Apple to expand manufacturing of servers in Arizona

Apple plans to expand manufacturing at a facility in an Arizona foreign-trade zone, making more servers there to supply its data centers in the Bay Area and across the United States, it said in a new regulatory filing.

The expansion plan in the foreign-trade zone in Mesa, Arizona could reduce its production costs for the servers. Foreign-trade zones provide relief from, or reductions for, tariffs and taxes that a company normally would pay to bring into the United States items or components manufactured in other countries.

“Production under foreign-trade zone procedures could exempt Apple from customs duty payments,” on a variety of materials and components that would be used in the server assembly, Apple said in its federal register filing.

Apple intends to broaden its operations for final assembly of servers at the command center in Mesa.

Previously, the tech firm had assembled the servers at each of its four data centers, which are located in the East Bay city of Newark; Prineville, Oregon; Maiden, North Carolina; and Reno, Nevada.

Apple uses these data centers to ensure that numerous Apple products and services operate properly, including iCloud, Apple Music, Siri and other well-known consumer services, the company said Tuesday.

The Cupertino-based company’s new filing is an application to renew its ability to operate in Arizona’s foreign-trade zone. It first obtained that permission when it took ownership of the manufacturing complex from former Apple supplier GT Advanced Technologies.

Apple had previously said the Arizona complex would serve as a command center for its data facilities.

But the new filing filled in some details, saying the Mesa manufacturing site will handle numerous materials and components. It said the dozens of items that could qualify for duty-free, or low duty fees, include: electric motors, printed circuit board assemblies, magnets, lithium batteries, routers and network switches, microphones, CDs, software, solid state drives, semiconductor media, monitors, electronic circuits, server rack rails, along with tape and plastic bags.

“Apple Inc. has re-purposed the site as a global data command center that will conduct high-tech manufacturing of finished data center cabinets for other data centers,” the city of Mesa stated in a document it filed in June.

 

Photo illustration: An iPhone held up in front of the Apple logo. (AFP/Getty Images)

 

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