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Apple awards Corning iPhone vendor $ 250 million from US manufacturing fund




(Reuters) – Apple Inc on Tuesday said it would award Corning Inc $ 250 million from a $ 5 billion fund dedicated to US advanced manufacturing.

FILE PHOTO: CEO Tim Cook talks during an Apple event at their headquarters in Cupertino, California, USA September 1[ads1]0, 2019. REUTERS / Stephen Lam

Corning delivers glass to Apple for products such as iPhone and Apple Watch. Since the first iPhones hit the market in 2007, the glass on each iPhone sold has been manufactured at Corning's Harrodsburg, Kentucky facility.

Apple and Corning did not disclose the terms of the agreement. Lately, Apple has made long-term delivery agreements here with its suppliers where they provide cash in advance to lock in supplies with parts and better prices. The supplier, in turn, receives capital to carry out research and development or upgrade factories.

With few exceptions, Apple devices have been assembled in China, where the company's supply chain has become increasingly concentrated over the last five years. The cluster has put Apple at the center of the US-China trade war.

Tariffs for many Apple products such as AirPods wireless headsets came into effect on September 1, with most analysts expecting Apple to absorb the cost of fees if they were to pay them. Apple has not disclosed any financial consequences specifically related to tariff rates.

Meanwhile, Apple has spent the last few years emphasizing its supplier base in the United States.

Apple announced the US Suppliers Fund in 2017, placing $ 1 billion aside, increasing its figure to $ 5 billion a year later. The company said it spent $ 60 billion with more than 9,000 US suppliers in 2018.

Counts $ 200 million in 2017, and now Corning has received $ 450 million from the Apple Fund. Apple said in a statement that Corning's expenses support 1,000 jobs in Corning, including about 400 manufacturing jobs at the Kentucky plant.

"This award underscores Apple and Corning's shared belief in the important role of ingenuity in creating industry-leading products, and the pride both companies take in leveraging American innovation and advanced manufacturing to solve some of the world's toughest technology challenges," Apple Chief Chief Officer Jeff Williams said in a statement.

Apple has now awarded $ 1 billion from the fund, with other awards being $ 390 million to chip maker Finisar Corp, which makes chips for Apple's face recognition technology in Texas, and $ 10 million for a joint venture between Alcoa Corp and Rio Tinto's aluminum business to develop a carbon-free aluminum smelting process.

Reporting by Stephen Nellis in San Francisco; Editing by Leslie Adler

Our Standards: The Thomson Reuters Trust Principles. [19659015]



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