Apple Suppliers Benefit from Higher iPad 2 Demand

Apple Suppliers Benefit from Higher iPad 2 Demand

Apple appears to be doing its part to revive the U.S. economy. Taiwan-based chipmaker Samsung reportedly will hired 300 new technicians in its Austin, Tex. plant to fill a growing number of orders for the iPad 2. Meanwhile, the Cupertino, Calif. tech giant is paying a little-known company three to four times the going price for LCD screens destined for the new tablet.

Samsung Austin Semiconductor plans to hire 300 more engineers, with most of the plant’s chip production reportedly going to Apple. The new workers follow more than 600 hired in 2010, brining the plant’s total payroll to around 1,700. Although rumor suggested Apple may have used its own A5 chip in the iPad 2, closer x-ray examination found Samsung still powering the next-generation device. Apple is expected to spend $7.8 billion with Samsung this year, purchasing processors, flash memory and LCDs.

As for LCDs, in an uncharacteristic move for the usually tight-fisted Apple, the iPad 2 maker reportedly has ordered the panels for three to four times the regular price from AU Optronics. Although the company is the No. 4 LCD manufacturer, this would be the first time Apple is a customer and the order could comprise half of AU’s production capacity. The action has prompted skepticism about the Economic Daily News‘ report which sent the company stock six percent higher Thursday.

Although this is the first time Apple has dealt with AU Optronics directly, in 2010, the Cupertino, Calif. firm used Cando, an AU subsidiary, to produce panels for the original iPad. Some observers speculate a rash of complaints of light problems with the iPad 2’s display may have prompted Apple to order a rush LCD production, making the higher costs acceptable.

[AppleInsider, 9to5Mac]

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  • Quincy

    Samsung is a South Korean company, NOT Taiwan.

  • Kittyk240

    OPPS!! A VETERAN TECHNOLOGY JOURNALIST THAT DOEST KNOW SAMSUNG IS FROM SOUTH KOREA?

  • Amazed

    Of course they’re going to be happy. They’re going to be even happier than Apple because Apple buys more from them than customers buy from Apple.

  • Glenn

    BTW Japan isn’t in China Ed. Just thought you should know before you screw yourself over.

About the author

Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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