Samsung is announcing plans to invest another $4 billion in its Austin, Texas factory in order to renovate one of its chip production lines and increase fabrication of the system chips used in smartphones and tablets, reports Reuters. The plant is most notable for being the location of Apple’s A5 and A5X processor production — the "engines" of the iPhone and iPad, to borrow an expression from Tim Cook.
As noted by ZDnet, Samsung is the world’s largest memory chip maker by revenue, and despite its ongoing legal drama with Apple, it produces many components for the company’s best selling devices. In fact, this relationship could be at the heart of Samsung’s recent investments. An IC Insights report posits that as Apple engages with other chipmakers, Samsung will need to attract other large-scale customers to make up the difference.
This move brings Samsung’s total investment in its Austin plant to $13 billion, reports a Dow Jones wire. But while $4 billion is the largest ever single foreign investment in the state of Texas, as ZDnet notes, it's less than the company's Q2 profit. The timing coincides with Intel’s own $5 billion investment in its Fab 42 plant in Arizona. According to SEMI, a semiconductor industry association, 16 percent of global chip production happens in the US, down from 23 percent ten years ago.