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Enterprise Hardware

Apple, Focusing on U.S., Sets Up Plant in Arizona

Apple, Focusing on U.S., Sets Up Plant in Arizona
November 5, 2013 2:34PM

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The Arizona facility purchase is being made by Apple to house manufacturing for one of Apple's suppliers, GT Advanced Technologies Inc. Apple is purchasing the building and will then lease it to GT. Apple has not said what the plant will make, but the New Hampshire-based GT said it would be manufacturing sapphire glass for Apple next year.

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As part of its announced effort to bring back to the U.S. some of its manufacturing jobs, Apple said Monday that it would open a plant in Arizona. The facility, located in Mesa, is expected to employ at least 700 people, with possibly more jobs added later.

Additionally, about 1,300 construction and associated jobs will be created. Apple will purchase a currently vacant plant in east Mesa that had housed First Solar Inc., which has had to reduce its manufacturing plans because of a global oversupply of solar panels.

The purchase is being made to house manufacturing for one of Apple's suppliers, GT Advanced Technologies Inc. Apple is purchasing the building and will then lease it to GT. Two years ago, Apple had researched facilities in the Phoenix area, but ended up setting up a larger facility in Austin, Texas, spending an estimated $280 million on a 39-acre campus. Neither the Mesa or Arizona governments, nor Apple, have yet disclosed any tax or other incentives that were granted to lure the company to Mesa.

Sapphire Glass

Apple has not said what the plant will make, but the New Hampshire-based GT Advanced Technologies announced Monday that it would be manufacturing sapphire glass for Apple at an Arizona plant, beginning next year. That kind of glass is used by the technology giant to cover the fingerprint sensors and camera lenses in its iPhone 5S.

GT usually sells equipment for the production of sapphire glass, but the company has said that making the sapphire glass for Apple is a steadier business. Reportedly, GT has lost about $45 million so far in 2013. Apple's arrangement is a prepayment of $578 million for the sapphire glass, which GT will begin repaying in 2020 either as a credit for Apple's purchase of its products, or as cash.

While Apple currently has some manufacturing in its home country, the assembly of its products is mostly done in facilities in Asia.

'Assembled in the U.S.'

But there are indications the company is beginning to place more of an emphasis on American manufacturing, such as in the soon-on-sale Mac Pro, which touts that it was "assembled in the U.S." At the new Mac Pro's launch in October, Apple revealed it is building those computers in the U.S.

Developing more of a manufacturing base in the U.S. not only allows the company to tout its patriotic sensibilities, but to better develop facilities and a manufacturing workforce that are nearer to its headquarters, in the event that political, economic or environmental events suddenly made foreign manufacturing more difficult.

Some Apple-watchers have speculated that the placement of the facility in Arizona makes it likely the sapphire glass will be sent to Juarez, Mexico, where a large factory managed by Apple supplier Foxconn Technology Group could sub-assemble it, or even integrate it into products.

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