US: On Monday (Feb 24), Apple announced it will be investing US$500 billion (S$669.44 billion) in the United States over the next four years, which includes building an artificial intelligence (AI) server factory in Texas and creating 20,000 research and development jobs. It will also cover purchases from US suppliers and the production of television shows and movies for Apple TV+, Reuters reported.
However, it did not specify how much of this spending was already planned, including payments to suppliers like Corning, which produces iPhone glass in Kentucky.
The announcement followed reports that Apple CEO Tim Cook recently met with former US President Donald Trump.
Many Apple products assembled in China could face a 10 per cent tariff imposed by US President Trump this month, although the company previously secured some tariff waivers during his first term.
D.A. Davidson Analyst Gil Luria noted that the pledge represents a political gesture towards the Trump administration. He said Apple has already committed to spending over US$150 billion per year in the US, including the cost of goods sold and capital expenditure. He suggested that, even without much spending growth, the company could meet its obligation within three to four years.
In 2018, during US President Trump’s first administration, the company announced a similar five-year plan to invest US$350 billion into the US economy.
While most Apple products are assembled in China, some key components, including chips from Broadcom, Skyworks Solutions, and Qorvo, are made in the US. The company has also started producing its own chips at Taiwan Semiconductor Manufacturing Co.’s (TSMC) factory in Arizona.
Apple said it will collaborate with Hon Hai Precision Industry, also known as Foxconn, to build a 250,000-square-foot (23,226 sq m) facility in Houston to assemble AI servers. These servers, which power Apple’s AI features, are currently produced outside the US.
Apple added it plans to double its Advanced Manufacturing Fund from US$5 billion to US$10 billion, with a portion dedicated to advanced silicon production at TSMC’s Arizona factory, although it did not disclose details of its deal with TSMC.
Apple has previously used this fund to help suppliers expand operations to meet its production needs.
In addition, Apple plans to launch a manufacturing academy in Michigan, where its engineers and local university staff will offer free courses to small and mid-sized manufacturers in areas like project management and process optimisation. /TISG
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