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Miami Herald
06-08-2025
- Business
- Miami Herald
Apple makes $100 billion genius move to skirt huge problem
Apple CEO Tim Cook has a lot on his plate. Despite having the most loyal fan base of just about any brand on earth, customers have hesitated to upgrade their existing iPhones, putting significant pressure on the company to develop more compelling features. The ongoing trade war with China has made matters even more difficult, as it has put Apple in the crosshairs here and abroad over iPhone manufacturing. Don't miss the move: Subscribe to TheStreet's free daily newsletter Amid the US-China tit-for-tat, Apple has faced restrictions on iPhone use in China for alleged security risks. It has drawn friendly fire in the US from President Trump, who has lambasted the company for making its iPhones overseas rather than in America. Those headwinds are stiff, but perhaps Tim Cook's latest decision to double down on its commitment to the US will take him out of the White House's line of fire. Apple's Tim Cook and President Trump are expected to announce on August 6 that Apple (AAPL) will make a fresh $100 billion investment into its US footprint. The move is a significant addition to the company's previous $500 billion over four-year commitment, announced in February. Related: Apple CEO drops bombshell about its future That commitment included promises for a new server facility in Houston, Texas, a bump in funding for its Advanced Manufacturing Fund, which helps support domestic semiconductor manufacturing, and a Detroit-based manufacturing academy to provide free classes on project management and manufacturing processes. Apple projected its previous deal would create 20,000 new high-tech jobs in research and development, semiconductor engineering, and software engineering. The additional $100 billion is reportedly aimed at bolstering Apple's US supply chain and helping it avoid costly tariffs on components imported from overseas. Apple's reliance on China for iPhone manufacturing has declined since President Trump first placed tariffs on China in 2018. However, Apple continues to manufacture iPhones overseas, including in India. Reportedly, Apple suppliers Foxconn and Tata Electronics airlifted about $2 billion worth of iPhones, roughly 1.5 million devices, from India in March and April to avoid President Trump's newly imposed import taxes. Related: Veteran analyst spots unexpected star in Apple's earnings report Negotiations are underway on a trade deal with India, but currently, tariffs on imports from India total 25%. An additional 25% tariff was signed via executive order on August 6, tied to India importing Russian oil. If unchanged, that tariff will kick in on August 27. Smartphones, computers, and laptops are temporarily exempted, but tariffs are expected. It's not a stretch to think that India's evolving tariff situation may be one reason behind Apple's latest investment. Tariffs on Vietnam are 20%, impacting iPads, Apple Watches, and AirPods, and there is no exemption. "In terms of the country of origin, it's the same as I referenced last quarter. There hasn't been a change to that, which is the vast majority of the iPhone sold in the U.S. or the majority, I should say, have a country of origin of India," said Cook on Apple's June quarter earnings conference call. "The vast majority of the products, other products, the Mac and the iPad and the Watch have a country of origin of Vietnam that are sold in the United States." Undeniably, tariffs have been a major speedbump for Apple, shaving big money off the company's bottom line. "For the June quarter, we incurred approximately $800 million of tariff-related costs," said Cook on Apple's recent earnings conference call, "For the September quarter, assuming the current global tariff rates, policies and applications do not change for the balance of the quarter and no new tariffs are added, we estimate the impact to add about $1.1 billion to our costs." The tariff headache isn't just because it hamstrings money that could go to innovation. It's also a distraction from the company's central problem: the belief that it's falling behind regarding artificial intelligence. Rivals have plowed big money into chatbots like Google's Gemini, Anthropic's Claude, Perplexity, and OpenAI's ChatGPT. Those services are shifting how consumers interact with information, and new AI apps will likely impact how consumers entertain themselves. So far, Apple Intelligence has underwhelmed the largest, prompting calls for Apple to make a splash via M&A. Reports have swirled that Perplexity may be on Apple's radar to accelerate its AI roadmap. If Apple can crack the AI nut, it may finally uncork the long-awaited upgrade cycle. According to TelemetryDeck, the most popular iPhone model is the 13, which was released in 2021, and represents 16% of active iPhones. The iPhone 16 Pro and Pro Max have a combined market share of just 20%. If Apple can launch AI features compelling enough, new sales from upgrades could be worth billions, given Apple generated nearly $45 billion in iPhone revenue in the June quarter. Related: Apple announces major store closing and new opening The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
