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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