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Report: Apple to Consolidate Server Production in Arizona
(Photo by Spencer Platt/Getty Images)

Report: Apple to Consolidate Server Production in Arizona

In unusual practice, company appears to be keeping hardware manufacturing in-house

In a move that may somewhat appease President-elect Donald Trump – who has criticized Apple for outsourcing iPhone manufacturing to China – the company is reportedly planning to consolidate production of servers that populate its data centers around the world in Mesa, Arizona.

The company has applied for permission to produce servers and data center cabinets at the former 1.3 million-square foot manufacturing plant in Mesa it is converting into a data center and, apparently, a computer assembly facility. The application to the federal Foreign-trade Zones Board seeks permission to produce “finished products” at the site and to ship materials and components from overseas without paying customs duty.

An anonymous source familiar with Apple’s data center operations told Business Insider that the company has been producing servers for its data centers at individual data center sites but plans to consolidate production at the Mesa facility.

While it’s not unusual for companies that operate data centers at Apple’s scale to design their own IT gear, it is unusual for them to also assemble it in-house. Companies like Facebook, Microsoft, and Google usually outsource actual production of their custom servers and network switches to design manufacturers in Asia.

Apple, like the three companies mentioned above, is a member of the Open Compute Project, the open source data center hardware design community founded by Facebook. Unlike its peers, however, Apple has yet to make an official design contribution to OCP.

One possible reason Apple is keeping hardware production in-house is that it considers its server designs a competitive advantage and doesn’t want to expose them to contract manufacturers.

TAGS: Apple
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