Apple opening next-gen sapphire glass plant in Arizona, creating 2,000 US jobs

iPhone 5c (Manufacturing 001)

The Arizona State Governor Janice K. Brewer has just issued an interesting press release confirming that Apple will open a manufacturing plant in Mesa to build components for products. The manufacturing facility will create more than 700 high-quality jobs in the first year and “generate significant capital investment”.

She kept mum on details, but the “significant capital investment” rules out server farms and perhaps alludes at some sort of a new plant to assemble products other than the new Mac Pro, which is being assembled in a Texas plant. UPDATED with new info, jumps past the fold for the latest..

According to the release, the project will also produce approximately 1,300 construction and other associated jobs for the people of Arizona.

The release quotes Governor Brewer as saying:

Apple is indisputably one of the world’s most innovative companies and I’m thrilled to welcome them to Arizona. 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’s new Arizona investment is being billed as the latest in a growing line of companies that have taken notice of “Arizona’s strong pro-business tax and regulatory environment, and the highly skilled and quality workforce”.

Jordan Golson of MacRumors passed along today’s media release by GT Advanced, a New Hampshire-based materials manufacturing company and an Apple component supplier, which announced a multi-year agreement with Apple to provide steady supply of the sapphire glass, a crystalline form of aluminum oxide known for its superior durability and scratch resistance.

GT Advanced will “own and operate furnaces and related equipment” at a new Apple facility in Mesa and the iPhone maker will prepay a cool $578 million for the equipment. GT will pay back this sum over five years beginning in 2015. The agreement does not guarantee volumes, but does require GT to maintain a minimum level of capacity.

Touch ID hardware

Furthermore, GT will be subject to “certain exclusivity terms” during the duration of the agreement, reads the statement. Although GT expects the deal with Apple to be cash positive, gross margins from this new materials business are expected to be “substantially lower than GT’s historical equipment margins,” which sounds a lot like Apple’s way of doing business.

Per GT:

However, GT believes the strategic nature of this agreement and the benefits associated with building a recurring revenue stream are important to its continued diversification.

GT also has some futuristic sapphire glass furnaces:

GT has accelerated the development of its next generation, large capacity ASF furnaces to deliver low cost, high volume manufacturing of sapphire material.

These R&D efforts will support its non-LED initiative with its new customer and are expected to enable the expansion of GT’s LED, industrial and specialty sapphire businesses by positioning GT and its equipment customers as the industry’s lowest cost sapphire producers.


iPhone 5 (manufacturing process 012)

Apple uses sapphire glass to protect lens on all iOS devices and Touch ID sensor on the iPhone 5s.

We also know from patents Apple’s been researching processes that can make the expensive sapphire gemstone a viable option for the mass production of consumer electronics.

This Apple patent filing, for example, describes a sapphire laminate just 1mm thick as being feasible for mass manufacture and ready to be used as a next-generation cover glass for iPhones and iPads.

Apple has provided the following comment to Pocket-lint:

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.

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.

The upcoming facility is pitched as a statewide collaborative effort between Apple and led by the Arizona Commerce Authority chaired by Governor Brewer, in conjunction with partners at Salt River Project, the Greater Phoenix Economic Council, the City of Mesa and Maricopa County.

President and CEO of the Arizona Commerce Authority, Sandra Watson, let slip that Apple’s facility will rely on renewable energy, which further demonstrates Apple’s “forward-thinking, progressive nature”.

She remarked:

Salt River Project has been instrumental in working with Apple to create additional advanced renewable energy sources that will power next-generation manufacturing.

Apple brought some manufacturing jobs back to the United States by investing north of $100 million into its new Austin, Texas facility where new Mac Pros are being assembled. Furthermore, the company will be opening up another facility in Pennsylvania to manage East Coast AppleCare repairs.

What do you make of this?

Maybe these sapphire covers are for the iWatch?