Apple selects the German metropolis of Munich for a big chip laboratory

MUNICH, GERMANY – SEPTEMBER 29: Tim Cook, CEO Apple, during Oktoberfest 2019 in the Kaeferschaenke beer tent.

Gisela Schober | English Select | Getty Images

Apple has announced that it will build a large new chip laboratory in Munich over the next three years as part of an investment of 1 billion euros (1.19 billion US dollars) plus investments in Germany.

Cupertino announced on Wednesday that it would open a new 30,000 square meter facility on Karlstrasse in Munich next year.

Apple said it would make Munich the “European Silicon Design Center” and hire hundreds of new employees in the Bavarian capital.

Apple claimed the new facility will be Europe’s largest research and development location for mobile wireless semiconductors and software, suggesting it will dwarf locations similar to 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 chip shortage has worried governments around the world. Semiconductors are used in almost all electronic devices, from laptops and cell phones to brake sensors in our cars.

The engineers at Apple’s new plant will focus on 5G and future wireless technologies, Apple said, adding that they will also develop modems for Apple products.

Apple employs 4,000 people nationwide and already employs 1,500 engineers in seven offices in Munich. It is possible that some of them will be brought together under one roof when the new building is finished.

According to Apple, the existing engineers in Munich work 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.

“I couldn’t be more excited for everything our Munich engineering teams are about to 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 CEO, in a statement.

“Munich has been Apple’s home for four decades. We are grateful to this community and to Germany that they are part of our journey.”

Apple claims to have spent over 15 billion euros on over 700 companies in Germany in the past five years, including the chip manufacturer Infineon and the battery company Varta.

Nathan Beniach, a venture capitalist who has backed chip startup Graphcore, told CNBC that the new chip lab is a strong move by Apple and he is optimistic.

“I think vertical integration means more control over the supply chain and margins for Apple, but most importantly the flexibility to design exactly what they need for the products they want to build,” he said. “As opposed to having to build with what is available or convincing suppliers to do so.”

Munich is one of the leading technology centers in Europe and is used by other technology giants for research and development. Google employs around 1,000 people in the city. It’s also home to auto giants like BMW and Audi, which have thousands of engineers that Apple may want to hire for its reported Apple auto project.

On Tuesday, the European Union announced plans to be less reliant on technologies traditionally manufactured off-block, such as ramping up chip manufacturing.

Apple isn’t the only one setting up new chip labs in Europe, home to some of the world’s leading universities. Chinese tech giant Huawei received the green light last June to build a £ 1 billion chip research facility in Cambridge, England.

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