27-05-2025
- Business
- Yahoo
Apple Is Investing $500 Billion in These States Over the Next 4 Years
Apple is the world's third-largest company, with a market capitalization of around $3 trillion, so it came as no surprise when CEO Tim Cook announced that Apple would spend and invest a significant amount of money in the U.S. over the next four years. It was the amount of that commitment — $500 billion and the creation of 20,000 jobs — that made headlines. Read Next: For You: The February announcement described new projects and expansions for facilities in nine states. These states stand to benefit from Apple's investment: Arizona California Iowa Michigan Nevada North Carolina Oregon Texas Washington Consider This: Apple plans to divide its $500 billion investment among new projects and expansion of existing projects. Apple has selected Houston as the site of a new 250,000-square-foot manufacturing facility that will make energy-efficient servers for Apple Intelligence, the company's personal intelligence system. The servers are also integral to Apple's Private Cloud Compute security architecture, which is powered by AI processing. Although Apple will provide the infrastructure for server production, the servers are manufactured by Foxconn, a Taiwanese electronics company, according to a recent report from The New York Times. The plant will not build Apple's consumer products, which are primarily manufactured overseas. TSMC Fab 21, a fabrication plant in Arizona that already produces silicon for Apple, will see more business as a result of an increase in Apple's U.S. Advanced Manufacturing Fund. The $5 billion fund is doubling in size to $10 billion. Detroit will be home to a new academy Apple plans to build 'to train the next generation of U.S. manufacturers,' according to the statement. In addition to offering training and skills development, the Apple Manufacturing Academy will serve as a resource for companies looking to implement AI and smart manufacturing. Apple operates data centers throughout the U.S. and overseas. Its increased server production will allow the company to continue expanding its data center capacity in Arizona, Iowa, Nevada, North Carolina and Oregon. Seattle is among the sites expected to see some of the 20,000 new jobs Apple plans to create. Axios reported in February that Apple has already doubled the size of its Seattle team over the past three years. Apple is actively preparing students for careers in hardware engineering and silicon chip design through its New Silicon Initiative, which works with eight schools throughout the U.S. As part of its expansion, the program will collaborate with UCLA's Center for Education of Microchip Designers. While the $500 billion spending commitment is Apple's largest, it's not the only major commitment it has made in recent years. In 2018, during President Donald Trump's first term, the company said it would contribute $350 billion to the U.S. economy and create 20,000 jobs in the coming five years. As part of that commitment, Apple created the $5 billion Advanced Manufacturing Fund that the new commitment is expanding. In April 2021, shortly after former President Joe Biden took office, Apple made a similar commitment. In addition to pledging $430 billion in U.S. spending, including for a North Carolina campus the company later put on hold, Apple said it was on target to meet its 2018 hiring goal by 2023 and would add an additional 20,000 jobs by 2026. It's unclear whether Apple has met its 2018 or 2021 hiring and spending goals, or whether the $500 billion commitment consists solely of new U.S. investment. More From GOBankingRates Surprising Items People Are Stocking Up On Before Tariff Pains Hit: Is It Smart? Mark Cuban Tells Americans To Stock Up on Consumables as Trump's Tariffs Hit -- Here's What To Buy This article originally appeared on Apple Is Investing $500 Billion in These States Over the Next 4 Years
Yahoo
30-04-2025
- Business
- Yahoo
President Donald Trump's first 100 days: Companies that will invest $1B or more in the US
