Samsung seeking money to expand production in Texas

As Neowin reported last month, Samsung currently produces the dual-core A5 processor used in the iPhone and iPad, from their Austin, Texas based manufacturing facility. Having recently reached full capacity in October and with Apple now receiving shipments from the 1.6 million square foot facility, Samsung is looking to expand. 

Samsung is now seeking to finance a one billion dollar expansion of their facility, according to a report by Bloomberg. The facility originally cost South Korea based Samsung nearly $3.6 billion dollars to construct and is setup to produce non-memory based chips, with nearly all of the facility is dedicated to producing processors for Apple.

In what is their first attempt to raise foreign bond capital since 1997, Samsung has sent proposals to multiple banks to help finance the project. Samsung has a strong credit rating and the low interest rates in the bond market make it a good time to raise the money needed, in this manner. Given Samsung's strong balance sheet, it's expected they will not have issues raising the funds necessary to expand the facility.

The facility is expected to already be in production of the replacement to the A5, which is expected to be included in the next generation iPad and iPhone, coming out this year. As consumer demand for these devices continues, Apple's demand for increased production will follow and it seems natural that Samsung will continue to invest in this facility to meet that need.

As we reported yesterday, Apple recently released a comprehensive listing of their suppliers for the first time. Along with technology from Texas Instruments, the built-in-Texas A5 processor is one of a handful of parts that are sourced from the United States that Apple uses in its mobile devices. The final assembly is still completed by Foxconn and is done in China and Taiwan.

Samsung says the new factory has created about 1,100 new jobs, brining their headcount to around 2,400 people in the Austin area. The plant produces around 40,000 silicon wafers every month. The plant is the largest foreign investment in the Texas economy according to the Austin Chamber of Commerce. With this expected expansion, those numbers will continue to create jobs and stimulate the Texas economy.

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15 Comments

KingCrimson said,
Basically it's a new A6 plant.

Given the timeline, it's probably going to be needed for the A7, rather than the A6 which should be coming out this spring in the next iPad.

Apple to Samsung: "Even though you spent a couple of billion dollars building a factory with another few billion dollars on R&D in making the processor for our products we will still continue to pretend that we made the processor"

sam232 said,
Apple to Samsung: "Even though you spent a couple of billion dollars building a factory with another few billion dollars on R&D in making the processor for our products we will still continue to pretend that we made the processor"

LOL!

sam232 said,
Apple to Samsung: "Even though you spent a couple of billion dollars building a factory with another few billion dollars on R&D in making the processor for our products we will still continue to pretend that we made the processor"

As far as I am aware Apple are designing the chips (this is why the acquired P.A Semi) and Samsung manufactures them, well because, Apple aren't in the business of wholesale processor manufacturing. If Samsung had designed the chip they'd use it in their own phones

So Apple is sueing Samsung for "copying their designs" yet also is buying all their A5 chips from them... *sigh* big corporations confuse me.

RedFlow said,
So Apple is sueing Samsung for "copying their designs" yet also is buying all their A5 chips from them... *sigh* big corporations confuse me.

Samsung is firing back at Apple too, mind you. The key thing here is that, at the end of the day, this operation provides a mutual gain for both parties.

RedFlow said,
So Apple is sueing Samsung for "copying their designs" yet also is buying all their A5 chips from them... *sigh* big corporations confuse me.

Its like your friends and you, you have little arguments here and there but at the end of the day you're friends with them still.

RedFlow said,
So Apple is sueing Samsung for "copying their designs" yet also is buying all their A5 chips from them... *sigh* big corporations confuse me.

The design and manufacturing divisions are two very different parts of the company.

Astra.Xtreme said,

The design and manufacturing divisions are two very different parts of the company.

Don't bother trying to explain elementary concepts to fools.

With this expected expansion, those numbers will continue to create jobs and stimulate the Texas economy.

Lest that sound too much like an advert., if this Texas plant is anything like most other US chip plants you're generally talking about very low paying jobs. Yes jobs help & any paychecks stimulate the economy, but Samsung wouldn't have the plant there if overall it cost less to put it & run it somewhere else.

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