Apple CEO Cook Says Tech Giant Will Start Sourcing Chips From Arizona in 2024

Seeking Alpha2022-11-16

Apple CEO Tim Cook said on Tuesday that the tech giant would source some of its chips from Arizona as the company looks to diversify its supply chain, according to Bloomberg.

The news outlet, citing an internal meeting that Cook had in Germany with local engineering and retail employees, added that the Apple chieftain said the tech giant would be buying from a plant in Arizona that starts in 2024 and may also look to buy in Europe.

"We’ve already made a decision to be buying out of a plant in Arizona, and this plant in Arizona starts up in ’24, so we’ve got about two years ahead of us on that one, maybe a little less,” Cook told the employees. "And in Europe, I’m sure that we will also source from Europe as those plans become more apparent."

Also attending the meeting were Apple's (AAPL) services head Eddy Cue and Deirdre O'Brien, its head of retail and human resources, Bloomberg added.

Taiwan Semiconductor is currently building a plant in the Grand Canyon State that is scheduled to be completed in 2024.

Earlier this month, it was reported that Taiwan Semiconductor (TSM) was planning a multi-billion dollar expansion to its Arizona factory.

Intel is also in the process of expanding its plant in Ocotillo, Arizona and recently disclosed that it had partnered with Brookfield Infrastructure Partners (BIP) (BAM) in a deal worth up to $30B to help pay for its expansion plans.

During the meeting, Cook said that 60% of the world's processors come from Taiwan, but added that "regardless of what you may feel and think, 60% coming out of anywhere is probably not a strategic position."

Cook also said that he believes there will be a "significant investment in capability and capacity in both the United States and Europe to try to reorient the market share of where silicon is produced.”

The U.S. government recently passed the CHIPS and Science Act aimed to spur domestic production and manufacturing of semiconductors.

Europe also recently passed its own version of the CHIPS Act.

Apple (AAPL) shares gained 1.2% to finish at $150.04.

Last week, Apple (AAPL) said that it will invest $450M to power the new Emergency SOS system available on the iPhone 14.

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Comments

  • Gerinit
    2022-11-16
    Gerinit
    Pls like. Thanks
  • 慢的老人
    2022-11-16
    慢的老人
    $Apple(AAPL)$ good strategic move to diversify their supply chain network. This has nothing to do with politics or America First, but everything to do with mitigating risk as seen in the last 2 years of chip shortages. 
  • chaicka
    2022-11-16
    chaicka
    Sourcing chips from US plants will result in higher costs. Same reason why major chip makers been eagerly expanding in Asia, esp Singapore 🇸🇬. Will higher costs be pass on to consumers? How does it affects AAPL margins? 🤔
    • chaicka: 
      [Tongue]
    • Twhyger: 
      Consumers can always afford it... [Sly]
    • jllwang: 
      Manufacturing costs mitigated by lower logistics costs. Other advantages - diversify supply chain risks and ease political pressure.
  • Bull1973
    2022-11-16
    Bull1973
    Ok
  • MLFL
    2022-11-16
    MLFL
    👋 
  • estherytwu
    2022-11-16
    estherytwu
    Ok
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