By Rolfe Winkler | Photographs by Christopher Payne for WSJ

Semiconductors are the foundational technology of the digital economy, found in everything from smartphones to cars to missile systems. They were invented in the U.S., and most are still designed here. But today they are largely made on the other side of the world.

And that is a problem, as a raft of chip shortages made clear during the Covid era. Even if another pandemic isn't around the corner, it is risky for the U.S. to depend on other nations for chips. Especially Taiwan, which China has threatened to take over, and which is also vulnerable to major earthquakes.

The U.S. government under two presidents has applied pressure and offered incentives to reshore chip-making. They have looked to companies such as Apple -- which don't themselves make chips, but which nevertheless design the most sophisticated ones -- and have leverage to bring at least some of chip-making back home.

Apple took me on a tour of partner facilities to see the rebirth of the chip supply chain in the U.S. The nascent effort is decades behind Asia, but it is a start.

The start of the supply chain is GlobalWafers America, in Sherman, Texas. It takes purified silicon rocks, a good source of which is sand in North Carolina, and fashions them into the 12-inch wafers that will later be imprinted with trillions of transistors to become chips.

The rocks are melted down at 2,500 degrees Fahrenheit to form perfect silicon "crystals" inside a 35-foot-tall machine called a crystal puller. The machines essentially grow silicon crystals into cylindrical ingots that weigh hundreds of pounds.

The ingots are cut into wafers with a wire saw, which move through multiple machines to be polished, tested and boxed up so they can be sent to the next stage of the supply chain.

One of the most fascinating things inside chip fabrication plants, or fabs, is the intricate overhead transportation system that carries wafers from machine to machine. Wafers travel in special pods that are carried on a track system similar to the New York City subway, with local and express lines, station stops and a sophisticated dispatch system.

GlobalWafers has such a system, though the really intricate ones are inside the much more massive fabs like one in Arizona being developed by Taiwan Semiconductor Manufacturing, or TSMC. Those fabs collectively transport wafers a distance equivalent to 40 revolutions around the earth every day.

The next stage is a chip foundry like TSMC's. This is where wafers are patterned with trillions of transistors inside machines that are so sophisticated they perform multiple tasks that test the boundaries of physics. It is no wonder such machines cost as much as $400 million each.

Extreme ultraviolet lithography machines, as they are known, shoot lasers into molten tin to create EUV light, which doesn't exist naturally on earth. It bounces that light off mirrors so smooth, that if you scaled them up to the size of the U.S. their largest bump wouldn't be much thicker than a human hair. In the middle, light bounces off something like a stencil patterned with the chip's billions of transistors. The light paints hundreds of chips onto wafers flying around at more than 20 times the force of gravity.

TSMC built a chip fab in the Arizona desert. Another is scheduled to open next year and a third by 2030. It has planned three others for later, along with two "advanced packaging" facilities, where wafers are cut into individual chips and plugged into connectors that will enable them to function in devices. In total, it has acquired around 2,000 acres of land for a project that it says will cost $165 billion. As big as that is, it pales next to what the company has built in Taiwan, including four facilities that make more than 100,000 wafers a month. TSMC Arizona may not match that volume for a decade or more.

TSMC's Arizona plant makes Apple's A16 chips, the logic chips that power the iPhone 15 and the entry-level iPad. The iPhone 17's A19 chip uses more advanced technology that is only available in Taiwan. Nvidia's Blackwell AI chips are made at TSMC Arizona as well. Chips must be shipped off to Asia for the packaging step.

Apple helped TSMC develop into the global chip leader, giving the company valuable customer commitments it needs to build new factories, which have primarily been in Taiwan. American chip makers such as Intel need those commitments to expand their manufacturing domestically.

I didn't see a lot of workers in these facilities. Chip-making is highly automated. The U.S. isn't trying to reshore the industry because it will drive mass employment. It is doing so to address a strategic vulnerability, and that requires operating competitively.

The last stage of the supply chain is device assembly. Apple has a modest operation assembling about 10 AI servers an hour at a Foxconn facility in Houston. Apple is adding more manufacturing at the site, planning to turn an empty warehouse there into an assembly line to make Mac Mini desktop computers. That is also a niche product for Apple compared with iPhones.

The acronym for this stage of the supply chain is FATP, short for final assembly, test and pack. Workers put components together, test devices to make sure everything works and pack them up for shipment.

Final assembly is the more labor-intensive part of Apple's supply chain. The assembly lines in Houston employ hundreds of people and are tiny relative to those in Asia, where facilities may have hundreds of thousands of people making iPhones.

Write to Rolfe Winkler at Rolfe.Winkler@wsj.com

(END) Dow Jones Newswires

February 25, 2026 12:00 ET (17:00 GMT)

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