Apple pushes TSMC's massive Arizona fab for US chips amid China tensions—billions invested, but tariffs threaten costs. Game-changer or bust? Some 30 minutes north of Phoenix, more than 30 cranes tower over a construction site 2½ times the size of New York City’s Central Park.
Some 30 minutes north of Phoenix, more than 30 cranes tower over a construction site 2½ times the size of New York City’s Central Park. A mammoth chip-manufacturing facility is rising, along with U.S. hopes of revitalizing a crucial industry. The plant’s biggest customer is Apple which is using its enormous purchasing power to help boost American chip production. The company is seeking to diversify its supply chain, score tariff exemptions and answer the call of two presidents to help the U.S. reduce its dependency on foreign suppliers for the foundational technology of the modern economy.
The world’s largest chip maker, Taiwan Semiconductor Manufacturing, or TSMC, is building the site, planning to spend $165 billion to build six chip plants and more, making it one of the largest construction projects in the U.S.
Under pressure from the Trump administration, Apple vowed last year to invest $600 billion in the U.S. over four years. Much of that spending isn’t related to manufacturing. It counts all spending in the U.S. including salaries for tens of thousands of Apple employees and retail staff.
But the commitment also includes the more than 100 million chips Apple plans to buy from TSMC Arizona this year, said David Tom, its global head of procurement. “We’re buying as much of the output of this fab as we can,” he said, referring to the fabrication plant.
The effort is modest relative to the global chip supply chain. And Apple’s purchases from the factory represent a small percentage of its total demand for chips, the key components that power its devices. Even so, the scale of construction, at TSMC and other suppliers, shows Apple’s effort to reshore at least a modest part of its chip supply chain.
The iPhone maker is committing billions to suppliers that make glass for devices in Kentucky, recycle rare-earth magnets in California and build silicon components in Texas. An AI server facility run by Foxconn is set to begin manufacturing the Mac Mini company executives said in exclusive interviews. The move to reconstruct the American semiconductor supply chain is rooted in tensions between the U.S. and China over Taiwan, where the vast majority of the world’s most advanced chips are made. China has threatened to take control of Taiwan. As a result, the U.S. government has applied pressure and offered financial incentives to spur the domestic build-out, while major chip buyers have pushed for domestic sources to reduce dependence on an island that could be invaded, or face steep tariffs, and that is prone to major earthquakes.
One beneficiary of Apple’s supply-chain power is GlobalWafers, a Taiwanese company that turns raw silicon into the blank wafers that companies such as TSMC pattern with trillions of transistors to turn into chips. Last year GlobalWafers opened a new plant in Sherman, Texas. Apple is helping the company sell its wafers by pushing TSMC and other chip makers to use them, said Mark England, president of GlobalWafers’s U.S. operation. The company hopes Apple’s help will enable it to expand the facility faster, said England, in part to take advantage of tax credits.
Apple designs its own chips. TSMC makes them. Apple has helped anoint TSMC as the world’s dominant chip manufacturer by committing to use TSMC’s leading-edge technology, also called a process node, in its designs. That gives TSMC confidence to invest gigantic sums in the new plants each successive chip generation requires.
Excerpted with edits (paywall): https://www.wsj.com/tech/inside-apples-push-to-build-an-all-american-chip-0cf39c16
Image by freepik https://manufacturingatmit.substack.com/p/manufacturing-update-10-march-2026
