- Apple announced on Wednesday it is giving one of its laser manufacturers, Finisar, $390 million.
- Many outlets reported the news as an “investment.”
- Finisar said in a statement on Wednesday evening that Apple had not made a debt or equity investment in the company.
On Wednesday, Apple announced that it had given a chip and laser manufacturer, Finisar, $390 million out of its “Advanced Manufacturing Fund.”
The stock soared as investors believed that Apple had taken a stake in the company, and multiple outlets reported the announcement as an “investment.”
CNBC’s Jim Cramer, for example, called it a “fantastic” deal and said it turned the chipmaker into an “entirely different company” in a bullish take on the deal. Apple announced its manufacturing fund on Cramer’s show in May.
But, as it turns out, the $390 million wasn’t an investment at all – Apple didn’t purchase any equity or debt from Finisar. The Sunnyvale-based laser company clarified in a statement that Apple hadn’t invested in Finisar at all.
Instead, the $390 million “award” was basically an order for iPhone parts going forward.
“Questions have arisen regarding news reports of Apple Inc.’s (“Apple”) announcement this morning regarding a $390 million award to Finisar Corporation (“Finisar”). Apple has not made a debt or equity investment in Finisar. The amount referred to by Apple represents anticipated future business between the companies over a period of time.”
Finisar is one of two suppliers of “VCSEL lasers,” a key component in the latest iPhone’s facial recognition camera, True Depth.
Last week, Finisar announced that it had purchased a factory in Sherman, Texas for $20 million. “This new site will be used to expand our manufacturing capacity for VCSELs using 6-inch wafers.” Jerry Rawls, Finisar CEO, said during the company’s quarterly earnings call, although he did not mention Apple and said he could not disclose customer demand for its parts.
Apple’s money will “create 500 high-skill jobs” at the factory, Apple said in a press release on Wednesday. Apple’s press releases about the award did not use the word “investment” to describe the award, and nor did Apple CEO Tim Cook’s tweet about the partnership.
Apple launched its manufacturing fund after President Donald Trump pressured the company to create manufacturing jobs in the United States. Earlier this year, Apple’s $1 billion fund gave Corning $200 million, which was described as an “investment” in the press release.