News Apple says it will spend $500 billion in US over next four years as it faces down President Trump's tariffs

[Admin]

Apple announced $500 billion in US spending over the next four years as it faces town tariff threats.

Apple says it will spend $500 billion in US over next four years as it faces down President Trump's tariffs : Read more

 

[TechieTwo]

Nice to see some jobs coming back to the U.S. after so many companies exported them to China for increased CEO compensation.

 

[bit_user]

In 2021, Apple announced more U.S.-based spending plans, including a $430 billion investment in a North Carolina campus

$430B in a single campus??? That has to be a mistake, or else were they going to like coat everything in gold and platinum?

 

[sygreenblum]

$430B in a single campus??? That has to be a mistake, or else were they going to like coat everything in gold and platinum?

It says including the campus, R&D and training, among other things. Apple already spends $30 billion just on R&D, so over 4 years that would $120 billion right there. If they increase spending then obviously that number will be higher.

 

[techskier]

Nice to see some jobs coming back to the U.S. after so many companies exported them to China for increased CEO compensation.

Now it will only take about a thousand companies to do the same before the desired outcome of tariffs will happen.

 

[helper800]

Now it will only take about a thousand companies to do the same before the desired outcome of tariffs will happen.

Tariffs or not, all consumers will be getting higher prices either due to tariffs or the increased cost of doing business in the US.

Nice to see some jobs coming back to the U.S.

20k extra jobs in the US at the cost of 339,980,000 Americans having to spend 10%+ more on apple products.

so many companies exported them to China for increased CEO compensation.

Do you have some data on this point? My understanding was that most companies exported their manufacturing jobs overseas because if they didn't they would go out of business, not that they needed more CEO compensation.

 

[drtweak]

It does say it is for Apple Servers though, nothing about iPhone, iMacs, Macbooks. So doesn't look like it will help the basic consumer unless they move production to those once it opens.

Honestly didn't even know Apple still made servers.

 

[bit_user]

Honestly didn't even know Apple still made servers.

It's an area of recent expansion.

Apple reportedly developing AI server chip with Broadcom | TechCrunch

Apple is working with semiconductor company Broadcom on its first server chip designed to handle AI applications, according to The Information, which

techcrunch.com

 

[bit_user]

Nice to see some jobs coming back to the U.S. after so many companies exported them to China ...

The article mentions manufacturing moving from Mexico. What's interesting about building a plant in Texas is that it could be partially staffed by the same workers, as I believe large numbers of commuters cross the southern border, on a daily basis, who live in Mexico but work in the US. I'm not sure what kind of visa or work authorization that requires.

 

[why_wolf]

It does say it is for Apple Servers though, nothing about iPhone, iMacs, Macbooks. So doesn't look like it will help the basic consumer unless they move production to those once it opens.

Honestly didn't even know Apple still made servers.

All the big tech companies make their own custom servers. Facebook does, Google does, Microsoft does, Amazon does. Its for their own internal consumption, not something they will ever sell to other companies.

This is really Apple announcing they aren't going to buying Nvidia GPUs to run their AI server farms. Not really a surprise Apple does everything it can to not pay the giant margins for other peoples tech.

 

[bit_user]

All the big tech companies make their own custom servers. Facebook does, Google does, Microsoft does, Amazon does. Its for their own internal consumption, not something they will ever sell to other companies.

Technically, I think those are built-to-order, from contract manufacturers. I'm pretty sure none of them have their own factories for this. For instance, the article mentioned Foxconn.

FWIW, Google, Meta, and Microsoft are all Platinum members of OCP:

https://www.opencompute.org/membership/membership-directory#platinum
​

Amazon is listed only as a "Community" member, which appears to be the lowest tier.

This is really Apple announcing they aren't going to buying Nvidia GPUs to run their AI server farms. Not really a surprise Apple does everything it can to not pay the giant margins for other peoples tech.

Yeah, in terms of margins and supply constraints, I'm sure Apple doesn't appreciate having to deal with Nvidia. However, in general, I suspect a big factor is that Apple just wants to live in its own ecosystem, running its own OS and software, and optimizing its code for its own hardware.

 

[alrighty_then]

Great, I would love to buy more 'made in America' products.

 

[urdrwho10]

Apple announced $500 billion in US spending over the next four years as it faces town tariff threats.

Apple says it will spend $500 billion in US over next four years as it faces down Trump tariffs : Read more

Guess I'll believe it when I see it. Seems to be an ongoing promise / theme.

April 2021 – Apple Commits $430 Billion to the U.S. Economy​

Apple announces its plans to invest $430 billion and create 20,000 new jobs across the U.S. over five years, supporting American innovation and driving economic benefits in every state.

 

[Wimpers]

Nice to see some jobs coming back to the U.S. after so many companies exported them to China for increased CEO compensation.

Eh, I think you're forgetting a little something called shareholders and the board of directors that consists of those greedy corporate heartless asshats.

 

[TheSecondPower]

20k extra jobs in the US at the cost of 339,980,000 Americans having to spend 10%+ more on apple products.

I don't buy Apple products, and I know other Americans who don't. Surely fewer than 339,980,000 buy from Apple. Maybe 170,000,000.

