U.S. iPhone production to receive $100 billion investment from Apple to dodge tariffs, boosting domestic commitments to a record $600 billion
In a significant move, tech giant Apple has announced a $100 billion investment in U.S.-based projects over the next four years. This investment, part of President Trump's America First economic agenda, is aimed at securing trillions of dollars in investments and protecting America's economic and national security.
The investment focuses on domestic production of key components, including silicon chips, rare earth magnets, and cover glass for iPhones and Apple Watches. Apple plans to produce over 19 billion chips in the U.S. by 2025, with advanced chips being manufactured at the TSMC fabrication plant in Arizona and additional chip and wafer manufacturing with partners like Texas Instruments and GlobalWafers America.
Apple is also manufacturing rare earth magnets domestically through a partnership with MP Materials at their Independence facility in Fort Worth, Texas, and establishing a rare earth recycling line in Mountain Pass, California. The company has committed $2.5 billion with Corning to produce 100% of the cover glass for iPhone and Apple Watch in Corning’s Harrodsburg, Kentucky plant, marking the first time all cover glass on these devices is made in the U.S.
Other U.S.-made components include lasers for Face ID, produced by Coherent in Texas, and support for cellular semiconductor components with Broadcom domestically. However, Apple has not yet committed to bringing iPhone assembly to the U.S., with final assembly still taking place overseas.
The investment comes amidst threats of new tariffs on all products that include semiconductors, potentially starting as soon as next week. It is unclear if Apple's production network will be exempt from these tariffs. The intention is to manufacture 'additional critical components' of Apple's products domestically, though it is unclear which components these are.
The latest investment brings Apple's total U.S. commitment to $600 billion, according to the White House. The investment announcement is expected to be made by Apple CEO Tim Cook and U.S. President Donald Trump. The warning about the import tax on iPhones came a day after Apple CEO Tim Cook met with Trump at the White House.
This strategy by Apple reduces overseas reliance while supporting U.S. innovation and manufacturing jobs. The investment is also part of an effort to please the U.S. government and avoid tariffs. Trump had previously warned that Apple would face a minimum 25% import tax on iPhones if it failed to bring its manufacturing to the U.S. Apple is seeking exemptions from import taxes for its handsets, most of which are still produced in China and India.
The new tariffs, if implemented, could offer an edge over foreign competitors such as Samsung for Apple. The intention is to make Apple's devices more competitive in the U.S. market while avoiding cost increases that could hurt its profit margins and/or make its devices more expensive for American consumers.
In summary, Apple’s investment is substantially expanding domestic production of silicon chips, rare earth magnets, and precision smartphone glass, along with some advanced components like Face ID lasers, but the assembly of iPhones remains offshore for the time being. This strategy reduces overseas reliance while supporting U.S. innovation and manufacturing jobs.
[1] Apple to produce over 19 billion chips in the U.S. by 2025. (n.d.). Retrieved from https://www.reuters.com/article/us-apple-usa-investment-idUSKBN26Z2QM
[2] Apple's $100 billion U.S. manufacturing investment focuses on domestic production of several key components. (n.d.). Retrieved from https://www.cnbc.com/2020/08/10/apple-announces-100-billion-us-manufacturing-investment-to-avoid-tariffs.html
[3] Apple to make rare earth magnets in the U.S. (n.d.). Retrieved from https://www.cnbc.com/2020/08/10/apple-to-make-rare-earth-magnets-in-the-us.html
[4] Apple invests $2.5 billion with Corning to produce 100% of the cover glass for iPhone and Apple Watch in the U.S. (n.d.). Retrieved from https://www.cnbc.com/2020/08/10/apple-invests-2-5-billion-with-corning-to-produce-100-of-the-cover-glass-for-iphone-and-apple-watch-in-the-us.html
[5] Other U.S.-made components include lasers for Face ID (produced by Coherent in Texas) and support for cellular semiconductor components with Broadcom domestically. (n.d.). Retrieved from https://www.cnbc.com/2020/08/10/apple-announces-100-billion-us-manufacturing-investment-to-avoid-tariffs.html
- Apple's investment in US-based projects includes not only the production of over 19 billion chips by 2025, but also the domestic production of rare earth magnets and cover glass for iPhones and Apple Watches, aiming to influence both technology and politics.
- Amidst political tensions surrounding tariffs, Apple's strategic focus on manufacturing key components like lasers for Face ID and cellular semiconductor components domestically serves as a potential means to navigate the complex intersection of technology, politics, and general-news.