President Donald Trump is marking the first 100 days of his second term, highlighting some of the investments companies will make within the United States. Trump promised in December to cut red tape for any company willing to invest $1 billion or more in the U.S. "Any person or company investing ONE BILLION DOLLARS, OR MORE, in the United States of America, will receive fully expedited approvals and permits, including, but in no way limited to, all Environmental approvals," Trump wrote on his social media platform, Truth Social. "GET READY TO ROCK!!!" These Companies Have Announced Their Intention To Increase Us Manufacturing Amid Trump's First 100 Days The following companies, and others, have made such commitments since Trump returned to office in January: In February, the tech giant announced that it would spend more than $500 billion in the U.S. over the next four years. The investments include a new plant in Texas, an educational manufacturing academy and investments in AI and silicon engineering. "We are bullish on the future of American innovation, and we're proud to build on our long-standing U.S. investments with this $500 billion commitment to our country's future," said Apple CEO Tim Cook. "From doubling our Advanced Manufacturing Fund to building advanced technology in Texas, we're thrilled to expand our support for American manufacturing." The semiconductor company, which had a market capitalization of $179 billion in April 2020, now boasts a market cap of more than $2.6 trillion, thanks primarily to the explosive growth of AI technology. On April 14, the company announced that it will spend $500 billion on infrastructure, including a manufacturing facility that will build AI supercomputers in the U.S. for the first time. "The engines of the world's AI infrastructure are being built in the United States for the first time," said Nvidia CEO Jensen Huang. "Adding American manufacturing helps us better meet the incredible and growing demand for AI chips and supercomputers, strengthens our supply chain, and boosts our resiliency." Read On The Fox Business App Trump Sees 'Manufacturing Boom' In First Full Jobs Report Of Second Term The South Korean-based automaker announced in March a $21 billion investment in the U.S. between 2025 and 2028. It includes: $9 billion to expand U.S. automobile production to 1.2 million units annually $6 billion to enhance parts, logistics and steel business, increase the localization of auto parts and strengthen supply chains $6 billion to expand future industries and strengthen external partnerships and energy infrastructure, including EV charging According to the company, "investment is expected to create more than 100,000 direct and indirect job opportunities by 2028, including 14,000 direct full-time jobs." When announcing the opening of a new 225,000-square-foot manufacturing facility in Durham, North Carolina, the pharmaceutical manufacturer also said it would invest an additional $8 billion by 2028. Treasury Secretary Bessent: 'I'm Not Worried About Inflation' From Tariffs "Expanding our state-of-the-art manufacturing facility in Durham marks a significant milestone in our efforts to strengthen our production and manufacturing capabilities in the U.S.," said Sanat Chattopadhyay, executive vice president and president, Merck Manufacturing Division. "The cutting-edge technologies employed here empower our workforce and underscore our leadership in innovation to support patients everywhere." Other companies committed to investing $1 billion or more include Taiwan Semiconductor Manufacturing Company (TSMC), Johnson & Johnson, Eli Lilly, Novartis, Stellantis and Chobani. Click Here To Read More On Fox Business Original article source: President Donald Trump's first 100 days: Companies that will invest $1B or more in the US Sign in to access your portfolio
Yahoo
04-04-2025
- Business
- Yahoo
Companies Test Apple's Playbook To Dodge Trump's New Tariff Regime
Its "liberation day," the day Donald Trump has set to announce his reciprocal tariff plan on countries that levy duties on our exports and prolific import taxes on goods the Trump administration deems crucial to national security. Businesses are scrambling. Since Softbanks early $100 billion investment announcement on Dec. 16, numerous other companies have followed, totaling $2.8 trillion in business projects and pledges in America. The most recent announcement was from Hyundai - on March 24, the Japanese automaker pledged $21 billion to the United States, including a $5.8 billion steel plant in Louisiana. While these ventures are encouraging, its uncertain whether these companies are truly interested in bringing back Americas manufacturing base or simply eager to stroke the administrations ego and maintain the status quo: cheap foreign labor to maximize