Tim Cook Says Apple Will Invest $100 Bn To Make iPhone Parts In The US

Apple CEO Tim Cook announced on August 6, 2025, a $100 billion US investment to build iPhone components domestically. The move comes as Donald Trump threatens 100% import tariffs on foreign-made chips, exempting firms committed to US manufacturing. Cook aims to localize key Apple iPhone parts like glass, chips, etc. through 24 factories in the US . 

However, the full iPhone assembly will remain outside the US for now due to high labor costs and a limited skilled workforce in the US. Apple share price rose more than 5% in trade on August 6 after the announcement, according to Google Finance data. This blog breaks down what it means for the company’s operations, the financial and strategic implications, and why investors should take note.

What did Apple CEO Tim Cook Say?

At an Oval Office event on Thursday, Cook shared that Apple will pour $100 billion into the U.S.-based manufacturing over the coming years. This builds on the $500 billion domestic investment Apple committed to earlier in 2025. The new plan will create an end-to-end silicon supply chain in America which includes design, fabrication, wafer production, and packaging.

Key highlights from Tim Cook’s announcement:

• Apple will build 24 chip manufacturing facilities across 12 U.S. states
• The company aims to produce over 19 billion chips in the U.S. by 2025, supporting a wide range of Apple devices.
• Apple is expanding partnerships with key U.S. suppliers, including Corning, Coherent, Texas Instruments, Applied Materials, and Broadcom.
• Glass for every iPhone and Apple Watch will be sourced from Corning’s facility in Kentucky, strengthening domestic sourcing of essential materials.
• The launch of Apple’s American Manufacturing Program will involve new partnerships focused on localizing critical iPhone components such as chips, lasers, and advanced materials.

Tim Cook framed this as Apple’s commitment to building in the U.S. without compromising product quality or innovation pace.

Why Did Apple Move Now? Trump’s Tariff Pressure

Apple’s announcement did not come out of the blue. It was prompted by US President Donald Trump’s threat of 100% tariffs on imported semiconductors and chips, unless companies commit to U.S. production.

The Trump administration has been pushing tech firms like Apple and Samsung to move manufacturing to the US, especially as the global semiconductor supply chain becomes a 

Earlier in 2025, Apple had already revealed that Trump’s tariffs on foreign components cost the company over $1.1 billion in a single quarter. With further tariffs on the horizon, Apple’s hand was forced. 

While previous calls were brushed off, rising trade tensions, especially with India and China, have added urgency. Trump praised Apple’s move, saying, “If you’re building in the United States, or have committed to build, there will be no charge.”

Announcement amid Trump Tariffs on India

Tim Cook’s announcement came as the US raised tariffs on India, where Apple assembles a large share of the U.S.-bound iPhones. This suggests further scrutiny of companies like Apple and Samsung that manufacture abroad. Trump had earlier talked about having “little problems” with Apple’s outsourcing decisions.

While Trump has pressured the tech giant to move operations to the US, even he acknowledged the operational realities, saying, “The whole thing is set up at other places... it’s been there for a long time.”

Why Is Apple Hesitant to Move iPhone Assembly to the US?

Despite the announcement, Tim Cook has made it clear that the full iPhone assembly will still happen abroad, at least for now. Here are the key challenges that prevent Apple from moving entire manufacturing to the US for now:

1. Labor Costs: Assembly in the U.S. would cost significantly more. Labor in China, Vietnam, and India is substantially cheaper.
2. Lack of Skilled Technical Workforce: The U.S. does not currently have enough technicians with the precision manufacturing experience needed for iPhone-level scale.
3. Supplier Ecosystem: Apple’s supply chain is deeply embedded in Asia. Shifting even partial production involves rerouting entire logistics networks.
4. Time and Cost to Build Facilities: It takes years and billions in CAPEX to build chip fabs and training infrastructure.

The Apple CEO diplomatically acknowledged these realities, stating, “iPhones will be assembled elsewhere for a while, but we’re doing the semiconductors here, the glass here, the Face ID module here... and we’re doing these for products sold elsewhere in the world.”

What is Apple’s Endgame?

Apple’s move appears to serve multiple strategic goals:

1. Tariff Mitigation: Bringing chip and component manufacturing to the U.S. protects Apple from future tariffs, which could otherwise eat into margins and profitability.
2. Geopolitical Risk Diversification: With rising US-China tension, and increasing tariffs on India, Apple is seeking to de-risk its supply chain from overreliance on Asia.
3. Regulatory Goodwill: This investment strengthens Apple’s relationship with U.S. policymakers. Cook’s collaboration with Trump and Apple’s leadership in U.S. tech manufacturing could help Apple avoid regulatory blowback in other areas like AI, App Store dominance, and privacy.
4. Operational Resilience: Apple is laying the foundation for a multi-continent manufacturing strategy, ensuring it can weather global shocks, from pandemics to wars to trade wars.

Financial Impact on Apple: Short-Term Hit, Long-Term Hedge

Apple’s $100 billion investment is a massive capital allocation, but it’s not expected to dent its financials significantly, thanks to its $162 billion cash reserve (as of Q2 2025). However, in the short term:

• Operating margins may shrink due to higher U.S. production costs
• CapEx will spike, especially with new factory buildouts
• Gross margins on certain hardware products may compress unless offset by pricing strategies or efficiency gains

Most analysts view this move as a strategic hedge, not a liability. Reducing exposure to volatile trade policy and building long-term local capacity could boost Apple’s valuation stability.

Apple Isn’t Alone In This

Apple’s announcement follows a wave of U.S. manufacturing commitments across the tech sector:

The U.S. government has also passed the CHIPS and Science Act, which earmarks $280 billion to bolster domestic semiconductor research and production.

What Should Investors Watch?

For Apple shareholders and potential investors, here are key factors to monitor:

• Margin Trends: Watch for changes in Apple’s gross margin, particularly in the hardware segment as local manufacturing may increase costs short term.
• CapEx Guidance: Any revisions to capital expenditure forecasts will reflect the pace and scale of Apple’s U.S. manufacturing push.
• Government Incentives: Apple may benefit from subsidies, tax credits, or CHIPS Act funding, boosting its ROI on this investment.
• AI and Innovation Priorities: Apple delayed a Siri AI update in early 2025. Will capital going to manufacturing come at the expense of innovation spending?

Apple is building resilience into its supply chain with a long-term strategy to anchor high-value components closer to home. This move reduces exposure to tariff volatility, supports U.S. policy alignment, and lays the groundwork for tighter control over critical hardware inputs.

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