Apple is set to invest an additional $100 billion into U.S. manufacturing in a bid to avoid punishing tariffs on iPhones, according to Bloomberg. This would raise the company's total U.S. commitment to $600 billion, with the announcement expected to be made by Apple CEO Tim Cook and U.S. President Donald Trump.
The plan features a new initiative aimed at relocating more of Apple’s production network to the United States. The intention reportedly includes efforts to manufacture 'additional critical components' of Apple's products domestically, though it is unclear which components these are.
"President Trump's America First economic agenda has secured trillions of dollars in investments that support American jobs and bolster American businesses," White House spokesperson Taylor Rogers said in a statement published by Bloomberg. "Today's announcement with Apple is another win for our manufacturing industry that will simultaneously help reshore the production of critical components to protect America’s economic and national security."
The biggest intrigue of the announcement is what Apple considers 'critical components.' Some of Apple's processors for mobile devices are already produced by TSMC at its Fab 21 in Arizona, so unless Apple plans to co-invest in additional semiconductor fabrication facilities with TSMC to exclusively make its silicon, the company should be looking at other components.
These may include custom radio frequency modules and 5G modems (yet, Apple already has a multi-year multi-billion deal with Broadcom for this) or advanced packaging and assembly of Apple processors (or rather system-in-packages) for various applications (again, Apple has a deal with Amkor, but the latter still has not started building a fab.
Earlier this year, Apple revealed plans to allocate $500 billion toward U.S.-based projects over the next four years. These include building a server production site in Houston, Texas, launching a training center for suppliers in Michigan, and increasing spending with current American partners. The latest announcement boosts Apple’s total U.S. investment plans to $600 billion, according to the White House.
However, after Apple announced its $500 billion U.S. investment plan, President Trump warned that Apple would face a minimum 25% import tax on iPhones if it failed to bring its manufacturing to the U.S. This warning came a day after he met with Apple CEO Tim Cook at the White House.
Apple has been trying to get exemptions from these punitive tariffs for its handsets, most of which are still produced in China and India. The $100 billion is part of the broader effort to please the U.S. government and avoid tariffs.
During Trump's previous term, Apple successfully secured exemptions from import taxes. Achieving similar treatment again would help the company avoid cost increases that could hurt its profit margins and/or make its devices more expensive in the U.S.. As an added bonus, it could also offer an edge over foreign competitors such as Samsung.
Trump is also preparing to impose new tariffs on all products that include semiconductors, potentially starting as soon as next week. In addition, a set of country-specific trade barriers affecting many of the U.S.' global trade partners is scheduled to begin this Thursday.
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