwanese chip factories more quickly. Whatever the reason, it seems that elected leaders and the companies that need the most chips are working in a different sense of what is possible and necessary for the future of this essential industry.

Let me explain why big business and big governments want to keep computer chips flowing but not move forward in public action on how and how quickly to achieve it.

Many important products, including smartphones, medical devices and fighter jets – require computer chips to act as their brains or memory. Some of us have become curious about these small components because the production of computer chips does not meet the demand of people who wanted to buy cars, computers and other goods during the epidemic.

Taiwan has focused on semiconductor manufacturing company or TSMC due to shortage of some products and growing tensions between the US and China. It makes most of the world’s most sophisticated computer chips, including Apple products, almost entirely in Taiwanese factories.

TSMC is expanding to other locations, including Arizona, but new factories are taking years to start and operate. It is in everyone’s interest for factories to keep churning out computer chips without interruption, as the global economy would otherwise swell. The Biden administration and many tech experts also say it is strategically important to meet China’s ambitions in chip-making and other essential technological fields and to retain US knowledge in chip-making.

Changing the world’s dependence on chips made in Taiwan will not be easy, and industry officials have told me that Apple is working behind the scenes to support legislation to produce more chips in the United States.

Some large chip buyers have also said they are helping TSMC pay for its chip factories outside of Taiwan and will buy chips manufactured there. The question is whether all this can go faster if influential customers put more muscle into it.

Simpson told me that if Apple and other big customers like Qualcomm and Nvidia wanted to expand manufacturing away from Taiwan more quickly, they could push TSMC to do what TSMC is doing, as TSMC is doing. They may also commit to buying more chips from other manufacturers, such as Samsung and Intel, with factories outside Taiwan. Instead, Apple and others are largely doubling down on agreements with TSMC.

While Washington and Silicon Valley do not seem to share the same sense of urgency, it is difficult for all of us to know whether the collective effort to create a new world order in computer chips is worthwhile.

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