$390M Supplier Investment Signals Apple's Definitive Switch to Face ID


Apple has announced on Wednesday, Dec. 13, that it made a decision to invest a hefty $390 million in Finisar, a USA company that makes iPhone laser chips.

Apple uses it for Face ID, Animoji and Portrait mode selfies with the iPhone X TrueDepth camera and the proximity-sensing capabilities of AirPods. It's rumored that some of next years iPhone's will have Face ID included.

Apple Inc. has made its second notable investment this week - this time in facial recognition technology company Finisar Corp.

Shares of Finisar, a Sunnyvale, California-based optical components maker, rose more than 30 percent to $25.41 on Wednesday morning.

Finisar will use the money to refurbish a manufacturing plant in Texas where it will build chips created to power special iPhone features including Face ID, animojis and portrait photography. "The amount referred to by Apple represents anticipated future business between the companies over a period of time".

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President Trump has been pushing Apple to move its manufacturing efforts from China to the U.S. On the campaign trial, Trump said: "We're going to get Apple to build their damn computers and things in this country instead of in other countries".

"This is one more example of Apple continuing to verticalize their supply chain by taking control of components that are hard to get or they think are critically important and that they can differentiate on", said Bob O'Donnell of Technalysis Research. Finisar already has a plant nearby in Allen, Texas.

Apple's fund is created to assist the growth of US-based manufacturing, as it seeks to bring a little more production back to the States.

Apple didn't reveal how its large investment will benefit future iPhones, AirPods or any other devices on the horizon, but it did tease new laser possibilities. The new plant, which will create 500 jobs, is expected to open in the second half of next year. "Technology is only as good as the people behind it, and Finisar is a company with a long history of putting its employees first and supporting the community it's a part of". That's an impressive investment in a critical supplier, following the $200 million that Apple awarded to Corning in May from the same fund. "We're extremely proud that our involvement will help transform another American community into a manufacturing powerhouse", the exec said.

The iPhone X had a lot of changes that iPhone loyalists had been asking for.