Apple strikes deal with Broadcom to boost U.S. chip production

Apple strikes deal with Broadcom to boost U.S. chip production

Apple has announced a multibillion dollar deal with the U.S. chipmaker Broadcom to use chips manufactured in the United States, as part of its 2021 plan to invest $430 billion in the U.S. economy over five years.

The move comes as the U.S. seeks to reduce its reliance on foreign chip manufacturers amid a global semiconductor shortage and national security concerns.

As part of the multi-year deal, Broadcom will collaborate with Apple to develop 5G radio frequency and wireless connectivity components for Apple’s devices. According to Apple, the technology will be designed and built in facilities across the country, including in Fort Collins, Colorado, where Broadcom has a major facility.

“Apple already helps support more than 1,100 jobs in Broadcom’s Fort Collins FBAR filter manufacturing facility, and the partnership will enable Broadcom to continue to invest in critical automation projects and upskilling with technicians and engineers,” Apple said in a statement on Tuesday.

The announcement comes as the U.S. continues to turn its attention towards domestic semiconductor production in an effort to reduce American companies’ reliance on foreign chipmakers. Last summer, President Biden signed the bipartisan CHIPS and Science Act, one of the biggest federal investments in a private industry, which includes $52 billion in subsidies for domestic chip manufacturers, $24 billion to fund a tax credit for new semiconductor manufacturing facilities, and more than $170 billion over five years to boost U.S. scientific research.

The vast majority of advanced semiconductors are manufactured in China and Taiwan, which many U.S. officials viewed as a national security concern. Pandemic-spurred supply chain shocks that triggered a semiconductor shortage also exposed global reliance on a few key players for chips that are essential in the electronics and automotive industries, in particular.

“All of Apple’s products depend on technology engineered and built here in the United States, and we’ll continue to deepen our investments in the U.S. economy because we have an unshakable belief in America’s future,” Apple CEO Tim Cook said in a statement.

Apple’s deal with Broadcom is also seen as a response to the growing competition from other regions that are ramping up their own chip production capabilities. Member states of the European Union agreed their own €43 billion ($46 billion) Chips Act to boost semiconductor production in the bloc, while the U.K. also unveiled its £1 billion ($1.2 billion) semiconductor strategy in recent days.

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