Apple CEO Tim Cook, left center, escorts President Donald Trump as he tours Apple’s Mac Pro manufacturing plant in Austin, Texas, Nov. 20, 2019.
Tom Brenner | Reuters
Apple CEO Tim Cook and President Donald Trump announced on Wednesday announced it will spend an additional $100 billion on U.S. companies and suppliers over the next four years.
The company said its investment would incentivize overseas companies to buy more U.S.-made parts. The commitment is on top of a $500 billion announcement that Apple made in February.
“This is the largest investment Apple has ever made in America and anywhere else,” Trump said. “As you know, Apple has been an investor in other countries a little bit, I won’t say which ones, but a couple, and they’re coming home.”
Trump said that he expected new U.S. factories to be built soon based on his policies.
“There are a lot of factories and a lot of plants that are either under construction or soon we’ll be starting construction,” Trump said. “So can’t tell you exactly when, but I want to be around a year from now.”
Apple said on Wednesday that it had created the so-called American Manufacturing Program that includes Corning, Coherent, GlobalWafers, Applied Materials, Texas Instruments, Samsung, GlobalFoundries, Amkor and Broadcom.
Apple said it would spend $2.5 billion to fund a major expansion with Corning, which makes glass for iPhones in Kentucky. Apple said that all glass for iPhones and Apple Watches will be manufactured in the U.S.
Cook presented Trump with a souvenir based on Corning’s glass.
Apple also said it had a multiyear supply agreement with Coherent to produce lasers for the iPhone’s facial recognition system.
The company said its U.S.-based supply chain would produce more than 19 billion chips for its products this year. That’s including chips made by TSMC in Arizona, Apple said. It also includes U.S.-made wafers from GlobalWafers, and chips from Texas Instruments. Apple said it would collaborate with Texas Instruments to install additional tools in factories in Utah and Texas.
GlobalFoundries, a U.S.-based foundry that manufactures older chips, especially for the U.S. government, said it would manufacture wireless charging technology in New York.
Apple previously said that it would invest $500 million in a rare earths miner and that it would build AI servers factory in Texas.
“Oh, I love that you’re doing this,” Trump said after reading a list of Apple’s announcements.
“President Trump shared some kind words about that work, but he also asked us to think about what more we could commit to doing,” Cook said about its initial $500 billion commitment. “Mr. President, we took that challenge very seriously.”
Not Apple’s first U.S. commitment
Apple has made similar announcements in the past. In 2018, under pressure during the first Trump administration, Apple committed to spend $350 billion in the U.S. over five years, or about $70 billion per year. In 2021, Apple announced plans to spend $430 billion over five years, or $86 billion per year in the U.S. Wednesday’s announcement has the company at $600 billion over four years, or $125 billion per year.
Much of what Apple has announced has come to fruition, although the company doesn’t report its U.S. spending on an annual basis and suppliers generally don’t break out how much revenue comes from Apple.
The company also faces increased tariffs that could hurt its profits. It’s currently paying for tariffs placed on Chinese imports earlier this year, and faces increased import taxes on semiconductors when the Trump Administration finishes a so-called Section 232 investigation.
Apple said in May that the majority of phones it’s selling in the U.S. are assembled in India to avoid Chinese tariffs, and although tariffs on India are going up to 25%, White House sources told CNBC that the iPhone maker will be “largely unaffected” by the India tariffs. Apple said that tariffs could cost the company $1.1 billion in the current quarter.
In 2017, Apple announced that it was creating a $1 billion manufacturing fund, which would go towards future purchase committments with U.S. suppliers. Apple raised that to $10 billion earlier this year. Corning, one of the participants in Wednesday’s announcement, previously got two public commitments from Apple’s manufacturing fund.
In 2021, it said that its U.S. spending was outpacing its initial 2018 announcement. In its initial announcement, it said it would spend $10 billion on data centers in North Carolina, Oregon, Nevada, Arizona, and Iowa. Apple operates data centers in all those states today.
Apple said on Wednesday that it was expanding data centers in North Carolina, Iowa, Nevada, and Oregon.
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