Samsung makes new $4B investment in Texas iPhone, iPad chip plant

August 23, 2012
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Here’s another proof that Apple and Samsung are not about to divorce anytime soon. Even with all the legal drama surrounding Apple’s and Samsung’s intellectual property disputes, each company is still dependent on the other for their core businesses. Case in point: Samsung is investing another $4 billion in its Texas plant that produces Cortex A5 and A5x chips.

Reuters reports that the additional investment of $4 billion is on top of a $1.98 billion investment announced in June, which is meant to build a new logic chip plant in South Korea and the conversion of two plants that produce memory chips to a logic chip production line.

Reports say these investments are being done in view of increased demand for mobile processors, particularly those that power the Apple iPhone and iPad. Samsung may also be future-proofing its own capacity to make its own chips, given the high Galaxy S III demand. It can be noted that carriers had to postpone their S III launch due to supply issues.

The new investment brings the total of Samsung’s capital infusion into its Austin, Texas plant to $13 billion.

There is an opposing view, however. While Samsung is primarily upping its capacity in order to better meet demand from Apple and other smartphone and tablet manufacturers, the company is also future-proofing itself, in the event that Apple decides to shift its sourcing of chips to another manufacturer. This has been considered a possibility ever since Apple started talks with other providers like the Taiwan Semiconductor Manufacturing Company.

Another interesting fact is the timing. Samsung has timed this investment alongside Intel’s own $5 billion investment in its Arizona fabrication plant.

Regardless of motivation, what is sure at this point is that Samsung is “keeping all jobs intact,” and “will be doing a massive training of workers,” given the capacity upgrades and facility conversion.

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