Apple to Open Manufacturing Facility in Mesa

Apple will start manufacturing some of its products in Mesa.

Governor Jan Brewer's office announced today that the plant "will create at least 700 quality jobs in the first year and generate significant capital investment."

"The project also will produce approximately 1,300 construction and other associated jobs for the people of Arizona," a statement from the Governor's Office says.

It looks like the Phoenix Business Journal was onto this last week, when it heard that Apple was interesting in buying a Mesa manufacturing plant formerly occupied by First Solar.

There's no word from the Governor's Office on what kind of stuff the company will make in the plant.

Nor was there mention of what kind of "incentives" the company may be getting.

Consider this: Last year, Arizona reportedly was in the running for a facility that advertised 3,600 Apple jobs. Austin snagged Apple with a $21 million tax-incentive package assembled by the state.

At that time last year, Bloomberg News quoted Mesa Mayor Scott Smith as saying, "There is no doubt we would be neck and neck and provide anything Austin could provide and then some."

We've e-mailed the Governor's Office on the issue, and we'll let you know if we hear back. (Update: Brewer's office responds below.)

In the meantime, here's the statement issued by Brewer:

"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."
UPDATE 5:34 p.m.: From Brewer spokeswoman Annie Dockendorff:
"A deal closing is on the table, but the details won't be available from the Arizona Commerce Authority until the contract is finalized and signed."
UPDATE 5:46 p.m.: The facility will be used to produce "sapphire material," as part of a deal between Apple and another company. A search of the Apple website shows "laser-cut sapphire crystal" is used to make the fingerprint reader on the new iPhone. You can read the details from the sapphire-producing company below:
GT Advanced Technologies Inc. (Nasdaq:GTAT) today reported results for the third quarter of fiscal year 2013, which ended September 28, 2013.

The company also announced that it has entered into a multi-year supply agreement with Apple Inc. to provide sapphire material. GT will own and operate ASF® furnaces and related equipment to produce the material at an Apple facility in Arizona where GT expects to employ over 700 people. Apple will provide GT with a prepayment of approximately $578 million. GT will reimburse Apple for the prepayment over five years, starting in 2015.

Although the agreement does not guarantee volumes, it does require GT to maintain a minimum level of capacity. GT will be subject to certain exclusivity terms during the duration of the agreement. GT expects this arrangement to be cash positive and accretive to earnings starting in 2014. Gross margins from this new materials business are expected to be substantially lower than GT's historical equipment margins. However, the company believes the strategic nature of this agreement and the benefits associated with building a recurring revenue stream are important to its continued diversification.

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Matthew Hendley
Contact: Matthew Hendley