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Apple Expands ‘Made In USA’ Efforts With Sapphire Glass Plant, Manufacturing Deal In Arizona

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Apple has plans to build a manufacturing plant in Arizona that will extend its ‘Made in The USA’ efforts beyond the Mac Pro and other silicon facilities it maintains in Texas. The news came via a release from both the state of Arizona and the company GT Advanced Technologies, which will produce sapphire material.

The multi-year agreement, which was reported by MacRumors, includes a $580 million prepayment that will get paid back to Apple over five years starting in 2015, and requires that GT maintains a minimum level of manufacturing capacity. The GT release alludes to the fact that Apple got a stellar deal on the glass, noting that ‘gross margins from this new materials business are expected to be substantially lower than GT’s historical equipment margins’, but says that the strategic nature of the agreement and the fact that it’s a recurring deal offset the margins. Basically, Apple came knocking and GT couldn’t say no.

Apple is purchasing an empty First Solar plant to repurpose it as a glass manufacturing center.

In a statement made to Pocket Lint, Apple said that “We are proud to expand our domestic manufacturing initiative with a new facility in Arizona, creating more than 2,000 jobs in engineering, manufacturing and construction,” further noting that “this new plant will make components for Apple products and it will run on 100% renewable energy from day one, as a result of the work we are doing with SRP to create green energy sources to power the facility.”

Apple’s nods to renewable energy apparently helped the deal, which will create 700 permanent jobs and 1,300 construction jobs.

“Apple is indisputably one of the world’s most innovative companies and I’m thrilled to welcome them to Arizona,” said Arizona Governor Jan Brewer. “Apple will have an incredibly positive economic impact for Arizona and its decision to locate here speaks volumes about the friendly, pro-business climate we have been creating these past four years. Their investment in renewable energy will also be greening our power grid, and creating significant new solar and geothermal power sources for the state. As Governor, I’ve worked hard to demonstrate that Arizona is open for business. Today’s news is proof that’s paying off.”

Apple uses sapphire glass for the protective covers of its camera units, as well as the home button on its latest iPhone. Earlier this year Apple announced that it would assemble its new Mac Pro computers in a plant in Texas. Apple currently cuts deals with its Chinese manufacturers that involve hefty pre-payments for both production and machinery costs. This deal appears to mark an extension of this kind of work to the US, where GT will manufacture the glass inside an Apple-owned facility. Though the deal notes that GT will work off the pre-payments, there is no mention about who will retain ownership of the facility, though it appears to be Apple.

Currently the sapphire glass is only used in a couple of components, but GT says that new furnace technologies will let it lower its cost and raise its capacity. It states this should let it expand its LED and specialty sapphire businesses, but doesn’t clarify whether that means Apple might switch to the harder glass from its current Corning mystery supplier parts.