Apple lobbies for lower taxes to boost U.S. chip production

Apple Inc. has been lobbying the U.S. government on tax breaks to support domestic chip production, suggesting the iPhone maker is keen to move more of its supply chain to the U.S.

In second- and third-quarter disclosure reports, the company said it lobbied officials from the Treasury Department, Congress and the White House on tax topics including “issues related to tax credits for domestic semiconductor production.”

Since releasing its first custom processor in 2010, chips have become a major performance differentiator for Apple. The company designs some of these components in-house, but outsources production to Taiwan Semiconductor Manufacturing Co. Many other parts for Apple devices are made in China. That has exposed the company to import tariffs and other risks from a trade war between the U.S. and China. Taiwan, where TSMC operates, has also become an increasing focus of geopolitical tension between China and the U.S.

David Paul Morris/Bloomberg

Apple’s recent lobbying coincides with a push by the company and its partners to move some production away from China and even back to the U.S. in a few cases. There’s also a broader effort by the U.S. semiconductor industry to get government support for increased domestic production.

Apple’s U.S. lobbying efforts are now mostly led by company veteran Tim Powderly, who was promoted around the time Cynthia Hogan, Apple’s prior top U.S. lobbyist, left to join former vice president Joe Biden’s campaign. An Apple spokesman declined to comment.

Earlier this year, TSMC said it would build a $12 billion chip plant in Arizona, and the company has been lobbying officials there for tax breaks.

In 2013, Apple started making a low-volume Mac Pro computer in the U.S. Last year, it started using the same plant in Texas to conduct final assembly for a new version. That decision came after the company was granted breaks on tariffs.

Apple also sources components from several chipmakers that build some of their products in the U.S., including Broadcom Inc. and Texas Instruments Inc. Apple also has started using Qualcomm Inc. again for iPhone modems, and the San Diego, California-based chipmaker builds some products domestically via production partner Global Foundries.

Intel Corp., the current maker of the Mac’s main processors, builds some of its chips in the U.S. However, when Apple moves to its own Mac chips next month, that will mean shifting production of that component to Taiwan.

— With assistance from Ian King and Ben Brody