Apple to Invest US$1b in US Manufacturing
May 15, 2017
Apple CEO Tim Cook said that the tech giant is launching a $1 billion fund to invest in advanced manufacturing companies in the United States, announcing its first investment later this month. President Trump called for Apple to move its manufacturing operations to the US, when he said, “We’re going to get Apple to build their damn computers and things in this country instead of in other countries.” But such a drastic upheaval of the global supply chain would only serve to bring low-skill, low-wage, easily automated jobs back to the US, even as it could stifle Apple’s growth. And that, of course, would have a damaging effect on the roughly 2 million jobs Apple already supports in the US, when you account for American suppliers, app developers, retail employees, and the 80,000 people who work on its Cupertino campus. Which is why this $1 billion fund transcends mere marketing. It’s good policy. Advanced manufacturing, which generally describes processes that employ next-generation technologies (think 3-D printing and such) either in the final product or in the production process, has created one million jobs since 2010, even as overall manufacturing employment has been in a two-decade free fall. “People who deny you can do anything with manufacturing jobs aren’t really looking at the evidence,” says Rob Atkinson, an economist and president of the Information Technology and Innovation Foundation, pointing to the opportunities that advanced manufacturing presents. That’s particularly true as everything from refrigerators to automobiles are now becoming internet-connected. “This is a long-term, future play,” Raymond says. “If it’s an investment around advanced manufacturing, integrating technology into products and shop floors, it should be beneficial across the board.”
Even as Apple commits $1 billion to invest in the companies that are creating these jobs, manufacturers may have a tough time finding the high-skilled workers they need to fill them. A recent survey conducted by NAM found that while manufacturers see tremendous opportunity in advanced manufacturing, 40 percent say the skills gap is the chief barrier to taking advantage of that opportunity. “Manufacturing is now digital,” Raymond says. “It is a different set of skills.” That means that even as President Trump pressures Apple and others, Apple’s investment might just pressure President Trump into supporting workforce development programs that help build these skills. Apple could potentially use its investment as leverage in other ways as well. Foxconn Electronics is talking with the US federal government and state governments about investing in the US and is likely to set up a 6G TFT-LCD panel factory there to produce small/medium-size displays for IoT (Internet of Things) applications, including automotive, medical care and mobile terminal... Taiwan's Foxconn, the world's largest contract electronics manufacturer and major Apple Inc. supplier, will begin construction on a U.S. plant in the second half of this year, according to Reuters. When contacted about the matter, Foxconn, declined to comment. Foxconn chairman Terry Gou has said the company was considering investing in the United States In late April, he had meetings at the White House about "capital-intensive" investment plans.
But China's Premier Li Keqiang has called for Foxconn Electronics to place its high-end research and development projects and even its whole industrial chain in China. Li made the remarks during a visit to a Foxconn production hub in Zhengzhou, Henan, on May 9. Foxconn chairman Terry Gou, who just wound up his visit to the White House recently and had talks with the US government over possible investments in the US, greeted and chatted with Li personally. Li reportedly told Gou that the China government will continue to enhance its opening-up policy and optimize its business environment. Li also noted that China is a huge market and has abundant human resources, which makes it one of the best destinations for investment in the manufacturing industry. Li's visit to Foxconn and his remarks on China investment indicate that China hopes to sustain Foxconn's focus on the country, according to industry sources. Japan-based Sharp, of which Foxconn currently holds over a 66% stake, is likely to fulfill the LCD display plant on behalf of Foxconn in the US, according to Chinese-language Commercial Times report. Sharp is ready to dispatch an investigating mission to conduct a face-finding tour to the US, where at least six federal states have offered incentive proposals to solicit Foxconn to make investments in their individual states, said the paper. Sharp is likely to made a decision in September, added the paper. Separately, there were reports that Apple would provide Corning with US$200m to enhance its development of Gorilla Glass for use in iPhones.