Apple Pushes to Bring Manufacturing Jobs to the U.S.

The Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker and a major Apple supplier, has announced that it is considering building its most advanced plant yet in the United States.

The Taipei-based company’s chairman Morris Chang first publicly mentioned the possibility of a US foundry in January 2017, though he expressed the reservation that a plant “ may not necessarily be a good thing.”

TSMC will decide whether to break ground for its new foundry in the States next year in 2018. The chip plant is estimated to cost $16 billion and will specialize in producing 3 nanometer (nm) chips of the variety that will be used in future iPhone and iPad models.

“We won’t make a decision until next year,” TSMC spokesperson Michael Kramer said.

“We would sacrifice some benefits if we move to the States. But we have flexibility in Taiwan. If an earthquake happened for instance (in Taiwan), we could send thousands of people here as support, whereas it’s harder in the States”.

The news that TSMC may forgo Taiwan’s science park in Kaohsiung as a plant location rattled Taiwan and set off a frenzy of local media speculation. Taiwan’s technology minister Chen Liang-gee spoke to Chang and gained assurance that the company, which earns about 65 percent of its revenues from the United States, would continue to invest in Taiwan.

“(We) will completely cooperate with TSMC to satisfy their demands on building the manufacturing site, while building a quality environment with talent and advanced technology that will make it easier for high technology companies to invest in Taiwan,” Chen said, according to the China Post.

TSMC is slated to receive orders for its 10nm A11 processor chips for the next generation of iPhones, which are scheduled for launch later this year. The Apple chip manufacturer is also working to receive the initial designs for chips using the 7nm FinFET process, which will be used in future iOS devices.

Apple’s Push to Bring Manufacturing to the US 

Apple’s manufacturing and global supply chain became a politically tense and highly scrutinized issue during last year’s election season, when Donald Trump promised to force the world’s most valuable public company to build iPhones in the US. Since then, Apple has been pushing to expand its activities in the US and coax other manufacturing partners into building plants here. Last November, for instance, the company asked key partners Foxconn and Pegatron to investigate ways to bring the iPhone assembly plants back to the US.

As such, Pegatron CEO Liao Syh-Jang recently stated that the company is willing to move plants to the US if Apple foots the bill for the added costs.

Beyond cost, there’s another major hitch that Apple and its partners face. Apple CEO Tim Cook has stated that one big obstacle is the lack of skilled laborers in the US. “China puts an enormous focus on manufacturing. The U.S., over time, began to stop having as much vocational kinds of skills. I mean, you can take every tool and die maker in the United States and probably put them in a room that we’re currently sitting in. In China, you would have to have multiple football fields,” Cook said.

This sentiment was echoed by Foxconn chairman Terry Gou, who said that US manufacturers lacked the supply chain and skilled labor force required to build display panels. His company, another major Apple manufacturer, is reportedly mulling building a $7 billion display manufacturing plant in the US with joint investment from Apple, which could employ between 30,000 and 50,000 people.

“Apple is willing to invest in the facility together because they need the [panels] as well,” Gou said to reporters.

While foreign Apple suppliers have obstacles to overcome before coming to the US, Cook himself recently signaled last month that Apple would move to expand its massive US manufacturing and supply base even further.

“We love this country”, said Cook last month. “We will continue to look for ways to expand and help in any way that we can.” He also reminded the public that two-thirds of Apple employees are US-based, despite the fact that one-third of its revenues come from the US. Apple, which currently spends around $50 billion a year on US suppliers, supports several hundred thousand jobs in 33 states and 8,000 suppliers, not to mention more than one million iOS developers.