Apple announces US$30bil Broadcom deal for US-made chips

Apple has faced sustained pressure from US president Donald Trump over its heavy reliance on overseas manufacturing, mainly in China. (AFP pic)

SAN FRANCISCO: Apple on Wednesday announced a multiyear agreement worth more than US$30 billion with chipmaker Broadcom to design and produce chips in the US.

The deal, which would yield more than 15 billion domestically manufactured chips, forms part of Apple’s broader pledge made to the Trump administration to invest US$600 billion in the US economy over four years.

Apple, under outgoing CEO Tim Cook, has faced sustained pressure from president Donald Trump over its heavy reliance on overseas manufacturing, mainly in China.

The tech giant has sought to demonstrate growing domestic investment as trade tensions and tariff threats from Trump imperil its business model.

The agreement is the largest yet under Apple’s American Manufacturing Program (AMP), launched last year to boost domestic production and build what the company described as an end-to-end silicon supply chain in the US.

“The cutting-edge components built in Fort Collins are essential to delivering the incredible performance and connectivity our customers expect,” Cook said, thanking Trump and his administration for backing the effort.

Broadcom chief executive Hock Tan called the expanded commitment a chance to grow the company’s manufacturing presence in the US state of Colorado, “where we create groundbreaking technology that connects people around the world”.

After a long history of turning to companies like Intel for chips, Apple has spent more than a decade building a custom chip-making empire for its signature products like the iPhone and MacBook.

Its own processors for mobile devices and PCs rely on contract manufacturers – chiefly Taiwan Semiconductor Manufacturing Company (TSMC) – for production.