Samsung to invest $4bn in mobile chip plant

Samsung has begun planning a renovation of its Austin, Texas semiconductor plant.

The tech giant plans to retrofit its plant to move from memory chip fabrication to more mobile chip manufacturing. The plant will manufacturer chips for products like the iPad and iPhone, as well as Samsung's mobile products.

Samsung expects the retrofit to be completed by the second half of 2013 and cost around $4bn.

"We are extremely pleased to extend our presence in Austin and reinforce Samsung's capacity for highly advanced logic products," said Dr Woosung Han, president of Samsung Austin Semiconductor.

"The added ability in production will allow our customers to better respond to market needs."

Following the factory renovations the plant will focus on system-on-a-chip (SoC) processors for smartphones and tablets. The plant renovations will primarily convert two memory chip lines into logic chip lines that will be used to make mobile GPUs and CPUs.

While the investment could be seen as a sign of progress for American manufacturing, analysts warn the move isn't that clear cut. Director and chief analyst of semiconductors at IHS Len Jelinek told V3 that the move points more towards industry strategy than anything else.

According to Jelinek, the move to focus on SoC chips in the Austin site is more about the talent and infrastructure already at the plant than about the potential of US manufacturing as a whole.

"In the world of chip manufacturing, the ability to cluster semiconductor fabrication plants (FABs) is critical to success. It is all about infrastructure and engineering talent," he said.

"This is why companies like Intel, TSMC and Samsung build on 'campuses' rather than spread FABs out all over the world. Global Foundries in New York is taking the same approach, relying on the technology hub around Albany to gain access to engineering talent and the technology infrastructure available."

Last year there was talk of Apple shifting production of its iPhone and iPad-based chips away from Samsung and towards Taiwanese manufacturer TMSC.

Apple and Samsung have been in an intense legal dispute involving the possible patent infringement of iPhone technology since late last year.