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Apple Outsources A5 Chip Manufacture ... To Texas

Posted by timothy on from the texas-visitor's-guide-free-on-request dept.

Lindan9 writes "In a 9 billion dollar investment, Apple's A5 chips will now be produced in Austin, TX, in a new Samsung factory that is apparently 'the largest-ever foreign investment in Texas.'" According to the article, the factory's been churning out chips since the beginning of this month.

35 of 330 comments (clear)

  1. Asia goes up! by InsightIn140Bytes · · Score: 4, Insightful

    US is now officially destination country for cheap outsourcing.

    1. Re:Asia goes up! by Anonymous Coward · · Score: 5, Insightful

      So will the hundreds in the local construction industry, those in the power industry, transport industry, and the local government who collect property tax.

    2. Re:Asia goes up! by msauve · · Score: 5, Insightful

      Construction is temporal. We're trying to _reduce_ energy usage, believe it or not. A billion dollars worth of chips really isn't that much to transport. You're assuming they weren't given massive tax breaks to build the plant there (they were - 100%).

      To be fair, it looks like this actually created 500-700 jobs. That's still not what people might expect from a $9 billion plant, so the point of my facetious comment stands.

      --
      "National Security is the chief cause of national insecurity." - Celine's First Law
    3. Re:Asia goes up! by durrr · · Score: 3, Insightful

      The numbers of jobs created should be ~10 of "mostly useless emergency supervisors"
      But of course, given the trend of politics-driven inflation and wage-stomping movement seen in general in the US you could probably create ~20000 jobs at $1/hour(counting 1970 equivalent USD) in a year or two.
      China 2.0 bitches, enjoy nation-wide degeneration.

    4. Re:Asia goes up! by marnues · · Score: 4, Insightful

      I'm not reducing my energy. I'm using it smarter and expecting it cleaner. I have no plans to give up my electrical appliances, nor will I unless the need actually arises. And that need will not come.

    5. Re:Asia goes up! by Nutria · · Score: 4, Insightful

      wage-stomping movement seen in general in the US

      It's called Supply And Demand: when (a) the supply of labor jumped by 2 billion as the result of India and China turning their countries semi-capitalist and open to foreign investment, and (b) the demand for labor drops due to automation, the natural wage rate must and does drop like a stone. Combine this with the extra costs incurred from environmental and workplace safety laws, and it's no wonder that the number of industrial jobs in the US has plummeted.

      The smart person accepts this fact and adjusts him/herself accordingly (either by living with a lower wage or doing what it takes to have a higher-paying job).

      --
      "I don't know, therefore Aliens" Wafflebox1
    6. Re:Asia goes up! by grainofsand · · Score: 4, Insightful

      I have been to manufacturing centres (we used to call them factories) and I can promise you we do not want them back nor the jobs.

      When ever I hear someone talking about the loss of manufacturing jobs, especially no-skill or low-skill jobs, I ask them if they hope their own children will one day work in such a job. They always say no.

      Working in a no-skill / low-skill job in a factory is awful. We should not want any part of our labour market filling jobs like those.

      --
      A dream is good. A plan is better.
    7. Re:Asia goes up! by erroneus · · Score: 4, Insightful

      Actually, I say "yes." Such jobs aren't meant to be careers. They are a means to getting where you want to be next. When I was young, I did non-career work to keep myself going until I could get where I wanted to be. But where I came from, "fast food" was almost all there was.

      And people entering the workforce in the career of their choice aren't usually the best as far as I'm concerned. In fact, I have a young trainee right now who never comes to work on time and I find it more than a little annoying. But since I am training her to take my place so I can relocate myself to another office, I'm not going to complain. This is her first job and she's not off to a great start exactly. Had she started off doing "lower work" she might have developed a better work ethic and an appreciation for the type of work she's doing now.

      I could go on about "kids today" and their poor work ethic and all that, but I think that situation doesn't need any elaboration as it pretty much speaks for itself. But at least my two older sons are doing things the way I would prefer them to do. My oldest worked long and hard at "Whataburger" and is now well on his way to being a nuclear engineer. My second son is currently working his ass off at a fabric/craft store to save money for college. I couldn't be more proud of them.

      We need more young people in the work force working these types of jobs. It's not just good for the economy, it's good for our work force at all levels.

    8. Re:Asia goes up! by Opportunist · · Score: 4, Insightful

      But with a wage rate plummeting like a stone, demand for goods is not far behind. Ya know, demand for goods ain't just "what people want". It's also, and at least as important, "what people can afford".

      And "doing what's necessary to get a higher-paying job" isn't going to cut it either. Because if everyone does it... well, can you guess it?

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    9. Re:Asia goes up! by Nick_13ro · · Score: 3, Insightful

      My enthusiasm for parsing legalese waned too quickly to look up all the details for all the involved parties; but it looks like Samsung is certainly not being sent away empty-handed... The city of Austin's agreement is one part, and looks like some rather nice tax 'incentives' and procedural waivers(two decades worth of municipal tax breaks, a variety of free infrastructure upgrades). Apparently the county, state, and school district(?!?) also have their own packages. I, for one, would like to thank the citizens of Texas for subsidizing my semiconductor purchases!

