Samsung seeks $1B bond to expand Texas processor plantSamsung is in talks with banks to acquire $1 billion to fund an expansion at its facility in Austin, Texas that is said to be the source of A5 processors powering the iPad 2 and iPhone 4S, and could possibly be the factory responsible for Apple's next generation A6 chip bound for the rumored iPad 3.
The South Korean electronics maker revealed on Monday that it will issue its first overseas bond since 1997 to fund an expansion at its Austin plant that produces processors used in mobile devices, including those used in many of Apple's mobile products, reports Businessweek.
According to spokesman James Chung, Samsung has filed proposals to multiple banks to borrow up to $1 billion in five-year maturity bonds issued by the company's U.S. arm.
The company's logic-chip business, which currently oversees the production of Apple's A4 and A5 processors that power the iPhone and iPad lines of mobile devices, may double spending to 8 trillion won (about $6.95 billion) in 2012. It is unclear whether the boost in manufacturing capability is for the company's own mobile devices or to handle demand for an as yet unannounced chip that will power the rumored next generation iPad.
Samsung's Austin plant reached maximum capacity in October 2011, just as smartphone shipments saw a year-to-year increase of 44 percent according to Strategy Analytics Inc.
Samsung's Austin, Texas Plant | Source: Samsung
The South Korean company's handsets are seen as direct competition with Apple's iPhone business and posted record earnings earlier this month, with profits hitting $4.5 billion in the December quarter riding on an estimated 32 million smartphone sales.
As of Sept. 30, 2011, Samsung had over $19.2 billion in cash and equivalents according to Bloomberg. An estimate from Korea Investment & Securities Co. says the company's operating profit most likely doubled in 2011 and may grow 82 percent in 2012.
Apple and Samsung have been tangled in a worldwide patent dispute since April 2011 when the Cupertino, Calif., company filed a suit alleging the South Korean company blatantly copied the look and feel of the iPhone and iPad. Most recently the Galaxy phone and tablet maker was denied a preliminary injunction against the iPhone 4S in Italy.
On Topic: General
- September iPhone event marks return of live stream for Windows users
- Apple researching wireless earphones with bone conduction noise cancelling tech
- Apple supposedly confirmed to hold Sept. 9 iPhone event at Bill Graham Civic Auditorium
- Apple's Jony Ive, Jimmy Iovine to join tech and entertainment luminaries at Vanity Fair event
- Universal unveils official poster for upcoming Steve Jobs movie