Apple to invest aggressively in America to diversify production amid globalization’s end – analyst

Shifting away from a focus in China, the global supply chain will likely change rapidly over the next decade, Loup Funds’ Gene Munster expects. Apple saw it coming in 2018 and will be aggressively investing a projected $430 billion in U.S. tech infrastructure over the next five years, along with investing to a lesser extent in Malaysia, Vietnam, and Thailand.

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Gene Munster for Loup Funds:

Over the years in knowing Apple, I’ve witnessed the company navigate a spectrum of pressure points. Would the iPod trigger growth in Mac sales? Will consumers pay up for an expensive phone? Can production scale while maintaining profitability? Will US tariffs on China prevent the import of Apple products? Will the App Store take rate be impacted by regulation?

Over the past three years, the latest pressure point has emerged… How to navigate China? I believe this is one that keeps Tim Cook up at night.

While Cook often gets the credit for Apple’s success in the supply chain given his operational roots, the substance of the diversification efforts over the past three years and the plan going forward has been led by Sabih Khan (in charge of Apple’s global supply chain) along with Jeff Williams (COO). That team will continue to shift production investments away from China. Of course, Apple is not alone in navigating this dynamic. BlackRock CEO and Chairman Larry Fink said in his 2022 annual letter: “The Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades.”

I can rest well at night knowing that Apple has seen this coming. In 2018, the company outlined a five-year goal to invest $350B in the US including next-generation silicon development and 5G innovation across nine US states. In April 2021, the company increased that investment target by 20% to total $430 billion. That size of investment goes a long way. For example, Intel is expected to spend $20B on its Ohio chip factory. Using that data point as a measuring stick, Apple is allocating enough capital to build 20 fabs in the US. In the years to come, I expect more investment will be committed to the initiative.

MacDailyNews Take: It’ll cost a mint for Apple to extricate itself from the hole it’s dug to China, but it’ll be well worth it in the long run.

Cook will keep publicly playing nice with China while Williams, Khan & Co. work furiously in the background to diversify Apple’s supply chain.

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[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]


    1. The Donald set new records in trade deficit and federal debt. Nothing that you claim you want was accomplished on his watch, because he refused to work with Congress to pass meaningful legislation. He is a loser that all his prior cabinet members (except those indicted) have openly called incompetent.

      Tweets and lies and golf and lies and hamberders and more lies is no way to manage a large nation. First Troll likes “reality” teevee and rallies and red hats, but that doesn’t correct the glaring mistakes his orange icon committed. There are better leaders to restore fiscal sanity and common purpose for America. Trolling for Donald is a waste of time. He’s irrelevant already.

      1. Would it be that I had the time to rip this nonsense to pieces. One should at least sniff the cup before drinking a full serving of CNN piss, I mean KoolAid.

        1. Tell the truth. You can’t find the time because facts aren’t going to support your partisan opinions.

          As a percentage of GDP, only 2 presidents spent more than Trump: Lincoln and GW Bush. Lincoln defended the USA against belligerent slaveholder rebels. Bush fought a war of revenge or oil access depending on whether you work for Halliburton. Trump did…. what? He earned his title as debt king wannabe in what should have been peacetime.

          Your move, chief.

      2. Why do you lefties always lie?
        Until COVID, Obama holds the undisputed deficit record.
        During COVID, Trump asked for a $1 trillion package. Nancy Pelosi made it $2.2 trillion.
        Nancy Pelosi has been spending money like a crack whore with a stolen credit card.

        1. Notice how hard Trumpet worked to balance the budget (as he promised). Too busy golfing? Had a hard time waking up before 10am to get anything done? What’s the excuse for running record deficits when stable genius is supposed to be a great businessman?

          What data do you have, orange koolaid drinkers? Tell us how much the spending budget was trimmed under your savior.

    2. Yes indeed, First Then. As time passes more truths like this one emerge. Trump was DEAD ON correct globalization killing the American workforce for greedy capitalist profits first passed by the Clinton administration (NAFTA) and Obama wanted to make it much worse with the Pacific Trade agreement Trump eliminated. Make it in America and buy American a mantra Trump preached and never truer than today with global instability…

  1. Apple should realize that nature’s substance is weaved with diversification efforts. The superior planet is a diverse planet. A superior species may a diverse one, capable to adapt to every changing situation while maintaining that dynamic equilibrium, but knock it out with say, a good dose of radiation, and it’s bye bye to a whole lot of species.

    I’m confident that something like the tardigrades will survive. That’s because a superior planet is a diverse planet.

      1. The concept is a biological one, not a political one and there is lots of evidence and common sense to it. The actual concept is ecological diversity provide ecological stability. Superiority in this case means survival, not of just a singular species but of ecosystems and the planet itself. Earth is the only known planet so far with life on it that we know and in that aspect it is superior.

  2. Tim: please focus like a laser beam You are the CEO of the largest, richest and one of the most vigorous cash-producing companies on the planet.
    Step away from your pet projects, thinking you are the moral guardian of the planet and return to product & eco-system advances…true invention and excellence. Skip the fluffy iterations and moral grandstanding (like the suggestion above).

