Samsung looking to raise $1 billion to expand Austin, Texas factory responsible for Apple chips

Despite being at each other’s throats in the court room, Samsung and Apple are best buddies when it comes to their component relationship. Last summer The Economist did some research about the various bits and bobs that make up the iPhone and discovered that 26% of the bill of materials of an iPhone 4 was for three parts that Samsung supplies Apple. Can you guess what those parts are? If you know anything about Samsung then you’re not going to be too surprised to discover that it’s the processor, the RAM, and the memory chips. Now rumor has it that Samsung’s factory in Austin, Texas (pictured above) is responsible for producing the A5 processor that today goes inside the iPad 2 and iPhone 4S. Samsung apparently can’t make them fast enough, so they’re looking to raise $1 billion to fund an expansion of that one factory. They’re going to do that by issuing overseas bonds, something that the company hasn’t done since 1997.

What does this say about Apple’s mobile devices? They’re selling ridiculously well, practically printing money. Oddly enough we wonder why Apple simply doesn’t add another chip vendor to the mix, like TSMC for example, who not only has more capacity, but also a more advanced 28 nanometer process. As far as we know Samsung is still pumping out 45 nanometer parts, though there are plans to bring that down to 32 nanometers. Smaller transistors equals more processors per silicon wafter equals cheaper chips. Said chips also use less power, produce less heat, and can be clocked faster. Maybe Apple knows something we don’t about Samsung’s future chip roadmap?

Anyway, it’s good to see Apple actually moving some of their manufacturing jobs to America, though we can’t imagine them wanting to bring the actual device assembly part of the production process to the U.S. anytime soon. Labor costs, unions, and unknown unknowns would make the $600 iPhone 4S come in at closer to $1,000.