Exclusive: Made in Texas: Apple's A5 iPhone chip

Fri Dec 16, 2011 3:35pm EST
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By Poornima Gupta

SAN FRANCISCO - Apple Inc is famous for relying on low-cost Asian manufacturers to both source and assemble its popular gadgets, but the consumer device giant recently started receiving a critical component in its iPad and iPhones from closer to home - Texas.

The A5 processor - the brain in the iPhone 4S and iPad 2 - is now made in a sprawling 1.6 million square feet factory in Austin owned by Korean electronics giant Samsung Electronics, according to people familiar with the operation.

One of the few major components to be sourced from within the United States, the A5 processor is built by Samsung in a newly constructed $3.6 billion non-memory chip production line that reached full production in early December.

Nearly all of the output of the non-memory chip production from the factory - which is the size of about nine football fields - is dedicated to producing Apple chips, one of the people said. Samsung also produces NAND flash memory chips in Austin.

The South Korean giant began supplying the A5 processors to Apple this year from the Austin plant, the people said.

Apple declined to comment, saying it does not detail supplier relationships. A Samsung spokeswoman declined to comment on its customers and the specification of the chips made in its Austin plant.

But she said the company expanded the Austin factory to include a production line to make logic chips. The A5 is one such chip.

The powerful A5 processor, which uses technology licensed from Britain's ARM Holdings, is designed by Apple in California.   Continued...