Apple Inc. is accelerating its diversification of its global supply chain, significantly increasing chip sourcing from the United States and expanding iPhone production in India, as it looks to reduce reliance on China amidst escalating trade tensions, Bloomberg reports.
CEO Tim Cook highlighted these shifts during the company’s post-earnings conference call on Thursday.
Cook stated that Apple plans to source over 19 billion chips from the US this year. This move is heavily reliant on Taiwan Semiconductor Manufacturing Co. (TSMC), which is expanding its operations in Arizona to six plants. TSMC has already begun manufacturing processors for lower-end iPads and Apple Watches at its new facility. Apple and TSMC have committed hundreds of billions of dollars in US investments, aligning with the White House’s push to bring advanced manufacturing to the country.
“The iPhone maker will obtain tens of millions of advanced processors from a new facility in Arizona operated by TSMC this year,” Cook confirmed.
The increasing prominence of India as a manufacturing hub was also a key takeaway from the call. Cook affirmed expectations that Apple will eventually manufacture the vast majority of its US-bound iPhones in India. This move is seen as a strategic shift, reducing output from China at a time when the Donald Trump administration threatens punitive tariffs on goods from its Asian rival. India was mentioned almost as frequently as China during the conference call, highlighting its growing significance for Apple.
Apple already manufactures 20%, or one in five, of its iPhones in India. The company anticipates importing most iPhones destined for the US market from India by the end of next year.
Despite these announcements, Cook remained tight-lipped on the potential impact of further tariffs on consumer electronics, stating that it was “very difficult to predict beyond June.” CFO Kevan Parekh noted that the company’s commentary assumes current global tariff rates and policies remain in effect, and that the global macroeconomic outlook doesn’t worsen.
The announcement of Apple’s quarterly earnings failed to fully reassure investors, with shares declining as much as 4.2% in late trading Thursday after the company released second-quarter results that included weaker-than-expected sales in China.
Beyond increasing chip procurement, Cook also mentioned that Apple sources glass for iPhone screens from the US, likely referring to Corning Inc. Earlier this year, Apple announced a $500 billion investment in the US over the next four years, including the manufacturing of AI servers at a plant in Texas.
While Trump’s administration has encouraged Apple to begin building its devices in the US, a large-scale relocation remains unlikely in the near future. For now, Apple is focused on ramping up local procurement of chips and other components and diversifying its manufacturing footprint to include India as a key production hub.
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