Dec 16, 2011

According to Reuters, citing sources, Samsung is producing the Apple A5 processor at a new 1.6-million-square-foot factory in Austin. The facility, which went into full production earlier this month, cost Samsung $3.6 billion. Although the facility doesn't only produce Apple's processors, Reuters' sources say, "nearly all of the output" comes from the A5.

Samsung's Apple-branded A5 is a system-on-a-chip (SoC), featuring a processor, graphics, and system memory.

Reuters' finding is rather interesting when one considers that the majority of components in Apple's iPhone and iPad are fabricated and assembled overseas. Currently, South Korea and China are key areas in Apple's supply chain, and it has long been believed that the U.S. was not.

But there's more to this story than simply location. Apple and Samsung are bitter rivals in the mobile market, and are currently waging legal battles around the world. Samsung argues that Apple's iPhone 4S violates patents it holds, while Apple has said that the Samsung Galaxy Tab 10.1, as well as the company's smartphone line, copy its own products.

Furthermore, it appears the companies aren't looking to end that battle anytime soon, even though so far, neither company appears to be getting a leg up over the other. Over the last several months, Apple has won a few judgements, only to see those victories overturned soon after.

So far, Samsung and Apple have been able to keep their concerns about alleged patent infringement away from their supply partnership. But earlier this year, reports surfaced saying the iPhone maker was looking elsewhere to strike deals. A report in June said Apple was possibly considering jumping ship to chipmaker Taiwan Semiconductor Manufacturing, though neither company confirmed that claim at the time.

Now, though, there is speculation that Apple and Samsung will team up on the Apple A6 processor rumored to be coming to the next iPhone and iPad.
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