profit margins. These investments may be a form of lobbying to defend against Trumps tariff blitz - similar to the millions of dollars tech companies and their CEOs donated to the presidents inauguration fund. Either way, companies will find out what the future holds when Trump announces his reciprocal tariff regime this afternoon. Tariffs give the federal government significant leverage in economic proceedings, and a firms goal is to protect its bottom line by delaying or exempting goods that will be affected by Trumps new global trade order. But are significant investments an effective playbook for transnational organizations? Apple is an interesting case study as it successfully parried several tariffs during Trumps first term. Apple announced a $350 billion "contribution" to the American economy in January 2018. The company promised to create 20,000 jobs, spend $30 billion on new facilities, data centers, and offices, and invest $5 billion in its Advanced Manufacturing Fund. Apple also brought $245 billion in overseas profit back to the U.S. and paid $38 billion in taxes as part of the repatriation. Did Apples contribution translate into new jobs? The short answer is "yes." Apples U.S. workforce grew by about 17,000 from 2018 to 2022. As for its Advanced Manufacturing Fund, Apple awarded $450 million to display glass supplier Corning from 2017 to 2021. Apple also gifted II-VI, an optical technology manufacturer headquartered in Saxonburg, Pennsylvania, $410 million in 2021 to expand its manufacturing capacity. Apple avoided tariffs on its flagship product, the iPhone, for its efforts. In December 2019, Trump halted a 15% levy on China - the initially proposed "List 4B" tariffs would have affected the iPhone, iPad, and MacBook. Apple did not avoid all tariffs from the administration, however. The U.S. Trade Representative (USTR) did not grant relief for all of Apples requested components. Not all companies fulfilled their investment promises. General Motors announced spending $1 billion to create or keep 1,500 manufacturing jobs in 2017. Yet, its U.S. workforce shrank during Trumps first term due to layoffs. In May 2019, the USTR denied GMs exemption request for the Chinese-made Buick Envision SUV for national security purposes. Other companies, like Toyota, made investments and used them in a PR battle against the administration. In January 2017, Toyota announced a five-year plan to invest $10 billion and two years later, increased its investment commitment to $13 billion by 2021. When Trump launched an investigation into the national security threat of Chinese car parts in 2018, Toyota nodded at its investments, stating it "operates 10 manufacturing plants in the U.S." and is "an exemplar of Americas manufacturing might." Trump later declared that certain auto imports posed a national security threat in 2019. The company suggested that the presidents actions sent "a message to Toyota that our investments are not welcomed, and the contributions from each of our employees across America are not valued." The second Trump administration is more bullish on tariffs than it was before. Howard Lutnick, Trumps Secretary of Commerce, called for the restructuring of global trade because we no longer need to aid countries devastated by World War II and the Korean and Vietnam Wars. Lutnick believes the Trump administration will cut the federal deficit through increased tariff revenue. But how does that square with the tariff-fueled spoils system we saw during Trumps first term? And if Trump launches reciprocal tariffs, shouldnt he eventually lower them when our trading partners lower theirs? If this is the case, its unclear how the U.S. would gain enough revenue to reduce the federal deficit and bring back manufacturing jobs. Companies arent waiting to find out. TSMC, Hyundai, Nvidia, and others seem to be imitating Apples campaign to minimize the financial impact of tariffs. These investments may translate into more American jobs, as Apples $350 billion contribution did, but will these companies get the tariff reprieve they crave? Apples playbook may have expired, but we wont know until Trump details his new administrations tariff policy on "liberation day." Daniel Idfresne is a junior at Syracuse University. He's a Young Voices Social Mobility Fellow and interned for 'The Story with Martha MacCallum.' He has written for the New York Post, Newsweek, and The Free Press. Follow him at @danielidfresne
Axios
24-02-2025
- Business
- Axios
Trump manufacturing win: Apple to spend $500 billion in U.S., hire 20,000
