MUNICH, GERMANY – SEPTEMBER 29: Tim Cook, Apple CEO, during the Oktoberfest 2019 at the Kaeferschaenke beer tent.
Gisela Schober | Select German | Getty Images
Apple has announced that it plans to create a major new chip lab in Munich as part of a € 1 billion ($ 1.19 billion) investment plus investment in Germany over the next three years.
The Cupertino firm announced on Wednesday that it will open a new 30,000 square meter facility on Karlstrasse in central Munich later next year.
Apple said it will make Munich its “European Silicon Design Center” and hire hundreds of new employees in the Bavarian capital.
Apple has claimed the new facility will be Europe’s largest research and development site for mobile wireless semiconductors and software, suggesting it will eclipse similar sites like Arm’s in Cambridge and NXP’s in Eidenhoven.
The announcement comes as the world grapples with a chip shortage that has hurt the automotive and other industries. The global shortage of chips is worrying governments around the world. Semiconductors are used in almost all electronic devices, from laptops and cell phones to the brake sensors in our cars.
Engineers in Apple’s new facility will focus on 5G and future wireless technologies, Apple said, adding that they will also develop modems for Apple products.
Apple has 4,000 employees across Germany and already employs 1,500 technicians across seven offices in Munich. It is possible that some of them will be consolidated under one roof when the new construction is completed.
Apple said its existing Munich engineers are working in areas such as power management design, application processors and wireless technologies. Together they have improved performance and efficiency on iPhone, iPad, Apple Watch and Mac with the M1 chip, he added.
“I couldn’t be more excited about everything our engineering teams in Munich will discover – from exploring the new frontiers of 5G technology to a new generation of technologies that bring power, speed and connectivity to the world,” said Tim Cook, Apple’s CEO, in a statement.
“Munich has been home to Apple for four decades, and we are grateful to this community and Germany for participating in our journey.”
Apple claims it has spent more than 15 billion euros in the past five years on more than 700 companies in Germany, including chipmaker Infineon and battery company Varta.
Nathan Beniach, a venture capital investor who has backed chip start-up Graphcore, told CNBC that the new chip lab is a strong move by Apple and that he is optimistic.
“I think vertical integration for Apple means more control over their supply chain and margins, but most importantly, the flexibility to design exactly what they need to power the products they want to build,” he said. “As opposed to having to build with what’s available or convince suppliers to do so.”
Munich is one of Europe’s leading tech hubs and other tech giants use it for R&D – Google employs about 1,000 people in the city. It’s also home to auto giants such as BMW and Audi, which have thousands of engineers Apple may want to hire for the reported Apple auto project.
On Tuesday, the European Union announced plans to reduce reliance on technologies traditionally manufactured outside the bloc, such as ramping up chip production.
Apple is not alone in setting up new chip labs in Europe, home to some of the world’s best universities. Chinese tech giant Huawei got the green light last June to build a £ 1 billion research facility in Cambridge, England.