Apple Lobbies for Tax Breaks for Manufacturing More Chips in United States

[MacRumors]

Apple is seeking tax breaks from the U.S. government for domestic chip production, which suggests Apple may be aiming to move more iPhone manufacturing to the United States.

According to Bloomberg, second and third-quarter lobbying disclosure reports indicate that Apple lobbied officials from the Treasury Department, Congress, and the White House on tax issues that included "tax credits for domestic semiconductor production."

Apple designs many of its own chips, including the A-series chips used in iPhones and iPads and the Apple Silicon chips that will be used in future Macs. Development of chips is done in-house in Cupertino, but production is outsourced to Taiwan Semiconductor Manufacturing Company (TSMC).

Apple's lobbying efforts indicate that it perhaps wants to move production to the U.S., where it would not have to deal with tariffs and trade tensions between the United States and China.

Apple's recent lobbying coincides with a push by the company and its partners to move some production away from China and even back to the U.S. in a few cases. There's also a broader effort by the U.S. semiconductor industry to get government support for increased domestic production.

Apple veteran and director of federal government affairs Tim Powderly is leading Apple's lobbying efforts, according to Bloomberg. Apple's prior policy exec, Cynthia Hogan, left the company in May after being selected as one of the members of Joe Biden's vice presidential selection committee.

Most Apple products are made overseas, but the 2013 Mac Pro was manufactured in Austin, Texas. The same Texas plant is also responsible for the final assembly of the new Mac Pro models, and Apple decided to use the plant after being provided with tariff exemptions.

Apple chip partner TSMC in May announced plans to open an advanced chip factory in Arizona, and once that plant is open, it is expected to produce 5-nanometer chips. Apple's most recent A-series devices use A14 chips built on a 5-nanometer process.

Apple in 2018 committed to spending $350 billion to boost the U.S. economy over the course of five years, and has contributed funds to U.S. companies that make iPhone components, including Corning and Finisar.

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Article Link: Apple Lobbies for Tax Breaks for Manufacturing More Chips in United States

 

[Z400Racer37]

Tariffs are evil. Oust the moron in charge of the country, and make the factories where it makes sense, not where the "free market" fascist in charge prefers.

 

[GeoStructural]

I support this. It is already quite difficult to produce hardware in the US. This kind of incentives can even trigger complete production chains in side/related components.

Edit: For people saying this is a form of "ransom" or that it will require others to make up for the "shortfall" that is quite not the case. This taxation doesn't even exist right now because such industry is not here. So whatever small tax is collected it is better than zero. Also this brings employment, depending on the jurisdiction you still get to tax individuals, store revenues are likely to increase, house market gets reactivated, many services will be benefited.

Honestly I do not see how this could be wrong, as long as you can keep schools and safety afloat in the community bringing industry/employment even under tax break is a GOOD thing.

 

[Gooberton]

Exactly what leftists don't understand, they are up in arms when big corporations get tax breaks, then wonder why everyone leaves to China

 

[HiVolt]

Tariffs are evil. Oust the moron in charge of the country, and make the factories where it makes sense, not where the "free market" fascist in charge prefers.

The "free market" has gotten the US in the state its in, and empowered countries like China to where they are.

The "moron" was trying to put america first. you know, you people need the damn jobs. the free market was giving them to China.

 

[827538]

Tariffs are evil. Oust the moron in charge of the country, and make the factories where it makes sense, not where the "free market" fascist in charge prefers.

They are really not and it shows a gross misunderstanding on global economics.

So when the CCP subsidizes an industry that then dumps on the world market causing competitors in other nations to go bankrupt then putting tariffs up to counter it is not OK?

Tariffs are an extremely complex tool that can be a great asset if implemented correctly.


Fully support Apple in this, there's already a bunch of fabs from the likes of GloFo and Intel in the US. This sounds like TSMC is wanting to diversify its' supply chains into the US. As a TSMC stock holder I'm all for it. Apple will have a lot more clout when pushing this than TSMC would so it makes a lot of sense.

 

[69Mustang]

Might want to give Wisconsin a shout. I hear Wisconsin gives out tax breaks to anybody. Even when they know they are being sold a bill of goods, they still offer the tax breaks anyway.

 

[ilikewhey]

before anyone gets into the whole boycott china stuff, TSMC is taiwanese and if apple begin domestic production, this will hurt TSMC and not china 😂

 

[jz0309]

US government want to keep or bring back semiconductor manufacturing to the US, for DoD, so I guess Apple wants its share of the pie ...
[automerge]1603324487[/automerge]

before anyone gets into the whole boycott china stuff, TSMC is taiwanese and if apple begin domestic production, this will hurt TSMC and not china 😂

and TSMC has announced plans for a fab in the US, can't remember exact timing but at least 6 months ago ...

 

[Stella]

Apple doesn't need tax breaks. They can fund it themselves without corporate welfare handouts.

 

[vipergts2207]

Exactly what leftists don't understand, they are up in arms when big corporations get tax breaks, then wonder why everyone leaves to China

Because too often the big corporation doesn’t fulfill their end of the bargain that got them those tax breaks and/or send jobs outside our borders anyway.

