Apple invests in new manufacturing plant in Arizona

Apple revealed plans to build a manufacturing plant in Arizona. The facility would be created in partnership with mineral crystal specialist GT Advanced Technologies Inc to make sapphire materials for Apples electronics devices. The news came as a press release from both the state of Arizona and the company GT Advanced Technologies, which will produce sapphire material.

Apple agreed to a deal to pay $578 million to GT Advanced Technologies Inc. to supply equipment for the facility, GT Advanced said in a statement yesterday. The machines make materials out of sapphire, which is increasingly used in smartphones to cover camera lenses and home buttons.

“Sapphire substrates are suitable for covering lenses, buttons and displays because they are transparent, yet more scratch-resistant than glass,” IHS said. “Glass can become scratched from contact with hard objects, which can degrade the performance of a camera lens or a fingerprint recognition window.”

GT specializes in “crystal growth equipment” for consumer electronics and other industries. It said on Monday it signed a multi-year supply agreement with Apple to provide sapphire material, which has in the past been used in watches, optical instruments and integrated circuits.

According to IHS, the market research firm, demand for sapphire materials significantly increased since Apple started using it as a camera-lens cover in 2012. The material also is used for the home button of the flagship iPhone 5S handset.

Apples new plant would push job creation in the United States. It comes after scrutiny of its massive overseas cash reserves and conditions for workers at contract manufacturer facilities it uses in China.

Apple said that “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,” further noting that “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.”

GT Advanced’s shares rose 22% to $10.24 in extended trading following the announcement yesterday, after closing at $8.38 in New York. Apple rose 1.3% to $526.75, paring this year’s decline to 1%.