Technologies

Apple to Use New Chips Made in Arizona

“This is an incredibly significant moment,” said Apple CEO Tim Cook.

Apple will be using microchips produced by the Taiwan Semiconductor Manufacturing Co. factory based in Phoenix, CEO Tim Cook said Tuesday at the event for the facility’s upcoming expansion.

“Today is only the beginning,” Cook said. “Today we’re combining TSMC’s expertise with the unrivaled ingenuity of American workers. We are investing in a stronger, brighter future, we are planting our seed in the Arizona desert. And at Apple, we are proud to help nurture its growth.”

President Joe Biden and chief executives from AMD and Nvidia were also in attendance at the event.

“Apple had to buy all the advanced chips from overseas. Now they’re going to bring more of their supply chain home,” Biden said. “It could be a game-changer.”

TSMC is already building a chip fabrication plant, or fab, in the Arizona city — a $12 billion investment to make processors with the newer 5-nanometer manufacturing process it uses to make iPhone processors and other chips today. At a ceremony to mark the arrival of the first chipmaking equipment at the fab, it announced it’ll also make improved 4nm chips there and build a second fab to make significantly more advanced 3nm chips. The total investment: $40 billion.

The new chips won’t be powering next year’s iPhones, though, because building fabs takes a long time. TSMC broke ground on its 5nm fab in April 2021, and it won’t start producing chips until 2024. The newly announced 3nm fab won’t make chips until 2026.

Customers of TSMC currently rely on fabs in Taiwan, but modern fabs in the US could help ensure a US supply of processors too. More US chip manufacturing also can encourage a broader manufacturing ecosystem, including some business partners that supply chipmakers with equipment and materials and others that test, package and assemble chips after they’re made.

It’s unlikely the US will match the breadth of Asia’s electronics manufacturing anytime soon, but if politicians and businesses get their way, the semiconductor industry might avoid the fate of industries like steelmaking and textiles that largely vanished from the US.

Processors are critical to just about every modern product and industry, not just phones and laptops. They are used to control cars, refrigerators, military hardware, toys and power plants. A global chip shortage triggered by the COVID pandemic kept products like Ford F-150 pickups and Sony PlayStation 5 consoles out of customers’ hands and revealed just how vulnerable global supply chains are.

The TSMC expansion comes weeks after Micron’s $20 billion “megafab” investment in New York announced in October, which ultimately could reach $100 billion, and Intel’s announcement of $20 billion in two new fabs outside Columbus, Ohio, which also could reach $100 billion investment this decade.

More disruptions are possible. Russia’s invasion of Ukraine showed that political borders aren’t necessarily fixed. That has particular importance to Taiwan, the island nation that China claims as its own and that’s home to most of TSMC’s manufacturing.

All these forces combined to nudge Congress into passing the CHIPS and Science Act. It promises nearly $53 billion in subsidies for fabs, research into the semiconductor technology that underpins processors and spending to train future workers. And it’s a much more assertive industrial policy than the US had in the past, when most chipmaking moved overseas to its current stronghold in Asia.

“We saw during the pandemic that something that we took for granted, global supply chains, were actually a key vulnerability for economic and our national security,” Ronnie Chatterji, acting deputy director for industrial policy at the White House’s National Economic Council, said in a press briefing.

Biden lobbied for the CHIPS funding and has touted it often as a success in rebuilding US manufacturing abilities. The idea is to try to encourage private companies to make their own investments knowing they’ll find an economically favorable climate.

“This is a marked departure from the economic philosophy that has governed for much of the last 40 years in this country,” said Brian Deese, director of the National Economic Council. With the old strategy, “you said that government should get out of the way, cut taxes for large companies, cut regulations, and assume that the American economy and American families would benefit.”

The new policy can mean a subsidy of about $3 billion to boost fab construction that otherwise costs about $10 billion. That makes the US more competitive with Asian countries like Taiwan, South Korea and China, Intel CEO Pat Gelsinger has said. Intel has a major presence in Chandler, immediately next to Phoenix, and is building $20 billion in new fabs there.

TSMC’s Arizona fabs will employ about 10,000 people overall, 4,500 of them working directly for TSMC. In addition, building the fabs employs more than 10,000 construction workers, the company said.

