00:00Talk to us about how Apple is rethinking its supply chain.
00:05Well, we've known for the last few years now that Apple is increasingly looking to do more in the United
00:10States.
00:10They've put out multiple announcements. They did a $600 billion investment alongside the Trump administration into the U.S.
00:18And now they're looking for secondary suppliers to its work on manufacturing its main processors.
00:24These are the SOCs, the engines that power the Mac, the iPhone, the iPad, you name it.
00:30As you know, for well over a decade, they've designed those processors in-house and they've relied on TSMC to
00:35produce them in Taiwan.
00:37Increasingly, they've been shifting some of that manufacturing to a TSMC fab in Phoenix.
00:43But additional fabs have been slow to come online, even though Apple says they'll have 100 million chips out of
00:48the area by the end of this year.
00:50But they also need additional suppliers.
00:52Obviously, there's geopolitical tensions, there's supply chain issues.
00:55And there's just the idea that it's not smart to have all your eggs in one basket, in one geography
01:00and in one supplier.
01:02So they've had early discussions with both Intel and Samsung about using new fabs that they're opening in the United
01:08States
01:08to potentially down the road produce these A-series and M-series chips for Apple.
01:14Does it have to make sense that it's the AI hardware, the U.S. hardware that this goes into?
01:23Because is there going to be margin pressure here by making them in the United States?
01:26This is also sort of more of a political gambit?
01:30I mean, in some cases, there are politics involved here, right?
01:34Working with Intel will give Apple a better relationship or even better relationship they have already with the Trump administration,
01:41given they've sort of taken ownership through the U.S. government of a stake of Intel.
01:46And obviously, you know, Donald Trump has been touting Intel significantly in recent weeks,
01:51including its stock price and their investment growth, given their recent market cap.
01:56So definitely there's a political factor here.
01:57But I think the biggest thing is concerns over what happened in Taiwan.
02:02If there's a situation with China, obviously geopolitically, it's not great.
02:06Many months ago, there were concerns for Apple related to tariffs
02:09and needing to do more chips in the U.S. to avoid those tariffs.
02:12But I think the bigger picture overall is wanting additional suppliers
02:16for perhaps the most critical component in the entire supply chain.
02:20Even for things like displays or speakers, you see Apple using several different suppliers
02:25to offset supply chain issues, to not have all of their eggs in one geo or one basket.
02:30You never know what could happen.
02:31And so it's really for Apple-only smart business to have a backup here.
02:35If they're not able to get the chips they need out of Taiwan, they're not going to have a very
02:39good year.
02:39It's actually probably the biggest risk factor for Apple right now
02:43is getting all their chips out of Taiwan.
02:45So expansion on the silicon front is necessary
02:48because without the silicon, the Apple products don't work.
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