On a desolate stretch of land dotted with cactuses some 30 minutes north of Phoenix, more than 30 cranes tower over a construction site 2½ times the size of New York City’s Central Park. A mammoth chip-manufacturing facility is rising, along with U.S. hopes of revitalizing a crucial industry.
The plant’s biggest customer is Apple, which is using its enormous purchasing power to help boost American chip production. The company is seeking to diversify its supply chain, score tariff exemptions and answer the call of two presidents to help the U.S. reduce its dependency on foreign suppliers for the foundational technology of the modern economy.
The world’s largest chip maker, Taiwan Semiconductor Manufacturing, or TSMC, is building the site, planning to spend $165 billion to build six chip plants and more, making it one of the largest construction projects in the U.S.
Under pressure from the Trump administration, Apple vowed last year to invest $600 billion in the U.S. over four years. Much of that spending isn’t related to manufacturing. It counts all spending in the U.S. including salaries for tens of thousands of Apple employees and retail staff.
But the commitment also includes the more than 100 million chips Apple plans to buy from TSMC Arizona this year, said David Tom, its global head of procurement. “We’re buying as much of the output of this fab as we can,” he said, referring to the fabrication plant.
The effort is modest relative to the global chip supply chain. And Apple’s purchases from the factory represent a small percentage of its total demand for chips, the key components that power its devices.
Even so, the scale of construction, at TSMC and other suppliers, shows Apple’s effort to reshore its chip supply chain is bearing fruit. The Wall Street Journal toured the desert southwest with Apple executives to see facilities that its purchasing heft and investments are helping to build. (News Corp, owner of the Journal, has a commercial agreement to supply news through Apple services.)
The iPhone maker is committing billions to suppliers that make glass for devices in Kentucky, recycle rare-earth magnets in California and build silicon components in Texas. An AI server facility run by Foxconn is set to begin manufacturing the Mac Mini, company executives said in exclusive interviews.
The race to reconstruct the American semiconductor supply chain is rooted in tensions between the U.S. and China over Taiwan, where the vast majority of the world’s most advanced chips are made. China has threatened to take control of Taiwan.
Chips are found in everything from missiles and jet fighters to smartphones, AI servers, appliances and electric toys. Americans struggled to buy new cars during the Covid pandemic partly because of chip supply disruptions.
As a result, the U.S. government has applied pressure and offered financial incentives to spur the domestic build-out, while major chip buyers have pushed for domestic sources to reduce dependence on an island that could be invaded, or face steep tariffs, and that is prone to major earthquakes.
One beneficiary of Apple’s supply-chain power is GlobalWafers, a Taiwanese company that turns raw silicon into the blank wafers that companies such as TSMC pattern with trillions of transistors to turn into chips. Last year GlobalWafers opened a new plant in Sherman, Texas.
The quarter-mile long facility begins with a digital-era Stonehenge: a room of 35-foot tall machines that grow torpedo-shaped silicon ingots weighing hundreds of pounds. The ingots are cut into wafers, polished and placed into special shipping containers that will carry them throughout the chip supply chain so their delicate properties aren’t ruined.
Silicon is cut at GlobalWafers' plant in Sherman, Texas. Furnaces are used to melt the silicon at the plant.
Apple is helping the company sell its wafers by pushing TSMC and other chip makers to use them, said Mark England, president of GlobalWafers’s U.S. operation. The company hopes Apple’s help will enable it to expand the facility faster, said England, in part to take advantage of tax credits.
Apple designs its own chips. TSMC makes them. Apple has helped anoint TSMC as the world’s dominant chip manufacturer by committing to use TSMC’s leading-edge technology, also called a process node, in its designs. That gives TSMC confidence to invest gigantic sums in the new plants each successive chip generation requires.
“The role we play for the whole industry is that by working together [with TSMC], we can ramp that node to high volume, high yield, very fast, and then others will follow as we go on to the next node,” said Apple’s Tom.
TSMC’s Arizona site will be a company town on more than 2,000 acres if its plans are ultimately completed. One fab is built and producing chips, a second will come online next year and a third, currently a steel-beam skeleton, by 2030. Three more are planned after that. Next door there will be apartment buildings and a Costco.
Two people walk along a sidewalk under a skybridge connecting two modern buildings in Phoenix.
As large as TSMC’s new Arizona plans are, they trail its Taiwan operation in both volume and technology. TSMC has four facilities in Taiwan that make more than 100,000 chip wafers a month, plus seven smaller ones; the Arizona site won’t reach similar volumes until all six fabs are built, the company has said.
And it is in Taiwan where it makes its most advanced chips, which today have transistors as small as two nanometers. The smaller the transistors, the more computing power can be packed onto a chip. In Arizona, it makes four and five nanometer chips; two nanometer chips won’t be made there till 2030.
The main chip “brain” in the newest iPhones and Macs requires the more advanced technology, though Apple devices have dozens of chips in them, many of which use the older technology. Advanced AI chips use the older technology, too. Nvidia makes some of its Blackwell processors at TSMC Arizona.
Down the road from TSMC is another construction site, this one over 100 acres, where Amkor Technology is planning two chip “packaging” facilities, with the help of an Apple investment. When the first is completed in 2027, it will take chip wafers from TSMC, dice them into individual chips and add connectors so the chips can be plugged into devices. Amkor has said it is spending $7 billion on the site. It declined to specify the size of Apple’s investment.
Construction workers prepare foundations for Amkor Technology's advanced packaging and test campus.
The supply chain ends at massive assembly plants where Apple and contract manufacturing partners churn out hundreds of millions of devices a year. Together with Foxconn, it has built a modest assembly line in Houston, where it makes AI servers, which will be used to power more AI features that Apple adds to its devices. It churns out about 10 servers an hour.
Apple has also experimented with building its high-end Mac Pro desktop in Austin, Texas. That operation has shrunk since it opened in 2013. People familiar with it say it suffered because of low demand and challenges with American workers.
Workers assemble circuit boards and move a rack of Apple servers in Houston.
Apple is expanding the Houston operation with a plan to assemble another desktop computer there, the Mac Mini. Along with Foxconn, it is converting a cavernous warehouse on the site into more than 200,000 square feet of manufacturing space later this year.
Apple Chief Operating Officer Sabih Khan said the company is more confident about plans for the Mac Mini in Houston compared with the Mac Pro in Austin, in part because of higher and more reliable demand.
Apple sells hundreds of times more iPhones than Mac Minis, estimates Consumer Intelligence Research Partners and Apple still has no plans to reshore iPhone assembly. Khan said Apple is focused on simpler reshoring goals to start.
“We’re very focused on the things that we believe are critical for future innovation and things that will differentiate our products over time,” he said. “And it’s components, it’s sub-assemblies, it’s advanced silicon.”
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