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TSMC chairman Chang talks about opening a facility in the U.S.

TSMC chairman Chang talks about opening a facility in the U.S.
Almost a year ago, then presidential candidate Donald Trump talked about imposing a 35% import tax on products made overseas and sold in the U.S. A week away from taking office, Trump's goal is to have companies like Apple produce more of their products in the U.S. to give more jobs to stateside workers. While most Americans would be happy to see more factories humming in the U.S., the higher costs for workers and supplies in the states could result in soaring prices for many finished products.

Still, Apple spoke with its supply chain during the summer, and contract manufacturer Foxconn agreed to see if U.S. production was feasible. The problem for a company like Apple is that under the current setup, most of its suppliers are all located near each other making it easy for Apple to order additional parts if needed. But it would appear that some of Apple's suppliers are taking possible U.S. production of the iPhone seriously. One of those firms is TSMC, the company that produces the A10 chipset that powers the Apple iPhone 7 and Apple iPhone 7 Plus.

TSMC chairman Morris Chang addressed the issue during an investors' conference on Thursday. The executive said that his company could build a wafer fab plant in the states in response to Trump's call for more manufacturing in the U.S. Chang admitted that stateside production for TSMC "may not necessarily be a good thing," for both the company and its customers.

Because TSMC is helping fabless and IDM companies succeed in the U.S. without a foundry, Chang apparently believes that his firm is already adding jobs in the U.S. However, we're not sure that this type of reasoning will appease the President-elect, and neither is TSMC's chairman. Thus, we have Morris Chang talking about TSMC building a factory in the U.S. Once it has planted its flag in the states, TSMC could eventually produce future chipsets for Apple in America.

source: Digitimes

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16 Comments

AlikMalix unregistered

Geez, Trumps words already putting the hammer down. But I bet Apple wouldn't be able to sell their devices any higher, without loosing customers. Apple will just have to take the hit, and the rest of the companies that want to sell in the US. Either way - More Jobs, more dollars circulating - better economy in the US...

belovedson

Posts: 1060; Member since: Nov 30, 2010

It really makes no difference where the apple products are made. There has been a steady increase in price. The difference will be their profit margin. Simply put apple needs to be less greedy and share holders need to be more patient.

vincelongman

Posts: 5552; Member since: Feb 10, 2013

Also it wouldnt make a difference because the cost of fabbing chips in the US isn't really much higher than in Taiwan Wages/sallaries at fabs are high compared to at factories Hence why Samsung and GF can fab chips in the US, and still compete with TSMC Most of Intel's fabs are also in the US too

Macready

Posts: 1776; Member since: Dec 08, 2014

The cost of the move alone would have to be leveraged, so that would certainly make a difference, hence the comment from TSMC on possible benefits, or possibly the contrary.

vincelongman

Posts: 5552; Member since: Feb 10, 2013

TSMC are in talks to open A new fab in the US NOT move ALL their fabs to the US TSMC, Samsung, Intel and GF often build new fabs (although usually they upgrade existing fabs) e.g. Samsung are planning on building another fab in Korea If TSMC go ahead, they'd presumbly still produced most in Taiwan Like how Samsung produced some in the US and some in Korea

AlikMalix unregistered

Hope you're right, for apples and consumers sake.

Macready

Posts: 1776; Member since: Dec 08, 2014

Rather simplistic and not how economics work unless you 're in total denial of any existence of price elasticity of demand. Higher prices lead to lower demand and inflation, which can affect far more people than those who possibly gain jobs, if an extra slump in sales doesn't fully mitigate those jobs already. Now if the government would start subsidizing local production directly or indirectly (taxing import for example) you could delay the latter effects. But in the end the tax payer still pays.

AlikMalix unregistered

Well I guess my view was optimistic and your is pessimistic - Butbi don't disagree with you either.

mikehunta727 unregistered

Trump's have no impact here, this was already in their planning. Trump wants to take credit, or try and takes credit for companies plans that have been set already years in advance, like with Sharp, Ford, etc,

AlikMalix unregistered

I'm going from how article puts it.

Leo_MC

Posts: 5740; Member since: Dec 02, 2011

Why would anyone care about those taxes when every worth buying product is build outside of US? Does anyone think that the US buyers would suddenly buy Blu, Nextbit or any other phantom brand over iPhones and Galaxyes? That's a joke. US citizens will spit on Trump's idiotic ideas as soon as those ideas are going to f**k up with their wallets.

trojan_horse

Posts: 5868; Member since: May 06, 2016

"US citizens will spit on Trump's idiotic ideas as soon as those ideas are going to f**k up with their wallets." Maybe, but it'll also bring im more jobs in the US... Besides, most of those purchasing iPhones are wealthy anyways. Aprice hike by $100 or $200 because of manufacturing being done in the US, won't hurt them... will it?

mikehunta727 unregistered

Yes it would hurt alot, that would add $300 minimum on top of the iPhone, which would reck its sales. Apple and TSMC and others know this, it isn't gonna happen. Also, Trumps economic plan and jobs plan according to top level economists and etc, his plans would do much more harm then good. Also the fact that Trump wants Obamacare repealed desperately only means more costs. Estimated value of repealing Obamacare is 9 trillion over 10 years. House committee just passed a law though so that now we will never be able to know how much the repeal will cost in the long run, hiding the costs from us and Democrats too. Future isn't looking bright with him at the helm. Hopefully he gets impeached sooner then later

AlikMalix unregistered

I disagree. It will hurt Apple sales for every $100 increase. I would suggest reading macreadys post #4 above.

Leo_MC

Posts: 5740; Member since: Dec 02, 2011

Apple is going to rise prices all over the world to "subsidize" the prices of idevices built and sold in US, but only until EU, China, Japan (and other big markets) are going to take similar measures, which means Apple is going to create in US 10.000 LOW paid jobs and export 1.000 HIGH paid jobs. Sooner, rather than later, US watch makers, wine makers, food producers will want simmilar protection, which will further f**k up that country.

Leo_MC

Posts: 5740; Member since: Dec 02, 2011

Oh, I forgot to mention: 10.000 jobs that are going to be done by robots in the nearest future.

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