  3. “Funny” his gum chewing seemed to block his understanding of globalism creep and China’s malevolence.
    You seem to forget, “pet projects” are ok for the weekend, but for the rest of the week, any/all good CEOs have a laser beam focus on business excellence and stock holders as customers.

    1. I disagree. Where I see a failure on his part is his willingness to put so much of the business in the hands of the Chinese, and other authoritarian regimes. That is a moral problem, and it cuts into any moral authority he has in other ways. In addition, there is already plenty of focus on business excellence, they wouldn’t be where they are without it. And stock holders have gotten plenty as well. But an excess focus on stock holders is what leads to so many short-term decisions in so many large corporations (though in looking over your statement I’m not sure I correctly interpreted you stock holder reference). Eventually dealing with the devil, in this case, the Chinese government, is going to come back to bite you. It’s a stupid decision that wouldn’t be made if more people in these positions had better moral clarity. It’s not just Apple, it’s nearly all of the largest corporations with this blind spot that morality doesn’t matter when in fact it matters more than just about anything in the long run.

      1. Exactly correct, Ron.

        Everyone outsources. Nobody grows all his own food, manufactures his own house from scratch, forges his own microchips, assembles his own computer… We all have to trade. There are ancient Greek & Phoenician bronze statues over 2000 years old. Greece has no tin mines. The tin required to make the bronze has now been traced to what is now Britain. That trade route dates back to circa 325 BCE with the voyage of Pytheas. The world has only gotten more interconnected by trade and human migration since then. Those who think trade is bad have been misled. Fair, transparent, monitored trade is good. Unregulated and corrupt trade is bad. Nondemocratic corporate control of governments and political parties is bad. Unfettered social engineering/marketing to sell more cheap disposable consumer junk and video games to Americans is bad. Know the difference.

        Apple holds moderately high supply chain standards compared to most companies, but it acts just like any other corporation when it comes to the bottom line: fiscal and political power.

        It is ironic the people cheering for Apple to be richer complain in the same breath how Washington DC doesn’t listen to the individual citizen. Thank Citizens United for that. They complain about corporate outsourcing but at the same time want everything cheap and regulation-free. They can’t have it both ways. If it’s underregulated, the corporate executives will privatize the gains, seek the cheapest global supplier, and lobby against any and all pollution or employee protections while greenwashing their marketing campaigns. Now look how much money Cook has at his disposal to dictate to any other company or country what he wants. The richest will always out-lobby the individual especially if you let democracy devolve into a pissing match between corporate puppets funded by a network of black money from who knows what “shithole nations” and companies. If you want to be great, you have to raise your standards. If you support continued corporate domination in exchange for cheap gas and baubles, keep blindly following one of two corrupt parties. Keep buying the cheapest junk and lies that the biggest corporations push to you. Click and it will be delivered by Amazon to your doorstep while the local production facility rusts away. If you wanted local jobs, you’d support small local companies and you would pay more. You would vote for independent representatives willing to implement some actual controls over corporations whether or not they pass your social acid test or hold exciting rallies. Real power to the people requires a candidate who can wrestle the fiscal and political power away from corporate fat cats. You wouldn’t fall for the trickle down myth or get distracted by the nonstop barrage of mudpuddle-deep media from unverified sources on any platform. You’d look at the balance sheet and demand fiscal responsibility. You’d demand that the taxes and externalities that current corporations have lobbied away be put back on the accounts of the billionaire executives who recklessly outsourced for decades. You’d pay attention to what happens in the smoky backroom of your halls of government instead of the vitriol in chatrooms. Yet not once have I heard anyone here say, “I saw this on CSPAN…” Not once.

        Let’s not pretend this is political debate. It is not. There is no political party in the USA that puts the voter ahead of his campaign funders. It’s obvious who is the master, with a red and a blue puppy dog to entertain the distracted masses with snarling empty socially charged rhetoric. The orange dog isn’t a solution either. Temporary trade spats and arbitrary unilateral trade barriers didn’t accomplish anything good, they actually drove up costs while corporate masters voted themselves huge tax breaks. You individuals got tossed a few pennies and your kids got a new record debt to pay off. Spending didn’t get reduced as promised. Trade rules didn’t change to convince Apple or any other company to leave China. Quality careers (as opposed to gig work) didn’t suddenly materialize next to Amazon’s newest tax-free distribution centers. It’s time that corporations were required to serve the people, not the other way around. Global high quality trade standards that countries like the USA can meet and cheap nations would not (at least not as they are) would be a necessary first step. The USA can’t stand alone and it can’t produce everything for itself. but it can lead the free world to be more sustainable and responsible to its citizens so they can do more than dead end gig work. Be like Germany: clean, technically proficient, and top quality, with regulation that holds corporate leaders accountable to the local communities, to the environment, and to labor. The bitter disenfranchised lower classes need a real voice in Congress, as opposed to a bipolar reality TV game some people try to play here.

        Focus on the important stuff: the public treasury and the democracy by the people, for the people. All else pales in comparison.

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