Apple Funding ‘Large Portion’ of Samsung’s Fab Plant

Regardless of numerous courtroom battles between Apple and Samsung all over the world, the Cupertino-based tech giant depends heavily on the South Korean electronics giant for different components for its smartphones and tablet devices. It is pointed out that Apple has invested a considerable amount in the Korean firm’s Texas-based chip making facility.

The South Korean electronics giant, Samsung has shaped a large part of Apple’s supply chain for its iPad and iPhone, making Flash and DRAM memory for the devices. It also fabricates Apple’s custom ARM-based A4 and A5 processors that power the Apple’s most popular products. It is also reported earlier that Samsung is manufacturing A6 processors for Apple as well.

Peter Misek, an analyst of Jefferies thinks that Apple isn’t only benefiting Samsung’s revenues, but also helping with a “large portion of Samsung’s Austin fab (fabrication facility),” particularly assuming that it is “manufacturing the upcoming quad-core A6 app processor there.”

After its South Korean plant, Austin Fab is the company’s second non-memory chip fabrication plan, which is spread over 1.6 million square foot, with a valuation of $3.6 billion.

The companies are involved in a number of legal battles on different fronts in several countries, but still Apple is cutting ties somewhere.

Misek says:

“All else equal, we see Samsung losing share in Apple’s supply chain and other Asia suppliers gaining share. We believe semi equipment could benefit from the increased order flow. We believe that in 2013 when Apple starts production of the A7 that the company will likely add TSMC as a supplier in addition to Samsung.”

Initially, the Cupertino-based company has been connected with TMSC (Taiwan Semiconductor Manufacturing Company), with Apple reportedly issuing trial to the company to make its next generation A6 processors, shifting production away to a non-competitive supplier.

The next A6 processor is assumed to be a quad-core chip, which will power the Apple’s next generation iPad tablet. The tablet is expected to launch with LTE support and reportedly scheduled for early March launch.

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