Chip war: Apple strikes major US-made semiconductor deal

Apple has announced a multi-billion dollar deal with chipmaker Broadcom, aiming to increase the usage of U.S.-made components. This long-term agreement between the two American companies will focus on developing components for 5G devices, specifically designed and manufactured within the United States.

The deal aligns with Apple’s previously announced plan in 2021 to invest $430 billion in the U.S. economy. It comes at a time when trade tensions, particularly in the technology sector, are escalating between Washington and Beijing. The United States has taken various measures against China’s chip manufacturing industry while investing significant funds to bolster its domestic semiconductor sector.

Tech giants in the U.S. have faced growing scrutiny from lawmakers across the political spectrum regarding their reliance on Chinese manufacturers and components.

To address this, Apple has been gradually diversifying its supply chains, expanding manufacturing to countries like India and Vietnam. Last year, the company revealed its intention to purchase semiconductors from a factory being constructed in Arizona by Taiwanese chipmaking giant TSMC.

Additionally, Apple plans to produce the iPhone 14 in India, marking a significant step in its strategy to expand manufacturing beyond China. The recent deal with Broadcom further expands Apple’s relationship with the chipmaker, with the components for Apple devices now being designed and built in various U.S. locations, including Colorado.

“We’re thrilled to make commitments that harness the ingenuity, creativity, and innovative spirit of American manufacturing,” Apple’s chief executive Tim Cook said in a statement.

In recent months, there has been a notable increase in tensions between the United States and China.

This week, China made a significant move against a U.S. chip maker by declaring products manufactured by Micron Technology, a prominent American memory chip giant, as a national security risk. This action marks Beijing’s first major step against a U.S. chip manufacturer.

China’s cyberspace regulator announced on Sunday that the largest producer of memory chips in the United States poses “serious network security risks.”