How Utah figures into Apple's latest investment in US chip making

WASHINGTON — Apple CEO Tim Cook joined President Donald Trump on Wednesday afternoon to announce plans by the U.S. computer and smartphone giant to increase previous commitments to investments in domestic manufacturing facilities by $100 billion.

The increase brings Apple's total U.S. investment package, branded as the American Manufacturing Program, to $600 billion over the next four years.

And an Apple spokeswoman confirmed the program includes "a significant investment in advanced manufacturing in Utah."

During his comments to reporters Wednesday, Trump said Apple will invest in semiconductor manufacturing in Utah, and Cook noted the company is launching new deals with nearly a dozen U.S. companies.

"Today, we're proud to increase our investments across the United States to $600 billion over four years and launch our new American Manufacturing Program," Cook said during the Oval Office announcement. "This includes new and expanded work with 10 companies across America. They produce components that are used in Apple products sold all over the world, and we're grateful to the president for his support."

Apple and Texas Instruments are expanding their partnership to increase future product collaboration and critical U.S. capacity for transforming wafers into chips, according to an Apple press release. The company is committing $500 million to Texas Instruments to support additional tool installations at its facility in Lehi, Utah, and a new facility in Sherman, Texas.

"Apple engineers work closely with suppliers across the United States to create silicon chips that are on the leading edge of innovation," Sabih Khan, Apple's chief operating officer, said in a press statement.

"We're committed to supporting U.S. suppliers involved in every key stage of the chip-making process — from the earliest stages of research and development, to final fabrication and packaging. We want America to lead in this critical industry, and we're expanding our efforts to grow a silicon manufacturing ecosystem that will benefit innovators across America."

Apple said the Utah and Texas facilities are home to TI's most advanced process technologies for making critical semiconductors used for Apple products, including iPhone units shipped in the U.S. and around the world.

"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 to CNN. "Today's announcement with Apple is another win for our manufacturing industry that will simultaneously help re-shore the production of critical components to protect America's economic and national security."

The president has made boosting the manufacturing sector a top priority in his second term and has stated that one of the primary goals of his sweeping changes to tariff fees is to incentivize U.S. companies to bring back or create new domestic facilities.

Currently, about 80% of Apple's products are manufactured in China, including most models of its popular iPhone. The U.S. and China continue to work on a permanent trade deal with an Aug. 12 deadline looming. The U.S. trade levy on Chinese goods swelled briefly to 145% earlier this year amid rising tensions between the world's top trading partners.

Is an American-made iPhone possible?

Earlier this year, Trump said he believed the U.S. had the resources and workforce to support building iPhones domestically but industry analysts have mostly balked at the suggestion.

Shortly after Trump's April 2 "Liberation Day" tariff announcement, Wedbush's Dan Ives told CNBC a U.S.-made iPhone would need to be priced at $3,500. Ives estimates that Apple would need to spend $30 billion over three years to move 10% of its supply chain to the U.S.

Last week, and just a day after announcing a trade deal with the European Union, Trump said the blanket tariff rate on countries that haven't reached their own agreements with the U.S. will fall in the 15% to 20% range.

"For the world, I would say it'll be somewhere in the 15% to 20% range ... I just want to be nice," Trump said, speaking to reporters alongside British Prime Minister Keir Starmer in Scotland. "I would say in the range of 15% to 20%, probably one of those two numbers."

And while the president had previously threatened the EU with a tariff rate as high as 50%, on July 27, he announced a trade deal with the 27-member bloc that set the U.S. import levy at 15%.

Ahead of the Apple investment announcement Wednesday, Trump doubled the tariff rate on India to 50% and said the increase was a result of the country purchasing petroleum from Russia.

"I find that the Government of India is currently directly or indirectly importing Russian Federation oil," Trump said in an executive order. "Accordingly, and as consistent with applicable law, articles of India imported into the customs territory of the United States shall be subject to an additional ad valorem rate of duty of 25 percent."

Related topics