December 7, 2022

The homegrown chip revolution has come to Phoenix.

Bloomberg I Getty Images Taiwan Semiconductor Manufacturing factory in Phoenix.

On the heels of several factors including COVID-disrupted supply chains and a bevy of government incentives, global chip giant Taiwan Semiconductor Manufacturing Company (TSMC) announced in a ceremony on Tuesday it would open two semiconductor chip manufacturing facilities in Arizona — and Apple said it would be one of the plant's first patrons.

"Thanks to the hard work of so many people, these chips can be proudly stamped 'Made in America,'" said Apple CEO Tim Cook at the event, per CNBC.

Semiconductor chips are typically made from silicon and are used in nearly every electronic device, from smartphones to microwaves.

It is often a cyclical industry, but the general chip shortage that began with the pandemic in 2020 grew painful for a number of industries, particularly car manufacturing. And it's estimated to last into 2023. Currently, the U.S. only produces around 10% of the world's chips.

For Apple, in particular, the chip shortage cost the company some $6 billion in sales in Q4 last year, Cook estimated, The Verge noted. The company has also faced headwinds in production related to China's "Zero COVID" policies, which only just now appear to be waning.

Related: Apple Says COVID-19 Restrictions in China Will Delay iPhone 14 Pro and Pro Max

The move to Arizona is also part of the company's general efforts over the last few years to move production out of China, from moving Apple Watch production to Vietnam and iPhone making to India, per The Verge.

Cook further said Apple is "proud to become the site's largest customer," via Tweet.

Apple silicon unlocks a new level of performance for our users. And soon, many of these chips can be stamped "Made in America." The opening of TSMC's plant in Arizona marks a new era of advanced manufacturing in the U.S. — and we are proud to become the site's largest customer. pic.twitter.com/rBoiEUwZaX

— Tim Cook (@tim_cook) December 6, 2022

TSMC produces around 50% of the world's semiconductor chips, per one expert's estimate. But it's based in Taiwan, whose extremely difficult relationship with China spurred anxiety over political issues delaying production, per CNBC, making a "Made in America" base for the company even more appealing.

TSMC on Tuesday celebrated its new plant in Phoenix and said it will be operational by 2024. The company plans to build another facility in the area that will open by 2026.

This is also reflective of a larger chips gold rush at home. President Biden signed the CHIPS and Science Act in August, which contains, among other things, $50 billion in investment in domestic chip manufacturing.

The money has not been distributed yet, but TSMC has said it will apply for it. Intel is also building Ohio and Arizona chip manufacturing facilities, CNBC reported.

Whatever happens, Cook said at the event he is leaning into Arizona.

"Today we're combining TSMC's expertise with the unrivaled ingenuity of American workers. We are investing in a stronger brighter future, we are planting our seed in the Arizona desert. And at Apple, we are proud to help nurture its growth," Cook said at the event.

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