Apple Pledges $1 Billion for New North Carolina Engineering Hub
(Bloomberg) -- Apple Inc. said it will open an engineering hub in North Carolina, marking its first major campus on the U.S. East Coast as part of an increased commitment to investing domestically.
The Cupertino, California-based technology giant said Monday it will spend $1 billion in the area around Raleigh Durham and Chapel Hill, known as the Research Triangle and home to other big companies that have a significant presence there including IBM, Cisco Systems Inc. and GlaxoSmithKline Plc. Apple said it will create 3,000 jobs at the new site in machine learning, artificial intelligence and software engineering.
Apple joins other tech peers in expanding beyond West Coast headquarters to take advantage of more diverse work forces and investment incentives. In 2019 Apple broke ground on a second, $1 billion-campus in Austin that could eventually house 15,000 employees. Apple said staff could start moving in next year. Facebook Inc., Tesla Inc, Alphabet Inc. and Oracle Corp., have also been drawn to the Texas city, while Amazon.com Inc. is building a second headquarters in Northern Virginia and has also been expanding in New York.
Apple’s announcement comes as part of the iPhone maker’s planned 20% increase in U.S. investments over the next five years, allocating $430 billion in direct spending on U.S.-based suppliers, data center investments, capital expenditures in the U.S., and other projects, including dozens of Apple TV+ productions and research and development on technologies like custom silicon and 5G. The effort will result in 20,000 new jobs, including in San Diego, Los Angeles, Boulder, Colorado, and Boston by 2026, the company said in a statement Monday.
“At this moment of recovery and rebuilding, Apple is doubling down on our commitment to U.S. innovation and manufacturing with a generational investment reaching communities across all 50 states,” said Chief Executive Officer Tim Cook.
Apple’s rapid expansion comes as the pandemic and other forces such as lower cost of living elsewhere make Silicon Valley less appealing for engineering talent. Apple’s main campuses are The Apple Park and the Infinite Loop, about 40 miles south of San Francisco.
The moves show that Apple is willing to go to where the talent lives and where the cost of doing business is cheaper. Los Angeles is a hub for entertainment, San Diego is home to many chip and wireless networking experts, while the Raleigh-Durham area has established itself as a major U.S. technology research hub. Before Apple settled on Austin for its 2019 expansion, North Carolina pushed hard for an Apple campus by offering tax breaks.
Over the past three years, Apple’s investments have outpaced its original five-year goal of $350 billion set in 2018, the company said. But Apple has also been growing. Its shares have gained about 200% since the last investment plan was announced in January 2018, and the company is now worth more than $2 trillion. Apple said it’s also the U.S.’s biggest taxpayer, having shelled out $45 billion in domestic corporate income taxes in the past five years.
Increasing investment in the U.S. also comes as President Joe Biden has announced new plans to boost taxes on overseas profits to help foot the bill for domestic infrastructure projects. Apple and other big tech companies disclosed more than $100 billion in profit outside the U.S. in their last fiscal years, making them prime targets of the president’s proposal.
Apple is on track to meet its 2018 goal of creating 20,000 new jobs in the U.S. by 2023, the company said. The new commitment will include growing its San Diego team to more than 5,000 employees by 2026, a 500% increase from its 2018 goal. Apple is also boosting its engineering team in Boulder, Colorado, by 700 people and adding hundreds of jobs in Massachusetts, Washington, Iowa and Colorado. As it grows, Apple said it’s committed to doing so in an environmentally sustainable way. Almost 60 of Apple’s U.S. sites are LEED certified, the company said. Apple said it’s carbon neutral for all of its operations in the U.S. and around the world, and last year committed to be 100% carbon neutral for its entire supply chain and products by 2030.
Apple’s shares were little changed at $134.94 at 3:14 p.m. in New York.
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