Apple Asks US Government for Tax Breaks As it Aims to Move Away From China Chip Production

Urian B., Tech Times 21 October 2020, 10:10 pm

Apple Inc. has been extending efforts in lobbying with the United States government in order to avail tax breaks to support the growth of domestic chip production. This suggests that the known iPhone maker is actually keen to move a bit more of its own supply chain towards the United States.

Apple is lobbying for tax breaks in the United States

During 2nd and 3rd quarter disclosure reports, the iPhone company stated that it lobbied officials from the Treasury Department, Congress, and even the White House on certain tax topics that included issues that were related to tax credits for the production of domestic semiconductors.

Ever since the company released its very first custom processor some time back in 2010, chips have then become a major performance differentiator for the iPhone company. Apple even designs some of the particular components in house, but then outsources its production to the Taiwan Semiconductor Manufacturing Co.

Apple's parts are being outsourced from China, Taiwan, etc.

There are also many other Apple parts that are made in China. This has resulted in the exposure of the company to many import tariffs along with other risks from the trade war happening between the United States and also China. Taiwan, where the known TSMC operates, has become one of the increasing focus of the known geopolitical tension happening between both the United States and China.

Apple's very recent lobbying does coincide with a push by the iPhone company along with its partners to be able to move a portion of their production away from where they currently operate, China, and back towards the United States in a few number of cases. There is also a much broader effort being made by the United States semiconductor industry to be able to get government support for the growing domestic production.

According to an article by Bloomberg, Apple's lobbying efforts in the United States are currently being led by the known company veteran Tim Powderly, who was known to have been promoted around the very time that Cynthia Hogan, Apple's own prior top US lobbyist, left the position in order to join the former vice president known as Joe Biden's own campaign.

TSMC could be expanding to the United States as well

According to a report by Tech Crunch, TSMC would actually be building a $12 billion chip plant in Arizona. The company has been putting effort into lobbying officials in order to avail tax breaks.

Apple is known to also source out different components from several other chip makers that all build some of their products well within the United States. This includes Broadcom Inc. as well as Texas Instruments Inc. Apple has also started using the known Qualcomm Inc. again for their own iPhone modems.

Apple is also making use of a San Diego, California-based chipmaker in order to build a few of their products domestically through their production partner known as Global Foundries.

This article is owned by Tech Times

Written by Urian Buenconsejo