What’s Apple Inc. (NASDAQ:AAPL) Up To With This Chip Factory?

Share on FacebookTweet about this on TwitterShare on Google+Share on RedditShare on LinkedInPrint this pageEmail this to someone

Apple Inc. (NASDAQ:AAPL) recently acquired a chip manufacturing facility in San Jose, California and it has been seen secretly equipping the facility in the recent months. But nobody knows what the company is up to with the facility safe for the claims that the machines being taken there are labeled as delicate. Could Apple be planning to bring its chip production in-house? But a 70,000-square-foot facility doesn’t seem enough to accommodate the production of the various chips Apple uses in its devices.

Apple Inc. (NASDAQ:AAPL) acquired the San Jose chip factory in December for a reported $18.2 million from Maxim Integrated Productions. Before Apple became the new owner of the facility, it was used for production of various sensors. Because of that, some have argued that perhaps Apple is intending to use the facility to manufacture sensors for prototyping various projects. Perhaps the company could use the factory to produce sensor chips for ResearchKit and wireless charging systems among others.

If the company is developing a car as widely rumored, it could also use the facility to manufacturer some components of the car internally.  Perhaps that would further allow the company to continue keeping Project Titan a secret.

Outsourced manufacturing

Although Apple Inc. (NASDAQ:AAPL) designs its own chips, it leaves the actual production of those chips to offshore third-party manufacturers. Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) and Samsung Electronics Co Ltd (KRX:005935)(OTCMKTS:SSNLF) have been the contract manufacturers of processors used in Apple’s products such as the iPhone and iPad.

Is Apple cutting links with rivals?

Because Apple depends on rival Samsung to produce some of its chips, perhaps as the smartphone market evolves, Apple is considering avoiding involvement of a competitor in the production of its next-generation consumer electronics.

Is it about avoiding leaks?

By depending on third-party manufacturers for product components especially during prototyping, Apple Inc. (NASDAQ:AAPL) has been a victim of information leaks. Maybe the company has figured out that producing trial chips internally would allow it to put an end to frequent leaks about its product plans.

But because this is Apple Inc. (NASDAQ:AAPL), you can only speculative its motives behind the San Jose factory.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

You may also like...

More in AAPL, SSNLF
msft
Will Microsoft Corporation (NASDAQ:MSFT) Launch Surface Pro 5 This June?

Rumors have emerged that Microsoft Corporation (NASDAQ:MSFT) could launch the Surface Pro 5 tablet as early as this June. The...

Close