Samsung Looks for $1 Billion Bond to Expand U.S. Processor Plant
The South Korean electronics manufacturer recently revealed that it will issue its first overseers bond since 1997 to fund an expansion at its Austin plant, which produces processors used in mobile devices including those used in Apple’s iOS devices. According to Businessweek
, Samsung spokesman James Chung noted that the company has filed proposals to multiple banks to borrow up to $1 billion in five-year maturity bonds issued by the company’s U.S. branch.
It is being said that the company’s logic-chip business which currently oversees the production of Apple’s A4 an dA5 processors may double spending to 8 trillion won (roughly $6.95 billion) in 2012. It’s unclear whether the boost in manufacturing capability is for the company’s own mobile devices or to handle demand for an announced chip that will be powering the next generation iPad.
Samsung’s Austin plant reached a maximum capacity in October 2011 when smartphone shipments saw a year-to-year increase of 44% according to Strategy Analytics Inc
. The company’s handsets are direct competitors 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 September 30, 2011, Samsung had over $19.2 billion in cash and equivalents according to Bloomberg
. Estimates are now saying the company’s operating profit which doubled in 2011 is most likely to grow 82% in 2012. Furthermore, the two have been tangled in a worldwide patent dispute since April 2011.
Nonetheless, it isn’t a surprise that one of Apple’s manufacturers would be looking to expand further as Apple continues to grow. Are you surprised? Share any thoughts and opinions below!