Apple Revving Up iPad 2 Parts Production

| iObserver


Chipmaker Samsung has 300 hires slated for its Austin semiconductor plant, most of whom will be devoted to working on Apple’s A5 chips, and Apple is reportedly willing to pay three to four times current prices to secure LCD screens for the iPad 2.

Cult of Mac reported both pieces of news on Thursday. Apple will likely spend US$7.8 billion in 2011 on processors, flash memory, and LCDs from Samsung, according to writer Ed Sutherland, who said that Apple is also willing to pay a three to four times markup for LCD screens from AU Optronics.

Mr. Sutherland noted that this would be Apple’s first direct deal with AU Optronics. He speculated that complaints about the iPad 2’s display could be the reason behind Apple’s willingness to pay more than the going rate for the LCDs.

[12:17 PM EST, 3/31/11: Article updated to remove comment that Apple’s A5 is not used in the iPad 2. As numerous articles, including teardowns, have noted, the A5 is indeed used in the iPad 2. Samsung fabricates the chip for Apple. TMO apologizes for the error.]


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“willing to pay three or four times current prices” is most likely a mis-interpretation. Apple has found another supplier for LCD touch screens. These touch screens cost three or four times as much as plain LCD screens (non-touch screens) that this company used to build. Which is good news for Apple’s supplier, building and selling expensive touch screens instead of cheap LCD screens, but doesn’t mean Apple pays too much.


This is the advantage of having all that cash in the bank. Apple can do whatever it needs to to fulfill customer demand.

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