Examining Apple’s ‘$500bn’ US commitment
Apple has announced spending of $500bn over the next four years to head off tariffs on components and its products coming into the US. However the numbers make as much sense as the $500bn funding for the Stargate datacentre project announced last month.
Apple saw total revenue of $391bn in 2024, with half of that from the iPhone and $100bn from services. The $500bn figure is essentially all its profits for the next four years, so this is not a figure that represents new spending.
The aim is to highlight how much of the supply chain already comes from the US, pointing out that Apple suppliers already manufacture silicon in 24 factories across 12 states.
The Trump administration is suggesting tariffs on silicon imported into the US, starting from April 2nd.
The 24 factories include Texas Instruments in Texas and Utah, Samsung in Texas, TSMC in Arizona, Analog Devices in Oregon and On Semiconductor in Arizona and Colorado. However many of these use packaging plants in Asia.
There is some new spending, with a plant to make servers in Houston, Texas. These servers will be used in its datacentres, particularly in the US. This is not an Apple plant, but a partner. Apple works with Quanta Computer which has server products, as well as server makers Pegatron and Wistron.
“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 Tim Cook, CEO of Apple CEO. “From doubling our Advanced Manufacturing Fund, to building advanced technology in Texas, we’re thrilled to expand our support for American manufacturing. 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 advanced manufacturing facility in Houston will open in 2026 to produce servers that support Apple Intelligence in datacentres in North Carolina, Iowa, Oregon, Arizona, and Nevada.
Apple is reported to be working with Broadcom in its own AI chip for these servers, but that will initially be built by TSMC in Taiwan as its Fab 21 in Arizona comes online and the funding includes the commitment to production at the fab.
This are currently ramping up production of its 4nm process which can be used for the M1 and M2 chips on the N5 and N5P processes. The M3 and M4 chips are built on 3nm which will not be available in the US until 2028.
Apple will also double its US Advanced Manufacturing Fund from $5bn to $10bn to help partners set up local production, create an academy in Michigan to train the next generation of U.S. manufacturers, and grow its research and development investments in the US to support silicon engineering.
One positive element of the announcement is support for the next generation of engineers through the New Silicon Initiative, which prepares students for careers in hardware engineering and silicon chip design.
Last year, this program expanded to students at Georgia Tech, and it now reaches students at eight schools across the country. Apple is continuing to expand the initiative, including a new collaboration with UCLA’s Centre for Education of Microchip Designers (CEMiD) beginning this year.
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