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Apple Inc AAPL CEO Tim Cook reportedly said that the iPhone maker is making preparations to source chips from an upcoming factory in Arizona in the United States.
What Happened: Cook made the revelation at an internal meeting with engineering and retail employees in Germany, reported Bloomberg.
“We’ve already made a decision to be buying out of a plant in Arizona, and this plant in Arizona starts up in ’24, so we’ve got about two years ahead of us on that one, maybe a little less,” Cook reportedly said at the meeting.
Cook said he was “sure” that Apple will also source from Europe as Arizona plans to become “more apparent,” as per the report.
See Also: Best Semiconductor Stocks Right Now
Why It Matters: The Arizona plant mentioned by Cook is likely to be run by existing chip partner Taiwan Semiconductor Manufacturing Co. Ltd TSM, according to the report.
TSMC shares shot up 10.6% in Tuesday’s after-hours trading, according to Benzinga Pro data.
Apple did not immediately respond to Benzinga’s request for comment, while TSMC told Benzinga it does not comment on individual customers.
Why It Matters: Apple currently sources 60% of its processors from TSMC plants in Taiwan. “Regardless of what you may feel and think, 60% coming out of anywhere is probably not a strategic position,” Cook reportedly said at the meeting.
TSMC is a beneficiary of the CHIPS and Science Act of 2022, which provides $52.7 billion of direct financial assistance for the construction and expansion of semiconductor manufacturing facilities in the United States and gives $24 billion in tax incentives.
Price Action: Apple shares traded 1.2% higher at $150.04 in extended trading after closing 0.05% lower in the regular session.
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Image and article originally from www.benzinga.com. Read the original article here.