Tuesday, November 12, 2013

Samsung to Use GlobalFoundries as 'Flex Capacity' for Producing Apple Chips

GlobalFoundries will be used as 'flex capacity' for Samsung's production of Apple chips; rather than directly producing for Apple, according to an AllThingsD report.

Yesterday it was reported that GlobalFoundries is preparing to make chips for the Apple iPhone and iPad at its Fab 8 facility in Malta, New York. At that time it was unclear if GlobalFoundries was Apple's customer or Samsung's. It now appears that it is the latter.

Sources close to the situation said the deal that appears to be taking shape looks more like this: Samsung will use GlobalFoundries for what is known as “flex capacity.” This is a long-standing industry practice under which a chip manufacturer pays to occasionally use another company’s factories when demand on their own factory is running higher than they would like, and they need a little help.

According to the report, Samsung is basically hiring GlobalFoundries as a subcontractor and will continue to manage the relationship with Apple.

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