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Apple CEO Tim Cook has made it clear that the company will source at least some of its chips from TSMC's still-unfinished Arizona plant.
Cook made the announcement at an “internal meeting” in Germany with Apple employees, from engineers to retailers. In addition, orders for chips may spread to factories in Europe.
“We have already made the decision to buy out the Arizona plant, and this Arizona plant will start up on the 24th, so we have about two years ahead of us, maybe a little less.” Cook announced this at a meeting, reports Bloomberg. “I am sure that in Europe we will also be purchasing from Europe as these plans become more apparent.”
The meeting was also attended by Apple Services CEO Eddie Cue and Human Resources Manager Deidra O'Brien.
Construction began on TSMC's chip manufacturing plant in Arizona in June 2021. The company originally planned to start production in September 2022, but the timeline was pushed back by about six months.
TSMC's plant is expected to be operational in March 2023. TSMC expects production to begin in early 2024.
The Republic of Arizona also creates problems. for TSMC. Intel already employs 12,000 people and is looking for 3,000 more for its expanded capacity. TSMC will have to compete in a region with low unemployment in finding talent for its new plant.
However, TSMC is skeptical about the level of success that can be achieved in the United States. When U.S. House Speaker Nancy Pelosi visited Taiwan in August, she met with Morris Chang and Mark Liu, chairman of TSMC. Chang reportedly told Pelosi that Washington's efforts to restore chip manufacturing were doomed to failure.
It is not clear what exactly Apple will buy from TSMC and what exactly will be produced there. Apple still has demand for its A-series chips, first released four years ago.
In addition, chips purchased from TSMC Arizona will still have to be sent to China or India for iPhone production if the status quo continues.
Warren Buffett believes in TSMC. Berkshire Hathaway increased its stake in TSMC over the summer. The purchase was disclosed in the SEC filing but did not include a purchase date outside of the time frame between July and September.
In July, TSMC shares fell 35% in a year. On September 30, it fell by 41%. On November 3, it hit a 2022 low, down 49% year-over-year.
