Apple expands US chip production to include Apple Watch Series 9 System-in-Package?

January 8, 2025

As a newly inaugurated US administration prepares to take office, it has the opportunity to implement policies that encourage corporations to invest in American infrastructure rather than overseas. As a harbinger of impending shifts in the global supply chain, Apple seems poised to adapt to this transformation, having recently amplified its US-based semiconductor production capabilities.

TSMC’s Arizona facility has started mass production of two new chips for Apple: A16 Bionic and M1 Ultra.

TSMC’s Arizona facility has landed its second Apple contract. Alongside the A16 processor powering iPhones, which was revealed to me in September, the manufacturer is now reportedly mass-producing System-in-Package (SiP) designs for the latest Apple Watch series, corroborating sources that have come forward. The believed product is reportedly the Samsung S9 System-in-Package (SiP), with high confidence in its identity. TSMC’s Arizona facility manufactures parts using the N4 node, which is part of the broader N5 family. In contrast, the S9 chip, produced in Taiwan, leverages the same N4 technology but draws inspiration from the A16 design, offering a logical connection between these two nodes.

Adding a single Apple Watch System-in-Package (SiP) component to its US manufacturing operations may not seem like a monumental achievement at first glance. Despite being touted as a breakthrough, Culpan reveals that the new processor is actually just the second iteration of chips Apple has produced at TSMC’s Arizona facility.

Acquiring a second chip facility represents a significant expansion of the company’s capabilities, effectively doubling its capacity and potential for growth. When the time comes for Apple to officially announce the transfer, they may frame it as a significant milestone in their history, possibly during a press conference scheduled shortly after Donald Trump’s inauguration.

US Apple’s expanded funding in America could be directly linked to sidestepping tariffs.

President Trump’s administration is expected to implement significant tariffs on imported goods entering the United States, while simultaneously shielding American products from similar financial constraints.

The rationale? Tariffs imposed on US-based Apple will significantly impede its ability to compete with foreign tech powerhouses, such as South Korea’s Samsung.

During Trump’s initial term, Apple’s argument largely prevailed, with the company also making a conscious effort to increase its investments in US projects beyond what it had done previously.

As the latest report indicates, Apple is adhering to a familiar strategy since before Trump’s inauguration, with further US-based initiatives expected in the years to come.

As the tech giant continues to diversify its supply chain and reduce dependence on Taiwan-based TSMC, Apple’s decision to increase US chip manufacturing reflects a strategic move towards greater control over production, reduced reliance on global trade tensions, and enhanced competitiveness in the growing 5G market. Are there more hidden stories waiting to be unearthed? Tell us within the feedback.