Ohio Just Ordered GM to Repay $28 Million in Tax Breaks for Closing the Lordstown Auto Plant

General Motors received more than $60 million in tax credits to operate a massive assembly plant in Lordstown until 2040. But after the facility closed last year, the state says GM must pay back roughly half of those tax benefits.

www.propublica.org

Carrier gets tax breaks, but it's still sending 1,300 jobs to Mexico

Company agreed to invest about $16 million to keep plant in the state.

www.stltoday.com

 

[genovelle]

US government want to keep or bring back semiconductor manufacturing to the US, for DoD, so I guess Apple wants its share of the pie ...
[automerge]1603324487[/automerge]

and TSMC has announced plans for a fab in the US, can't remember exact timing but at least 6 months ago ...

They were supposed to be up and running 8 months ago but were not and we’re looking to renegotiate with the state.

 

[boast]

Apple employees donating to Biden to make sure this doesn't happen

 

[jz0309]

They were supposed to be up and running 8 months ago but were not and we’re looking to renegotiate with the state.

I don’t recall the details and need to read up on it, but “up and running” a fab 8 months ago would have meant construction would have started at least 2 years prior...

 

[JPack]

This news is unlikely to be related iPhone manufacturing in the U.S. More likely related to lowering component costs in general.

A number of chips used in the iPhone already are being made in the U.S., including:

• Skyworks, Qorvo - RF components
• Texas Instruments - battery fuel gauge
• NXP - NFC
• Cypress - USB-C controller

 

[4jasontv]

If they are made in the US than we have to worry that chips made on Friday are not as good.

 

[magicschoolbus]

USA should be manufacturing chips purely based on a national security standpoint.

i hope this gets done.

 

[Madhatter32]

Apple finally acting like an American company. Good. No reason in the world why a company as big and powerful as Apple needs to enrich countries that trample on human rights, engage in industrial espionage, militarily threaten countries friendly to the United States and are openly hostile to the free world generally.

 

[canned_tuna_og]

They'll get the tax breaks and increase msrp, because domestic production has higher opex due to higher hourly wages compared to China, albeit low in reference to consumer indices.

 

[canned_tuna_og]

Because too often the big corporation doesn’t fulfill their end of the bargain that got them those tax breaks and/or send jobs outside our borders anyway.

Ohio Just Ordered GM to Repay $28 Million in Tax Breaks for Closing the Lordstown Auto Plant

General Motors received more than $60 million in tax credits to operate a massive assembly plant in Lordstown until 2040. But after the facility closed last year, the state says GM must pay back roughly half of those tax benefits.

www.propublica.org

Carrier gets tax breaks, but it's still sending 1,300 jobs to Mexico

Company agreed to invest about $16 million to keep plant in the state.

www.stltoday.com

Exactly. Recall At&t laid off thousands of workers almost immediately post late-2017 tax break.

 

[gaximus]

Apple doesn't need tax breaks. They can fund it themselves without corporate welfare handouts.

Given the choice to pay more money or less money, most would choose less. That’s why Apple can afford to fund it themselves, because they make smart choices, like paying less instead of more.

 

[Dekema2]

I have a lot of ambivalence to this, as someone who grew up in a Rust Belt city, Buffalo.

Someone said something about leftists not knowing what they want. It's more so about holding companies accountable to the law.

On the one hand, a company with as much money as Apple shouldn't be asking for significant tax breaks, but with the international race-to-the-bottom for projects like these, it's inevitable. Then you look at the embarrassing failure to open up a Foxconn factory in Wisconsin, which would've been good if they followed through, and you wonder if subsidies are ever worth it.

On the other hand, we should be taking any chance to bring back manufacturing as we can. Ever since I was young, I've had to drive past a huge abandoned steel mill on the lake that harkens back to the glory days of the area. If we can bring manufacturing here, even if it's mostly robotics-oriented, it would be a win in the long run.

 

[Kierkegaarden]

Tariffs are evil. Oust the moron in charge of the country, and make the factories where it makes sense, not where the "free market" fascist in charge prefers.

Tariffs are not evil — they are not preferable, but in this case they were necessary. The President did what those in his position previously did not have the guts to do.

Do you think that having the majority of manufacturing going to one country might cause problems down the road? What if that country decides not to be fair or play by the rules?

What if that country also requires a company to hand over IP for the privilege of doing business in their country? Why would this country need to innovate when they can easily steal the innovations of others?

 

[I7guy]

Can't blame them. Let's reverse a 50 year old trend and get high tech back into the US...trade taxes for jobs.

 

[Madhatter32]

On the one hand, a company with as much money as Apple shouldn't be asking for significant tax breaks, but with the international race-to-the-bottom for projects like these, it's inevitable. Then you look at the embarrassing failure to open up a Foxconn factory in Wisconsin, which would've been good if they followed through, and you wonder if subsidies are ever worth it.

On the other hand, we should be taking any chance to bring back manufacturing as we can. Ever since I was young, I've had to drive past a huge abandoned steel mill on the lake that harkens back to the glory days of the area. If we can bring manufacturing here, even if it's mostly robotics-oriented, it would be a win in the long run.

Agree with your second point. As to the first, Apple still needs to compete in the global marketplace. They cannot do it by manufacturing in the United States without subsidies. We should try what we can to even the playing field somewhat to allow them to do so. I think down stream benefits of manufacturing are huge and would likely pay for the subsidies over the long term. I do not think one failure should discourage us.