In addition to the over 10,000 construction workers who helped with construction of the site, TSMC Arizona’s two fabs are expected to create an additional 10,000 high-paying high-tech jobs, including 4,500 direct TSMC jobs. When complete, TSMC Arizona’s two fabs will manufacture over 600,000 wafers per year, with the estimated end-product value of more than $40 billion.

One big fan of TSMC’s expansion is Nvidia, which relies on TSMC to manufacture its graphics chips and AI accelerators. “Bringing TSMC’s investment to the United States is a masterstroke and a game-changing development for the industry,” CEO Jensen Huang said in a statement.

Deese and Chatterjee stopped short of promising that the new investments would benefit from the CHIPS funding. Details of how to apply won’t even arrive until the first quarter of 2023. But they pointed to comments from chip manufacturing executives who touted the legislation as a reason for their US investments.

“The passage of the CHIPS and Science Act was absolutely critical in providing the long-term certainty for companies like TSMC to expand their footprint and really expand their investment commitment to the United States,” Deese said.

Technologies

Trump Maintains US‑Iran Negotiations Continue Amid Tehran’s Denials of Duplicity

President Trump insists that US‑Iran talks are ongoing despite Tehran’s denial of any negotiation plans, while warning that only a deal or total surrender will allow passage through the Strait of Hormuz. Conflicting statements from both sides have heightened uncertainty as the conflict enters its sixth month.

On Monday, President Donald Trump asserted that negotiations between the United States and Iran are still taking place, even after Tehran stated it has no intention of engaging in direct talks with Washington.

In a fiery Truth Social post, Trump labeled Iran’s leaders “unbelievably duplicitous,” claiming they are lying about ongoing peace talks “whether Iran wants to admit it or not.” He repeated his assertion that the United States completely controls the Strait of Hormuz, despite maritime traffic through the crucial route lingering at only a small fraction of pre‑conflict levels.

He wrote, “Nothing reaches Iran unless we allow it, and nothing will pass unless a deal—or total surrender—is achieved.”

Earlier that day, Iranian Foreign Ministry spokesperson Esmail Baghaei told reporters there is no imminent plan for U.S.–Iran negotiations, contradicting Trump’s earlier comment that talks would resume Monday afternoon. Baghaei added that Iran’s only current discussions are with Oman concerning the Strait of Hormuz.

The conflicting statements have heightened uncertainty over the peace‑talk process and the broader conflict, now in its sixth month.

Trump’s assertion about new negotiations came a day after he said on Truth Social that he had agreed to cancel a massive strike against Iran “subject to being able to rapidly make a DEAL.” He said in the same post that Iran and other Middle Eastern countries had asked him to hold off on that attack because “the perimeters of a deal has been agreed to.”

Trump has claimed dozens of times throughout the more‑than‑five‑month‑long war that a deal is at hand. No permanent deal has been signed, and a temporary ceasefire reached in June has fallen apart.

Trump has also repeatedly threatened to launch devastating strikes against Iran before backing off. After the latest example, oil prices on Monday fell and stocks surged.

BMI, a research unit of Fitch Solutions, said in a note Monday that a broader diplomatic understanding on reopening the Strait of Hormuz is still achievable this quarter, while raising the probability of its escalation scenario to 35% from 25%, citing mounting military, diplomatic and economic signs of rising U.S.-Iran tensions.

“Diplomatic progress is likely to be punctuated by periodic military flare-ups, while miscalculation by either side could trigger a renewed escalation,” BMI analysts wrote in a note. The firm said the key issue to watch is the future governance of the strait, as the Iran-Oman talks — potentially backed by Gulf states, China and the U.S. — point to efforts to build a post-conflict shipping framework.

Shipping risks persist even as diplomacy appears to be advancing. The United Kingdom Maritime Trade Operations Centre said it received a report of an incident 20 nautical miles (23 miles) northeast of Khasab, Oman — at the mouth of the strait — with a tanker’s master reporting an explosion in close proximity to the vessel at about 20:37 UTC Sunday (4:37 pm ET). The vessel and crew were safe and authorities are investigating, UKMTO said, advising ships to transit with caution.

