Jan 19, 2018

“Apple announces plans to repatriate billions in overseas cash, says it will contribute $350 billion to the US economy over the next 5 years” By Anita Balakrishnan, CNBC Apple on Wednesday made a slew of announcements about its investment in and contribution to the U.S. economy in part because of the new tax law. The headline from Apple is that it will make a $350 billion “contribution” to the U.S. economy. The company also promised to create 20,000 new jobs and open a new campus. It said it expects to pay about $38 billion in taxes for the horde of cash it plans to bring back to the United States. This implies it will repatriate virtually all of its $250 billion in overseas cash. Apple also said it will spend over $30 billion in capital expenditures over the next five years. About $10 billion in capital expenditures will be investments in U.S. data centers, the company said. Apple added that it will spend $5 billion as part of an innovation fund, up from the $1 billion CEO Tim Cook announced last year on CNBC’s “Mad Money.” The job creation will include direct employment and also suppliers and its app business, which it had already planned to grow substantially (app developers earned $26.5 billion in 2017.) The new campus will focus on customer support. Wednesday’s announcement indicates that Apple will still have hundreds of billions of dollars in cash. It could spend that money on buybacks, dividends or acquisitions or moonshot projects. The announcement raises the bar for the world’s most valuable company — now a huge driver of the economy — to continue its dominance and growth in the wake of political pressure on big tech companies. The plan calls for Apple to keep up 2018’s $55 billion “supercycle” spending rate with domestic suppliers and manufacturers. “We have a deep sense of responsibility to give back to our country and the people who help make our success possible,” Cook said in a statement. Apple to create 20,000 jobs over the next 5 years from CNBC. In 2016, then president-elect Donald Trump publicly called out Apple’s reliance on its Chinese supply chain, telling The New York...

Dec 19, 2017

“Apple invests $390 million in TrueDepth component maker Finisar” By Romain Dillet, TechCrunch Apple announced a substantial investment in Finisar. Apple is giving Finisar $390 million to build a new 700,000-square-foot manufacturing plant in Sherman, Texas. Finisar is going to hire 500 people to work on the laser sensor in the TrueDepth camera in the iPhone X. Today’s investment is part of Apple’s commitment to invest $1 billion in U.S.-based companies with its Advanced Manufacturing Fund. Apple says that Finisar is going to work on both research & development and high-volume production of optical communications components. The most complicated components are the vertical-cavity surface-emitting lasers (VCSELs) used in the iPhone X for Face ID, Animoji, Portrait mode and other face-mapping technologies. But Finisar also works on proximity sensors including the ones in the AirPods. And it’s quite easy to understand why Apple is investing in Finisar. There are simply not enough suppliers in this field today. In the fourth quarter of 2017 alone, the company will purchase 10 times more VCSEL wafers than the entire VCSEL production in the world during the fourth quarter of 2016. So Apple needs to foster production. The new facility should be up and running at some point during the second half of...

Jul 27, 2017

By Seth Fiegerman and Julia Horowitz, CNN Tech Foxconn, the Taiwanese manufacturer that makes electronics for Apple and other tech companies, is coming to Wisconsin. The firm will invest $10 billion in Wisconsin to build a new manufacturing plant that produces LCD panels. The project will create 13,000 new jobs and should be completed by 2020, according to Wisconsin Gov. Scott Walker.  Foxconn’s estimate on jobs was more conservative. In a statement, the company said the project will create 3,000 jobs with the “potential” to generate up to 13,000 new jobs. Foxconn announced the investment from the White House. CEO Terry Gou was flanked by Walker, Vice President Mike Pence and House Speaker Paul Ryan. President Trump later joined them. Walker and Ryan thanked Trump for his work on the deal. “One thing we know about this president is how committed he is to reviving American manufacturing and bringing jobs home. This right here shows actual results,” said Ryan, a Republican who represents Wisconsin. Trump called Gou “one of the great businessmen anywhere in the world.” Shortly after President Trump’s inauguration, Gou began teasing plans to invest more than $7 billion in a plant for producing displays, with the potential to create as many as 50,000 jobs. However, Gou has been talking about shifting some manufacturing to the United States for several years, with little to show for it so far. In 2013, for example, Foxconn announced plans to build a $30 million plant in Pennsylvania. It has yet to be built. Foxconn got some generous tax incentives for its Wisconsin venture. The state’s deal for the new plant, which requires legislative approval, includes incentives totaling as much as $3 billion, Walker said. The details of the incentive package would be announced in the coming days, he said. Walker said the investment could transform Wisconsin. “We’ve named it Wiscon Valley,” Walker told reporters at the White House. “It could be very much like Silicon Valley.” Foxconn had considered building the plant in Ohio, Michigan and Pennsylvania, among other states. Foxconn currently has facilities in Virginia and Indiana, each of which employ fewer than 1,000 workers, according to its website. The announcement may give Trump a victory as he looks to bring...

