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Apple already increasing US production efforts, report says

updated 10:40 am EDT, Thu July 19, 2012

Company allegedly fueling chip production

A number of US suppliers are already seeing increased business from Apple, according to sources for AppleInsider. One person in the industry notes that chipmakers like Avago and Texas Instruments have been increasing US production during the past year because of orders from "a large personal electronics manufacturer" that continues to find record-breaking sales. Because they're afraid to single out Apple by name, the person explains that some people in the industry like to joke about growing orders from an unnamed "fruit vendor."

Avago is said to be planning to buy as much as $130 million in manufacturing equipment to expand in Fort Collins, Colorado; previously, IHS iSuppli has reported that Avago makes a part for the iPhone 4S used to connect to multiple wireless networks. TI, meanwhile, is ramping up production at the chip factories in its home state, despite closing factories in Japan and even Houston. Another AI source explains that the company is simply focusing on products with more demand. Specifically, the company is getting more orders for power management chips used in devices like smartphones. TI makes the touchscreen controller in the iPhone 4S, and both a control part and power management chips for the third-gen iPad. In March, the the company was rumored to have started on power chips for the sixth-generation iPhone.

One source claims that TI's power chip business gets large orders from Apple, which has contributed to "thousands of jobs" being created in the US. A number of these are said to be high-salaried jobs demanding engineering degrees, especially at a fab in Richardson, Texas.

Fairchild Semiconductor, thought to make power supply chips for iOS devices, is said to be producing over capacity at its American plants, and adding even more equipment in the country. 200mm wafer and 150mm wafer plants in South Portland, Maine and West Jordan, Utah are claimed to be maxed out according to one source, who adds that Fairchild parts ordered by Apple will primarily come from the Maine plant during the second half of 2012.

Industry rumors hint that a semiconductor maker based in San Jose, California, Maxim Integrated Products, has also snagged orders from Apple. Aside from San Jose, the company has two Texas plants in San Antonio and Dallas, and a fourth facility in Beaverton, Oregon. Senior manufacturing VP Vivek Jain notes that about 50 percent of its wafer production happens in the US, and it recently began a multi-year upgrade investment in the country, which should not only expand quality and capacity but absorb production from firms Maxim has swallowed up.

Jain does say that Maxim's partners have not specifically asked it to build more products in the US, but adds that the company thinks a US focus gives it an edge. "We have a very talented pool of resources in Silicon Valley and across [the] US to develop new process technologies and do cost effective manufacturing, while protecting critical intellectual property," he says. The investment plan should cost about $200 million, and result in still more jobs.

At an All Things Digital conference in May, Apple CEO Tim Cook defended the company's current heavy reliance on Chinese manufacturing, which has been tainted with accusations of sweatshop-style working conditions and causing pollution. Cook claimed that the company tries to do as many things as it can in the US, but that things like tool and die manufacturing just aren't practical in America.

by MacNN Staff



  1. Inkling

    Senior User

    Joined: 07-25-06

    Apple's being smart. China's behavior with rare earth metals indicates that the country can't be trusted as a steady supplier. It is better to expand your sources, particularly sources in your home country.

    Building where you sell also makes sense in another way. It insulates you from exchange rate fluctuations. That's one reason why Asian automakers have factories here.

    In short, going where labor is the cheapest isn't always the smartest move.

  1. Spheric Harlot

    Clinically Insane

    Joined: 11-07-99

    Originally Posted by InklingView Post

    Building where you sell also makes sense in another way. It insulates you from exchange rate fluctuations. That's one reason why Asian automakers have factories here.

    Primarily import tariffs, though.

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