Apple on Monday morning announced plans to invest more than $500 billion in the U.S. and hire 20,000 people over the next four years, with expansion and construction planned from coast to coast. The new jobs will focus on research and development, silicon engineering, software development, and AI and machine learning. Apple plans to greatly expand chip and server manufacturing in the U.S., plus skills development for students and workers across the country. Why it matters: Apple's announcement — which the company calls its "largest-ever spend commitment" — is precisely the kind of win President Trump has been looking for with his push to move manufacturing back to the U.S. Apple's new investment — much of it in red states — lets Trump say to other companies: Apple can do it. Why can't (or won't) you? Apple CEO Tim Cook said in the announcement: "We are bullish on the future of American innovation, and we're proud to build on our longstanding U.S. investments with this $500 billion commitment to our country's future." "From doubling our Advanced Manufacturing Fund [from $5 billion to $10 billion], to building advanced technology in Texas, we're thrilled to expand our support for American manufacturing," Cook added. "And we'll keep working with people and companies across this country to help write an extraordinary new chapter in the history of American innovation." The backstory: Trump met with Cook on Thursday in the Oval Office. Then Trump got so excited that he revealed the plans prematurely, saying on-camera while meeting with governors that Cook is "investing hundreds of billions of dollars. I hope he's announced it — I hope I didn't announce it, but what the hell? All I do is tell the truth — that's what he told me. Now he has to do it, right?" "He is investing hundreds of billions of dollars and others, too," Trump continued. "We will have a lot of chipmakers coming in, a lot of automakers coming in. They stopped two plants in Mexico that were ... starting construction. They just stopped them — they're going to build them here instead, because they don't want to pay the tariffs. Tariffs are amazing." The big picture: Apple says it now supports nearly 3 million jobs across the U.S. through direct employment, work with suppliers and manufacturers, and developer jobs in the iOS app economy. Apple already works with thousands of suppliers across all 50 states, including 24 factories in 12 states. Apple's U.S. Advanced Manufacturing Fund has supported projects in 13 states, helping build local businesses and train workers. Reality check: Apple made a similar announcement four years ago. In 2021, Apple committed $430 billion in U.S. investments and 20,000 new jobs across the country over five years — including a new campus in Research Triangle Park, North Carolina, where development was paused last year. Apple says it has worked with North Carolina Gov. Josh Stein (D) and the North Carolina Department of Commerce to extend the project's timeline. Apple says it continues to grow its teams in the Tar Heel State — both at corporate offices in Raleigh and at a data center in Catawba, where the company has exceeded planned investments. Zoom in: Here's a rundown of Apple's new expansion plans: Texas: New advanced AI server manufacturing factory near Houston. The 250,000-square-foot server manufacturing facility, slated to open in 2026, "will create thousands of jobs," Apple's announcement says. "Previously manufactured outside the U.S., the servers that will soon be assembled in Houston play a key role in powering Apple Intelligence, and are the foundation of Private Cloud Compute, which combines powerful AI processing with the most advanced security architecture ever deployed at scale for AI cloud computing. The servers bring together years of R&D by Apple engineers." Michigan: New Apple Manufacturing Academy in Detroit. "Apple engineers, along with experts from top universities such as Michigan State, will consult with small- and medium-sized businesses on implementing AI and smart manufacturing techniques," the announcement says. "The academy will also offer free in-person and online courses, with a skills development curriculum that teaches workers vital skills like project management and manufacturing process optimization." California: Construction of a state-of-the-art campus is underway in Culver City, an entertainment enclave in L.A. County. In San Diego, a 4,000-member team will continue to grow. Arizona: Apple-designed Apple Silicon will be produced at TSMC's Fab 21 semiconductor plant in Phoenix. Washington state: Apple has doubled the number of team members in Seattle over the past three years to 2,400+, and will keep growing. Operations will expand in Mesa, Arizona ... Reno, Nevada ... Prineville, Oregon ... and Maiden, North Carolina (outside Charlotte). Go deeper: Apple announcement.