May 4, 2017

By Stephen Nellis, Reuters Apple Inc (AAPL.O) plans to create a $1 billion fund to invest in U.S. companies that perform advanced manufacturing, Chief Executive Officer Tim Cook said on Wednesday, the iPhone maker’s latest effort to show how it is creating U.S. jobs. The Cupertino, California company will announce the fund’s first investment later in May, Cook said during an interview on CNBC. Cook also said Apple plans to fund programs that could include teaching people how to write computer code to create apps, and will release more details about the effort this summer. The announcements were the latest in a series of disclosures to highlight how Apple, the world’s largest company by market valuation, contributes to job creation in the United States. Apple came under fire from President Donald Trump during his campaign because it makes most of its products in China. In February during the company’s annual shareholder meeting, Cook said Apple spent $50 billion in 2016 with its U.S. suppliers, which include firms like 3M Co (MMM.N) and Corning Inc (GLW.N), the first time Apple has disclosed the metric. Cook reiterated that point during the CNBC interview, along with Apple’s claim that it has created 2 million jobs in the United States, 80,000 of which are directly at Apple and the rest coming from suppliers and software developers for the company’s app ecosystem. Apple is highlighting its U.S. presence at the same time lawmakers consider a major tax proposal by Trump that would let Apple, along with other large companies, bring back accumulated profits from overseas at potentially lower tax rates. Ninety-three percent of Apple’s $256.8 billion cash is held overseas. Cook, who met with lawmakers in Washington earlier this year to discuss tax policy and technology issues, said that Apple would have to borrow the cash for its U.S. manufacturing investment fund and said he was hopeful Trump administration would address the repatriation issue. Cook stopped short of saying Apple would bring some of its cash back into the United States if Trump’s tax proposal was enacted. “To invest in the United States, we have to borrow. This doesn’t make sense on a broad basis. So I think the...

Jan 31, 2017

By Steve Minter, IndustryWeek After decades of offshoring, President Trump is making a concerted effort to return manufacturing to the U.S. Could the world’s most valuable company become the poster child for that reshoring tide? “I’m going to get Apple to start making their computers and their iPhones on our land, not in China. How does it help us when they make it in China?” After his victory last March in the Super Tuesday primaries, that was the message from candidate Donald J. Trump, who also had criticized dozens of other companies for moving, or planning to move, production offshore from the United States. While Trump criticized Apple a number of times during the campaign, he took a very different tone at a December 14 meeting with a bevy of Silicon Valley giants, including Apple CEO Tim Cook, Amazon CEO Jeff Bezos and Alphabet’s Larry Page. “I’m here to help you folks do well,” Trump said at the start of the meeting, according to a Bloomberg report. Like it or not, Apple may find itself at the center of a debate concerning the future of American manufacturing. Over the past few decades, many manufacturers have moved jobs from the United States to low-cost countries. In business circles, it has been accepted that this was an inevitable evolution and that the future of the United States lay mainly in the service sector, a transition from low-paying brawn jobs to high-paying brain jobs. While it originally manufactured its computers in the U.S., Apple long ago moved to a system where it designed its products in the United States but used a network of largely Asian manufacturers, in particular Taiwan-based Foxconn, to produce components and assemble its products ranging from the MacBook and the iPad to the ubiquitous iPhone. Both the products and the process have been roaring successes, making Apple the most valuable company in the world. For the past two fiscal years, the Cupertino, Calif., firm has had sales exceeding $200 billion annually and net income of $45 to $53 billion. Moreover, the company is sitting on a cash reserve of more than $237 billion. With a market cap of approximately $640 billion, Apple is much too...