Apple Plans To Invest $1.19B In German Chip Design Unit

Apple Inc. AAPL is drawing on its enormous cash reserves to invest big in Europe to advance its wireless technological expertise.

What Happened: Apple said Wednesday it will invest over one billion euros ($1.19 billion) to set up a new facility in Munich, Germany to focus on 5G and future wireless technologies.

Munich will become Apple's European silicon design center, where it plans to add hundreds of new employees and construct a new state-of-the-art facility focused on connectivity and wireless technologies, the company said in a statement.

The investment is intended toward the expansion of its existing Munich facility and R&D, and will be made in the next three years. The company has had a base in Munich for about four decades now.

"I couldn't be more excited for everything our Munich engineering teams 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 Apple CEO Tim Cook.

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Apple In Germany: Apple's Bavarian Design Center, which was set up in 2015, currently has over 350 engineers, working on multiple power management unit chips used across its products such as iPhone, iPad, Apple Watch and Mac.

Silicon engineering sites were opened in Nabern in 2019.

The teams in Munich are working on application processor SoCs, as well as analog & mixed signal solutions for iPhones.

The new facility would house Apple's growing cellular unit and it would be Europe's largest R&D site for mobile wireless semiconductors and software, the company said.

The new, 30,000-square-meter facility is located in central Munich's Karlstrasse and will run entirely on 100% renewable energy. Apple said it plans to start moving into the new building in late 2022.

Why It's Important: Apple is now reaping the rewards of a 5G iPhone supercycle, having launched four variants of its 5G iPhones in late 2020. The company is also transitioning away from its longtime chip supplier Intel Corporation INTC to its in-house M1 chips.

The new design center will likely provide a shot in the arm for Apple, as it strives to remain ahead of the competition.

In premarket trading Wednesday, Apple shares were edging 0.20% to $121.33.

The new facility in Munich will be home to Apple’s growing cellular unit, and Europe’s largest R&D site for mobile wireless semiconductors and software. Courtesy photo.