A new Apple semiconductor design center is coming to Munich, Germany by late 2022, according to Bloomberg. In a statement, Apple CEO Tim Cook said the new facility, which is part of its plan to invest $1.2 billion to develop custom chips, will further develop 5G technology and explore a “new generation of technologies that bring power, speed, and connectivity to the world.” News of the design center comes as companies and governments around the world continue reeling from a raging global semiconductor chip shortage.
The ongoing global chip shortage has renewed interest by governments around the world to shore up domestic supplies of semiconductors. Apple’s new German chip facility comes just days after the European Commission announced new goals challenging member states to produce around 20% of the world’s chips by value by 2030, as part of its Digital Compass plan. For context, EU members accounted for 10% of global chips by value in 2020, per the BBC.
And the EU’s not alone. Last month, the Biden Administration pushed forward an executive order requiring federal agencies to conduct a 100-day review of supply chains related to semiconductor chips. While the order is unlikely to address the immediate chip shortage, it signals a renewed US interest in seeking out long-term technological self-sufficiency, a trend that began well before 2020 but was accelerated by the pandemic.
In China—which relies heavily on chips from other countries—businesses are bracing for a further global chip disruption by stockpiling equipment. A recent Bloomberg report found the country had purchased nearly $32 billion of chip production equipment last year from companies in Japan, Taiwan, and South Korea. That $32 billion is a 20% increase from 2019.
Just as different regions signal interest in shoring up semiconductor production, Apple has plans of its own to become less reliant on competitors for chips and other technology.
If these semiconductor trends continue, it could mark a significant shift away from the global, highly interdependent status quo and toward a more fractured system of regional competitors. While drastic changes to international technological trade are unlikely to happen overnight, recent US government policy changes and location moves by chipmakers signal a potential shakeup. This month, in a filing with the Texas state government, Samsung revealed plans to invest $17 billion into a US-based semiconductor manufacturing plant, called Project Silicon Silver. That comes in addition to plans announced last year by chipmaker TSMC that it would spend $12 billion to build out an Arizona-based chip factory.