Trump pressures Apple to manufacture iPhones in the US; Tim Cook announces $6 billion investment

Amid pressure from Trump to move iPhone production back to the US, Tim Cook announced a massive $600,000 billion investment plan over four years, hoping to show his sincerity in supporting domestic manufacturing.

On August 7, 2568, CNBC news agency reported that US President Donald Trump has made it clear that he wants Apple to manufacture iPhones in the United States. Meanwhile, Apple CEO Tim Cook has been trying to implement policies to appease US leaders without fully committing to their demands.

On Wednesday, Tim Cook appeared at the White House with President Trump to announce a plan to invest approximately $600,000 billion in the United States over four years. While Apple has yet to announce the production of US-made iPhones, as Trump has requested, it is an opportunity for Cook to showcase the company's role in supporting domestic manufacturing.

Tim Cook said some of the iPhone's most valuable components, such as the front glass and facial recognition sensors, are made by US companies with which Apple has long-standing partnerships, while the final assembly process, while crucial, is only a small part of the overall production.

“The final assembly process, which many are interested in, will continue to take place overseas for some time.”

Trump seemed somewhat satisfied with this answer. and said “They produce a lot of their parts domestically, and we've already discussed it. It's been a long-standing issue overseas, both in terms of cost and other factors, but I think we should have incentives for them to move back someday.”

Avoid taxes—and avoid conflict

Analysts say Cook's announcement is a well-designed strategy to keep Apple out of the Trump administration's attacks on tariffs. During a public meeting, Trump announced that the administration planned to impose tariffs on chips that could double their prices, but that Apple, which uses hundreds of different types of chips in its devices, would be exempt from the tariffs.

Peter Cohan, Professor of Strategy and Entrepreneurship at Babson College said “CEOs are starting to realize they need to do something, and they're finding that if they can give the president something to brag about without hurting their own business, the problem might go away for a while.”

Nancy Tengler, CEO of Laffer Tengler Investments, which holds Apple shares. said “What Tim Cook has demonstrated in his first administration is the ability to navigate politically dangerous situations with great skill. This announcement is very symbolic because the president needs headlines.”

Plan Highlights: American Manufacturing Support Program

At the heart of the plan is the American Manufacturing Program, which Apple says will incentivize other companies to manufacture parts in the U.S. Apple will increase orders from domestic manufacturers to strengthen supplier skills and capabilities and build stronger business relationships.

Apple says US manufacturers will produce 19 billion chips for the company this year, a project that requires years of investment and partnerships. For example, Apple has confirmed that all of its iPhone and Apple Watch screen glass will be manufactured by Corning in Kentucky, investing more than $2.5 billion in the project. While the phones will be assembled in China or India, the surfaces users touch will be made in the US.

however Morgan Stanley analysts note that Corning already produces all of Apple's display glass, and its specialty materials business is worth around $2 billion a year, so revenue from this new project likely won't increase significantly.

Apple also mentioned collaborations with Coherent, a Texas-based manufacturer of facial recognition lasers, Texas Instruments, which makes display and USB controller chips, and Samsung, which is co-developing new chip manufacturing technologies.

Apple will also become a major customer of TSMC's Arizona factory, investing in Amkor's chip packaging and testing facilities, and expanding AI data centers in North Carolina, Iowa, Nevada, and Oregon.

Even though the shares of the partner company rose, JPMorgan Warning that “These new projects and expanded partnerships may not significantly increase overall global revenue.”

As Trump responded with satisfaction, stating: “I really like what you did.” He said after reading Apple's pledge.

Regular business expenses or big plans?

While Apple has announced a $600,000 billion investment, no one has been able to verify how much it has actually spent. The company doesn't disclose details of its spending in the US, and most suppliers have non-disclosure obligations.

Apple said in February that the $500,000 billion investment includes payments to U.S. suppliers, direct employment, data centers, Apple TV+ production and other facilities.

The latest announcement increases the investment to $150,000 billion per year, up from $125,000 billion previously announced, and started at around $70,000 billion in 2018, during the first Trump administration.

However, this figure is still far less than Apple's global budget. In fiscal 2567, the company spent more than $275,000 billion globally, including $210,000 billion in cost of goods sold, $57,500 billion in operating expenses, and $9,450 billion in capital expenditures (CapEx).

Tefler said the new spending is unlikely to have a significant impact on Apple's profitability, as it's largely what the company already does.

Dan Ives, Wedbush analyst Which once estimated that iPhones made in the US would cost so much that consumers might have to pay up to $3,500, said

“The map announced on Wednesday shows a different approach. This is the ‘cost of doing business.’”

refer : www.cnbc.com

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