Report: Samsung produces Apple's A5 chip at massive new Texas plant

Samsung Electronics is producing Apple's (NASDAQ:AAPL) dual-core A5 chip, which is used in its iPad 2 and iPhone 4S, at a sprawling new fabrication plant in Austin, Texas, according to a Reuters report. The news indicates the United States now owns a piece of the pie in building Apple gadgets, which are primarily constructed in China.

The Reuters report, which cited unnamed sources, said that Samsung has constructed a $3.6 billion non-memory chip production line at the 1.6 million square foot facility, and that the line reached full production in early December. The report also said that nearly all of the non-memory output at the plant is dedicated to Apple chips. (Samsung also produces NAND flash memory chips in Austin.)

Apple declined to comment on the report, as did Samsung, but a Samsung spokeswoman told Reuters that the company recently expanded its Austin plant to produce logic chips--which is what the A5 is. The A5 is based on a design from ARM Holdings and Apple claims it runs either 800 MHz or 1 GHz clock speed per core. 

Samsung was the second-largest smartphone application processor vendor in the third quarter, according to research firm Strategy Analytics, behind only Qualcomm (NASDAQ:QCOM).

The factory is a boon to the U.S. economy, said Forward Concepts analyst Will Strauss. (Samsung added about 1,100 jobs to support the new production line in the factory, which produces 40,000 silicon wafers every month, according to Reuters.)

"My guess since it was a new fab, it was lightly loaded," Strauss told FierceWireless. "To Samsung's benefit and Apple's benefit they were able to ramp up to huge volumes fairly quickly." Strauss added that the new production line is likely ramping up chips for the next versions of the iPad and iPhone.

For more:
- see this Reuters article
- see this Mashable post

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