Following the news that Apple faces a hit of up to $8 billion in the current quarter from supply chain shortages and factory shutdowns in China;

David Bicknell, Principal Analyst in the Thematic Intelligence team at GlobalData, a leading data and analytics company, offers his view:

“Apple and Intel’s supply chains are heading in different directions, but that doesn’t mean one of them is taking the wrong approach.

“Apple is finding that COVID-19-related lockdowns and restrictions in China can gridlock even its incredibly sophisticated supply chain. Yet, it would be naïve to think that Apple’s China supply chain could somehow be cut-and-pasted elsewhere. Other Asian countries may offer a lower cost base but fundamentally lack China’s infrastructure and skills. Apple is essentially stuck in China.

“In contrast, Intel is following an entirely different plan, where it consistently talks about rebalancing its semiconductor supply chain between the US and Europe. That’s fine for Intel, but not for Apple.”

Mike Orme, Consultant Analyst in the Thematic Intelligence team at GlobalData, a leading data and analytics company, offers his view:

“Panic compounded in Washington, Brussels, and Tokyo as the highly complex (but amazingly successful) multinational global semiconductor supply chain began to unravel dramatically in 2020. In particular, the global chip shortage paralyzed the auto industry, which had relied on a just-in-time chip purchasing model until then.

“What is clear is that rising geopolitical tensions made governments’ almost total reliance on two North Eastern Asian foundries for leading-edge chips look strategically maladroit.

“Intel has up to $40 billion in government support behind it in the US and Europe to achieve what CEO Pat Gelsinger calls the ‘moonshot goal’ of having half the world’s semiconductor manufacturing located in the US and Europe. It’s a five-year story at least, with TSMC and Samsung both embarking on major projects in the US as well.

“Intel itself has major projects underway in Arizona, New Mexico, and Ohio to build new manufacturing plants and has heads of agreement to build plants in both France and Germany. It is also ramping up its operation in Ireland. This is a major expansion in Intel’s manufacturing capacity.

“What is now clear is that Intel has emerged from the rubble of the last two years as the US national chip champion and will get all the support it needs to fulfill that role.”