Apple to invest another $100B in U.S. as Trump applies pressure
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Apple plans to up its investment in U.S. manufacturing by $100 billion as the company faces pressure from the White House to boost American production.
Why it matters: President Trump has called for Apple to move iPhone production to the U.S., even as analysts say such a move would result in massive price increases.
- In May, he threatened tariffs of at least 25% on the iPhone if production doesn't move to the U.S.
Driving the news: Apple announced the commitment Wednesday, and shortly after CEO Tim Cook joined Trump at the White House as Trump promoted it.
The plan includes:
- An "American Manufacturing Program," which involves partnering with suppliers such as Applied Materials, Texas Instruments and Samsung to boost U.S. parts sourcing.
- An expansion of the company's partnership with Corning to build smartphone glass at a property in Kentucky, which Apple said would eventually produce cover glass for every iPhone and Apple Watch.
- A deal with Coherent to make semiconductor lasers that enable features such as Face ID at Coherent's plant in Sherman, Texas.
Apple also plans to hire 20,000 workers in the U.S. over the next four years, "the vast majority focused on R&D, silicon engineering, software development, and AI and machine learning." It's not clear how that compares with the company's existing hiring plans.
The big picture: With today's commitment, Apple's U.S. investment plan now totals $600 billion over the next four years. It's existing plan already included:
- AI servers near Houston, a new manufacturing academy in Detroit, a new state-of-the-art campus in California and Apple Silicon production in Phoenix.
- Analysts have noted that some of the investments were likely already in the works.
"Isn't it nice we're doing these things now in the United States instead of other countries — far away countries," Trump said at the press conference in the Oval Office Wednesday.
What they're saying: "Today's announcement is a savvy solution to the President's demand that AAPL manufacture all iPhones in the U.S.," writes Nancy Tengler, CEO of Laffer Tengler Investments.
- "The stock is up on the news likely a relief rally that Cook — who has been largely mute in response to the attacks on the company — is extending an olive branch."
Yes, but: Cook confirmed that the company has no plans to move iPhone assembly to the U.S. "That will be elsewhere for a while," he said.
- Such a move would likely lead to iPhone prices of about $3,500 and would take years to pull off, according to Wedbush Securities analyst Dan Ives.
- "We see no chance that iPhone production starts to happen in the US in the near-term given the upside down cost model and Herculean-like supply chain logistics needed for such an initiative," Ives wrote in a recent research note.
What we're watching: With the added U.S. investment commitment, Apple is likely seeking some sort of tariff relief for its iPhones.
- Tariffs cost the company about $800 million in the June quarter, and are projected to cost about $1.1 billion this quarter.
- Apple has recently been expanding phone manufacturing for the U.S. market in India, as a workaround for the ongoing trade war with China, where it produces the bulk of its devices — a move Trump has criticized.
- On Wednesday Trump doubled tariffs on India to 50%, citing its purchases of Russian oil, as it continues to apply pressure for a trade deal.
This article has been updated with additional information throughout.
