Inside the Secret Briefings That Pushed Apple to Move Chip Production to the US [Report]

Washington has spent years urging Silicon Valley to reduce its reliance on Taiwan for high-end semiconductor manufacturing. Despite repeated classified briefings and billions of dollars in federal incentives, the tech industry has hesitated to shift supply chains, citing cost concerns and the unmatched efficiency of Taiwan Semiconductor Manufacturing Company. The island currently produces roughly 90 percent of the world's most advanced computer chips, creating a single point of failure that federal officials view as a national security vulnerability. Treasury Secretary Scott Bessent recently warned that as much as 97 percent of leading-edge chips are made in Taiwan, calling it the single biggest point of failure in the global economy.



The New York Times has published an extensive investigation detailing the behind-the-scenes friction between the U.S. government and companies like Apple, Nvidia, and Intel. The stakes are immense. A confidential 2022 report commissioned by the Semiconductor Industry Association found that a blockade of Taiwan would trigger a historic economic crisis. If the supply of chips from the island were severed, U.S. economic output could fall by 11 percent, causing twice the economic damage of the 2008 recession. China's economy would contract even more sharply, and global losses could exceed $10 trillion, according to separate economic estimates. Most major tech companies currently hold only enough semiconductor inventory to maintain operations for a few months if shipments suddenly halt.


The push to reshore chip manufacturing accelerated after a series of stark warnings. In early 2021, military officials told Congress that China's leadership wanted its armed forces ready to take Taiwan by 2027. By July 2023, the White House summoned Apple CEO Tim Cook, Nvidia CEO Jensen Huang, and other top executives to a secure room to hear direct assessments from the CIA and the director of national intelligence. Following the presentation outlining the geopolitical risks, Cook reportedly told officials that he slept "with one eye open."


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Despite these warnings and the passage of the $50 billion CHIPS Act, tech giants initially resisted placing major orders with U.S. foundries. Chips made in the United States cost more than 25 percent above those fabricated in Taiwan, weighed down by higher labor, material, and permitting expenses. Industry executives also questioned whether American facilities could match TSMC's most advanced production nodes. As one industry consultant described the mindset, companies often assumed that if a crisis hit Taiwan, "everyone else is screwed," reducing the incentive to move first.

Apple is now taking concrete steps to adjust its sourcing. The company has started holding all-day engineering meetings with Intel to rigorously evaluate its domestic manufacturing capabilities. This activity supports recent analyst predictions that Intel is poised to secure Apple chip orders for future devices. The evaluation phase comes shortly after the U.S. government secured a 10 percent equity stake in Intel as part of a deal that preserved the chipmaker's $8.9 billion in federal subsidies.


Apple has also expanded its financial commitments to stateside production. Last summer, Cook met with President Trump in the Oval Office and pledged to invest another $100 billion in the United States. This funding is expected to bolster TSMC and other domestic chip manufacturers. Apple recently confirmed it is securing 100 million U.S.-made chips from TSMC this year and is moving forward with plans to finalize Mac mini assembly in Texas.


[Apple Houston]

The Trump administration has escalated its pressure on the industry to utilize these domestic facilities. Commerce Secretary Howard Lutnick recently presented an ultimatum to top chip executives, demanding they source 50 percent of their semiconductors from American plants or face a 100 percent tariff. In response to those tariff threats and negotiations, TSMC agreed to increase its U.S. investment by $100 billion, adding four more chip factories by 2028, two years ahead of its prior timeline. Taiwanese semiconductor firms have since outlined an additional $150 billion in U.S. investment commitments, alongside a broader $250 billion agreement backed by credit guarantees to expand advanced chip manufacturing in America.

Nvidia, which is currently on track to overtake Apple as TSMC's largest customer, has also committed to buying chips from the new Arizona plants. However, the supply chain remains deeply intertwined with East Asia. Even when an advanced AI chip is fabricated in Arizona, the complex packaging process required to connect it with other components still requires shipping the silicon back to a factory in Taiwan before it is ready for deployment. For now, even as billions flow into American fabs, the world's most advanced semiconductor ecosystem remains structurally tied to Taiwan in ways that cannot be untangled overnight.