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Supply Chain Weekly Wrap-Up 05/19/2023-05/25/2023

Date:

Apple with Broadcom partner for US-made 5G technology

Apple has struck a multibillion-dollar deal with Broadcom, a U.S. chipmaker, to collaborate on the development of 5G radio frequency components. The agreement includes the manufacturing of FBAR filters for Apple at various U.S. manufacturing and technology hubs, including Broadcom’s facility in Fort Collins, Colorado. By partnering with Broadcom, Apple aims to support the chipmaker’s investment in automation projects and the upskilling of technicians and engineers.

Apple’s commitment to investing in the U.S. economy, which was announced in 2021 with a pledge of $430 billion over five years, is framed in the context of this deal. The impact on the supply chain is two-fold. First, Apple’s decision to manufacture FBAR filters domestically contributes to the localization of production, enhancing supply chain resilience and reducing dependence on overseas manufacturing. Second, this collaboration creates jobs and fosters technological advancements in the field of 5G.

The deal aligns with the Biden Administration’s push to develop more tech manufacturing in the U.S., particularly in areas like semiconductors. To incentivize domestic semiconductor production, the government has introduced significant incentives through acts such as the CHIPS and Science Act.

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UK announces new semiconductor strategy

The UK government has unveiled a £1 billion semiconductor strategy aimed at strengthening the country’s semiconductor industry and protecting supply chains. The move comes in response to the surge in demand for chips and recent shortages, which have highlighted the UK’s reliance on semiconductor imports. The strategy aims to mitigate the impact of supply shortages and safeguard critical industries like healthcare, infrastructure, and defense.

The circular economy is also seen as playing a role in addressing supply chain challenges. Millions of devices and equipment containing chips are discarded each year, contributing to electronic waste. Leveraging these discarded chips through recycling could help alleviate supply chain burdens during shortages while promoting regenerative design and reducing reliance on finite resources.

Industry experts have responded to the government’s strategy with mixed opinions. While welcoming the focus on sustainable semiconductors and the recognition of UK manufacturing capabilities, concerns have been raised regarding the funding allocation. Further clarity is sought regarding how and when the £1 billion will be applied, and whether the amount spread over ten years will have a significant impact. The effectiveness of the strategy will depend on detailed implementation plans and targeted investments that can truly make a difference in the industry.

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OpenAI CEO makes U-turn on leaving EU over AI law

OpenAI CEO Sam Altman has reversed his earlier threat to leave the European Union (EU) if complying with upcoming AI laws becomes too strenuous. Altman had expressed concerns that the proposed legislation, which would regulate AI and require generative AI companies to disclose copyrighted material used to train their systems, could pose technical challenges for OpenAI. However, after widespread coverage of his comments, Altman clarified that OpenAI has no plans to leave and is excited to continue operating within the EU.

The EU’s AI Act aims to address concerns of copyright infringement and promote transparency and safety in AI systems. Many in the creative industries have accused AI companies of using copyrighted works to train their models. Altman’s initial concerns stemmed from the potential difficulties in complying with the Act’s requirements.

The issue of regulating AI transcends national borders, as discussed during the G7 summit, where leaders agreed on the need for international collaboration to ensure “trustworthy” AI. The European Commission is also seeking to develop an AI pact with Google’s parent company, Alphabet, before the implementation of EU legislation.

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