Apple Makes Major Investment of $500 Million in Domestic Sourcing of Critical Material for Future iPhone Production

Apple, in a strategic move to bolster its domestic operations and address trade-related pressures, has announced a partnership worth $500 million with US rare earths company MP Materials. This investment forms part of Apple’s larger commitment to invest $500 billion in the United States, as stipulated earlier this year.

Under the terms of the agreement, Apple will procure rare earth magnets directly from MP Materials, thereby bolstering its US supply chain. The collaboration also encompasses the development of a new recycling line in California, which will repurpose recycled rare earth materials for use in Apple products.

The partnership is significant due to the critical role rare earth elements play in various technologies, including smartphones, televisions, military jets, and electric vehicles, among others. China dominates the global processing of these elements, accounting for nearly 92% of the global output at the processing stage.

Apple’s CEO Tim Cook expressed pride in deepening the company’s investment in the US economy, stating that rare earth materials are essential for advanced technology manufacturing. MP Materials will establish new magnet manufacturing lines specifically for Apple products at its facility in Fort Worth, Texas. Deliveries are expected to commence in 2027, with the potential to support hundreds of millions of Apple devices domestically and internationally.

The expansion is anticipated to create numerous job opportunities within both companies, alongside training programs aimed at developing a US workforce for magnet manufacturing.

The investment in US-sourced rare earths aligns with Apple’s ongoing initiative to incorporate more recycled materials into its products. For instance, the iPhone 16e, launched earlier this year, incorporates 30% recycled content. Apple utilizes recycled rare earths in various major products, including magnets found in the latest iPhones, iPads, Apple Watches, MacBook and Mac models.

The Trump administration has long advocated for tech giants like Apple to produce their products within the US, rather than relying on overseas assembly facilities and supply chain operations primarily based in China, India, and Vietnam. In May, President Trump posted on Truth Social, expressing his expectation that iPhones sold in the United States would be manufactured domestically, with a threat of imposing a 25% tariff if this was not the case.

However, moving iPhone manufacturing to the US seems unlikely due to the complexities involved in upending the existing production model. Critically, the lack of highly specialized labor within the United States poses a significant challenge. As David Marcotte, senior vice president at international market research company Kantar, previously noted to CNN, the expertise required for each component is something that needs to be cultivated over an extended period.

This collaboration between Apple and MP Materials signifies a significant step towards bolstering domestic operations and addressing supply chain concerns, while also contributing to the development of a US workforce in magnet manufacturing. The partnership is likely to garner approval from President Trump, who has previously celebrated such investments as victories in his efforts to boost American manufacturing.

In recent months, numerous tech giants have expanded their American footprint, with Texas Instruments committing $60 billion to semiconductor manufacturing in the US in June, Taiwanese chipmaking giant TSMC investing $100 billion in US manufacturing in March, and leading AI chipmaker Nvidia announcing plans to build its supercomputers in the United States in April.