The proposal Trump announced over the weekend calls for the U.S. and Iran to return to negotiations and continue ironing out some of the thorny issues that had derailed diplomatic efforts, according to The Associated Press, citing a regional official involved in the mediation efforts.

The official said the proposal also includes a reopening of the Hormuz Strait and halting attacks across the region, including by Iranian-backed militias in Iraq on the Arab Gulf countries and Jordan.

The U.S., for its part, will end its naval blockade on Iran and allow Tehran to export its oil, the official said, adding that no deal has been reached, although the mediation efforts remained underway.

Trump’s weekend reversal has lowered the temperature after days of escalating attacks across the Gulf. Kuwait said Saturday that Iranian forces launched a wave of drones within its airspace, with its military destroying multiple aircraft after Iran targeted critical infrastructure in the country’s north.

A parallel track with Muscat is also advancing. Iranian diplomats said Tehran was close to reaching a new arrangement with Oman to manage shipping through the Strait of Hormuz, a deal critical to preventing the war from escalating further, according to the Financial Times.

Iranian officials said negotiations over future management of the Hormuz Strait with Oman, which sits on the opposite shore of the waterway, are in their final stages. The agreed shipping route would be different from those used before, according to Iran’s Foreign Ministry spokesperson, Baghaei, adding that the new route was separate from the issue of the strait’s reopening or continued closure.

Technologies

Oil Prices Slide as Trump Halts Planned Iran Strike

Oil prices dropped after Trump cancelled a planned strike on Iran, with WTI down about 5% and Brent near 5% lower. He said the move followed requests from Tehran and regional allies for a pause while a deal shaping the Strait of Hormuz and Iran’s nuclear program is negotiated.

Oil prices fell on Monday after President Donald Trump announced he had cancelled a planned strike on Iran. WTI futures dropped roughly 5% to $80.34 a barrel, while Brent slipped about 4.7% to $83.77 a barrel.

Trump said early Sunday he called off the strike after Iran and several Middle Eastern nations asked him to hold off, noting that the outlines of a deal had been agreed upon. He added that the prospective accord would entail the immediate, full opening of the Strait of Hormuz and an end to Iran’s nuclear ambitions, according to his Truth Social post.

The president had been considering another round of strikes as diplomatic hopes waned since the conflict began on February 28. He said the U.S. and Iran would meet for talks on Monday, but Iran denied any scheduled negotiations with Washington, citing PressTV. Iran’s foreign‑ministry spokesperson Esmaeil Baghaei clarified that Tehran was only discussing shipping routes through the Strait of Hormuz with Oman. In a follow‑up Truth Social message, Trump insisted that, regardless of Iran’s acknowledgment, the United States is indeed discussing a solution to a long‑standing problem created by Iran.

Technologies

Oil Prices Drop as Trump Cancels Planned Attack on Iran

Oil prices fell sharply after President Trump announced the cancellation of a planned strike on Iran, citing a new deal that would open the Hormuz Strait and end Iran’s nuclear threat.

Oil prices fell sharply on Monday after President Donald Trump announced that he had called off a planned strike on Iran.

West Texas Intermediate futures, the U.S. benchmark, slipped roughly 5% to close at $80.34 per barrel, while Brent crude, the international benchmark, declined 4.7% to settle at $83.77 a barrel.

Trump made the announcement early Sunday, saying he had canceled the strike following requests from Tehran and other Middle Eastern countries.

In a Truth Social post, he wrote: “We have just been asked by Iran, and other Middle Eastern Countries, to hold off any attack in that the perimeters of a deal has been agreed to.”

The president indicated that the proposed agreement would include the immediate, complete, and total opening of the Hormuz Strait, as well as an end to Iran’s nuclear threat.

Trump had been weighing additional strikes amid diminishing prospects for a diplomatic resolution to the conflict that began on Feb. 28. He stated that the U.S. and Iran would hold negotiations on Monday.

Tehran denied that talks were planned with Washington, according to state news outlet PressTV.

Iran’s Foreign Ministry spokesman Esmaeil Baghaei said Tehran was only holding talks with Oman regarding the routes ships can use through the Strait of Hormuz.

In a subsequent Truth Social post, Trump added that whether “Iran wants to admit it or not, we are, in fact, talking of a solution to a problem that they have caused for decades.”