Do you have some data on this point? My understanding was that most companies exported their manufacturing jobs overseas because if they didn't they would go out of business, not that they needed more CEO compensation.

How does it start? You are planning manufacturing for a new product and the general contractor for the new factory says 15% of the new building cost will be permitting paid to the city. Then the city wants yearly proprty taxes and if it's my state those taxes will be higher than what owner-residents pay. When it's done all the factory workers want enough compensation to cover your half of the SS and Medicare taxes, their half, and their state and federal income taxes. Oh and the EPA wants some more money expensive changes made. Finally OSHA has a surprise inspectionat your existing factory which just voted to unionize. Then a manufacturing provider comes to you and offers to handle all the manufacturing. You don't need to worry about safety, about unions, nor about emissions. So you buy from this manufacturing provider and your new product is built in China at a much lower cost. Your expenses go down so you sell your product for a little less so you can sell more, but still with a bigger margin than before. The stockholders get a great return and give you a raise. Everyone you report to is happy.

Now your competitors are at a disadvantage. They're selling less at a lower margin. Their stock is going down. The CEOs have to find a way to lower costs or be replaced.

That's just one piece of what's happening. Another is that there are 340 million people in the US, and a billion in China. Selling to China means a huge increase in the size of the market you can sell to. But the Chinese government is stopping you unless you start manufacturing your most advanced product there. Sure some proprietary manufacturing technology will leak to China, but the shareholders don't see that, they just see a billion potential customers.

 

[passivecool]

Studies show that consumers are often willing to pay higher prices for locally produced products. Especially if they feel that their community profits from the proceeds, i.e. taxes which finance local infrastructure; fairly paid local jobs. (People who work hard and are only scraping by, and feel they have the dirty end of the stick... maybe not quite so much.) Opinions seem to be divided about the story of Henry Ford doubling the pay of his assembly line workers to the extent that they could afford to purchase the products they themselves produced. I can't say if this is true or only an urban legend, but it does make a nice narrative. I'm thinking that individual shareholders could possibly profit from the early recognition that the golden age of exploitive globalization is slowly coming to an end. 🤣 Just kidding! Don't look up! ☄️

 

[bit_user]

they just see a billion potential customers.

That was ever the big, juicy carrot companies chased. Sadly, if they ever caught it, it wasn't in their grasp for long. Their government is way too protective of its companies and its market ever to let foreigners dominate when domestic producers were ready to step up and take them on.

 

[helper800]

I don't buy Apple products, and I know other Americans who don't. Surely fewer than 339,980,000 buy from Apple. Maybe 170,000,000.

How does it start? You are planning manufacturing for a new product and the general contractor for the new factory says 15% of the new building cost will be permitting paid to the city. Then the city wants yearly proprty taxes and if it's my state those taxes will be higher than what owner-residents pay. When it's done all the factory workers want enough compensation to cover your half of the SS and Medicare taxes, their half, and their state and federal income taxes. Oh and the EPA wants some more money expensive changes made. Finally OSHA has a surprise inspectionat your existing factory which just voted to unionize. Then a manufacturing provider comes to you and offers to handle all the manufacturing. You don't need to worry about safety, about unions, nor about emissions. So you buy from this manufacturing provider and your new product is built in China at a much lower cost. Your expenses go down so you sell your product for a little less so you can sell more, but still with a bigger margin than before. The stockholders get a great return and give you a raise. Everyone you report to is happy.

Now your competitors are at a disadvantage. They're selling less at a lower margin. Their stock is going down. The CEOs have to find a way to lower costs or be replaced.

That's just one piece of what's happening. Another is that there are 340 million people in the US, and a billion in China. Selling to China means a huge increase in the size of the market you can sell to. But the Chinese government is stopping you unless you start manufacturing your most advanced product there. Sure some proprietary manufacturing technology will leak to China, but the shareholders don't see that, they just see a billion potential customers.

So no hard data? That is fine though, not like I have any on hand either. The above is certainly one narrative that has truth to it. I would add a few points to it though. As @bit_user said, lots of companies open up shop in China and almost never become the largest company over there because of the reasons he stated.

Points I would add to the narrative:

1. As the average US worker became more educated / specialized / efficient and they slowly transitioned away from jobs making widgets towards jobs using widgets to make more complicated goods or services. The transition away from jobs making widgets was compounded by the fact that you could make more money at another job using said widgets instead of making them.

2. Since the widgets are still needed to be made for more profitable widget using companies to exist a less educated / specialized / efficient workforce is needed to be employed to continue making those widgets. As companies that made widgets saw that they could not become more efficient at making widgets in their environment because of wage expectations, and competition with companies that can make more widgets for the same input with a similar quality, the transition to more available cheap labor in a new environment begins. Markets naturally adjust because of profit incentive structures. If it no longer becomes profitable to make X in location Y then either X will stop being made altogether or X will start being made in Z location.

3. At the end of the day the widgets still need to be made so there is a profitable business to be had somewhere, but if because of incentive structures do not allow such a business to exist where widget using companies exist, then that is not necessarily an issue. If your countries economy is bigger and better because its populace is almost all using widgets to make more money than what a widget producing company can provide, then that is a good thing.