Tech giant Apple is set for a major expansion with Corning Inc. in Kentucky with a $2.5 billion deal to manufacture iPhone and Apple Watch cover glass. This marks the first time that 100 per cent of the cover glass on these Apple devices will be manufactured in the US. Corning’s manufacturing facility in Kentucky will be at the centre of this development, increasing the manufacturing workforce by at least 50% as per Apple.
This marks Apple’s manufacturing debut in the US, as Trump announced a 100% tariff on raw materials like computer chips and semiconductors. The Harrodsburg facility in Kentucky will be entirely dedicated to Apple, with an Innovation Centre coming up at the facility.
Apple investment in the US
After facing sharp criticism from Donald Trump, Apple increased its “US commitment” by $600 billion as it announced the ‘American Manufacturing Program’. This will not only encourage US-based production but also satisfy Trump’s condition of domestic production, exempting Apple from the steep tariffs.
Previously, Apple had pledged to invest $500 billion in the US and added $39 billion separately. With CEO Tim Cook‘s public commitment to Trump, the total investment has reached $600 billion.
Cumulatively, this includes a new server manufacturing facility in Houston, a supplier academy in Michigan, above the newly signed deal with Corning’s Kentucky facility. The Manufacturing Program also includes other firms like Coherent, GlobalWafers, and Applied Materials. Texas Instruments, GlobalFoundries, Amkor, Broadcom, and even Samsung.
Trump’s response
After Tim Cook announced the additional $100 million investment at a press conference, Trump remarked that “they’re coming home.” The President noted that this the largest investment the tech giant had ever made in the US as well as other countries, whose names remained undisclosed.
Does it affect iPhone pricing in India?
Reports suggest that domestic manufacturing for Apple will reduce the burden on tariffs on the company and might prove to be a good thing for Indian customers. However, as the clash between New Delhi and Washington deepens, additional sanctions of the 25% tariffs is set to be announced. This comes as a penalty for India’s deal with Russia for energy resources, apart from then 25% import tax which was announced earlier this month. The US is set to implement similar conditions for China, the manufacturer of Apple products for the larger part of the century.
A key customer base for Apple, the 50% tariffs on India might have a detrimental effect on sales.
