Apple To Invest $500 Billion in US: Story in 5 Points

Apple has announced it has earmarked $500 billion as an investment in the US, spanning over the next four years to build a quarter-million-square-foot factory in Texas by 2026, create original programmes for its Apple TV+ service, and expand its existing supply base. The announcement comes days after CEO Tim Cook reportedly met US President Donald Trump, who has threatened a 10 per cent tariff on products imported from China and other markets.

Here is how the story has unfolded and how it will impact Apple’s business in the US:

— An investment of $500 billion will be disbursed over the period of four years. It includes all of Apple’s commitments, such as purchases made from suppliers in the US to the cost of filming Apple TV+ movies and television shows. However, Apple has not said how much of the figure it plans to inject into its already-running supply base in the US, which includes investments in companies like Corning, the makers of toughened glasses for iPhones.

— Since the announcement comes close on the heels of Cook’s meeting with Trump, it could be part of Apple’s efforts to allay the concerns about imports of components for the iPhone, which could potentially attract up to 10 per cent tariffs under the new mandate. Apple manufactures iPhones and other products outside of the US, with China leading the efforts followed by India and Vietnam. However, some of its components such as chips from Broadcom, SkyWorks Solutions, and Qorovo are sourced from factories in the US. Analysts say the $500 billion investment could boost confidence in Apple’s local manufacturing ecosystem.

— Apple will build a facility with an area of about 250,000 square feet in Houston, Texas in partnership with Foxconn — the company’s biggest supplier for iPhones. This facility will be used to assemble servers that would power data centres for Apple Intelligence — the company’s AI services launched last year as a response to growing demand for generative AI applications and competition from rivals such as Google and Samsung.

— The Cook-led company also said it plans to broaden its Advanced Manufacturing Fund from $5 billion to $10 billion, including a chunk that will go towards the “multibillion-dollar commitment” for the production of Apple Silicon at TSMC’s factory in Arizona. However, Apple has not revealed the details of the deal with TSMC.

— Apple has also committed to building a manufacturing academy in Michigan where its engineers and local university staff will offer free courses on project management and manufacturing processes to small and medium manufacturing firms. This could help Apple add about 20,000 jobs in research and development across the US.

The $500 billion investment, however, may have little impact on its supply chains outside of the US. Apple’s expanded iPhone manufacturing base in India has allowed the company to escape scrutiny on its operations in China amid geopolitical tensions between Washington and Beijing. Apple has previously managed to secure waivers from China tariffs during the Trump administration, making it more likely for the company to continue its operations in China and India without substantial impact.