      :) Coming from a country that used to subsidize everything I can tell you tax breaks is not subsidizing. A subsidy is giving money taxed or borrowed from somewhere else to some deadbeat factory that would otherwise go bankrupt the following month- the fact that said factory is never expected to pay any sort of tax or social security contribution just goes without saying. :)

    10. Re:Asia goes up! by grainofsand · · Score: 3, Insightful

      Structural unemployment is indeed a natural consequence of the move from primary to secondary and then from secondary to tertiary economies.

      Provide for those who do not neatly fit into the result of the transition and stop demonising unemployment.

      --
      A dream is good. A plan is better.
    11. Re:Asia goes up! by Anonymous Coward · · Score: 5, Insightful

      Unfortunately, your definition of "successfully adjusting", is indistinguishable from "starving". You can't "successfully adjust" to lower wages without limit. At some point, rational actors will seek other means than "successfully adjusting", in order to maintain their...well...lives. You can certainly make the case that a large segment of the population could take a pay cut without severe repercussions - right now. You can't make the case that people can (or would) adjust to an income stream that falls below the cost of living. Protip: You cannot survive in America on the salary a Chinese worker makes.

      We artificially manipulate supply and demand all the time. This is why fizzy sugared water - which is NOT particularly rare - sells for dozens of times the cost to make it. It's why we have unions and anti-trust laws, and patents, and tariffs. The "law"of supply and demand is grade-school economics, sufficient until you realize that demand is usually adjusted without altering quality OR supply. How? Think about it during the next commercial break.

    12. Re:Asia goes up! by Ol+Olsoc · · Score: 1, Insightful

      wage-stomping movement seen in general in the US

      It's called Supply And Demand: when (a) the supply of labor jumped by 2 billion as the result of India and China turning their countries semi-capitalist and open to foreign investment, and (b) the demand for labor drops due to automation, the natural wage rate must and does drop like a stone.

      Wise sir, you show the true path to prosperity. Make wages as low as possible, and reduce American's living standards to a third world country. Only when we are all poor, shall we all be rich. And this is why post modern conservatism is closely related to communism - many conservatives actually want us to emulate China, with their wages, environmental outlook, and corporate ideology.

      --
      The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
    13. Re:Asia goes up! by Dhalka226 · · Score: 4, Insightful

      When ever I hear someone talking about the loss of manufacturing jobs, especially no-skill or low-skill jobs, I ask them if they hope their own children will one day work in such a job. They always say no.

      Of course nobody wants their child to be a factory worker. They are all meant to grow up and be president or win the Superbowl.

      Now ask them if they would like jobs to be available when reality hits and it turns out that little Johnny is going to be in the majority of Americans who never have a high-paying job or a nice office. Ask if they have enough tucked away in that retirement fund (what, no retirement fund?!) to support 40 year old Johnny because, gosh, he's too good for that kind of work!

      Nobody wants their kid to have a job like that. Nobody should want their kid to have a job like that. But it's a hell of a lot better than long-term unemployment. Service jobs and intellectual property can only employ so many people, and it's only going to get worse.

    14. Re:Asia goes up! by FrkyD · · Score: 4, Insightful
      No. It hasn't.

      Even the highest fifth (top 20%) has averaged less than what had previously been average GPA growth rate over the prior 40 years of a little over 3%. And the bottom half of the top 20% did poorly, because the top 1% did so well that it raised the average for the top 20%. That means that over the past 30 years only people roughly within the top 10% were able to realize any growth in real income.

      Robert Reich puts it this way:

      The wages of the typical American hardly increased in the three decades leading up to the Crash of 2008, considering inflation. In the 2002, they actually dropped. According to the Census Bureau, in 2007 a male worker earning the median male wage (that is, smack in the middle, with as many men earning more than he did as earning less) took home just over $45,000. Considering inflation, this was less than the typical male worker earned thirty years before. * * * But the American economy was much larger in 2007 than it was 30 years before. If those gains had been divided equally among Americans, the typical American would be more than 60 percent better off than he actually was by 2007. [6]

      You can read some more here: http://acivilamericandebate.wordpress.com/2011/04/10/the-30-year-growth-of-income-inequality/

    15. Re:Asia goes up! by unkiereamus · · Score: 4, Insightful

      "mostly useless emergency supervisors".

      Honestly, I couldn't quite parse your entire comment, let alone this particular bit, but taking my best guess as to what you meant by this statement, I felt the need to respond.

      I am a paramedic, almost the very definition of an emergency worker (though firefighters might come closer to the mark), we are staffed to the level that actuarial types say we can reasonably be expected to be needed. Note the emphasis. When I worked in the states, I spent roughly 25-50% of my time doing a) shit all and b) nothing...watching TV, surfing the web, etc.

      What I'm getting at, though, is that emergencies happen, and they cost a lot of money when they do, though that cost can be mitigated by having someone properly prepared to meet the emergency.

      While I personally have no aptitude for that particular sort of number-crunching, I can respect it, and if the actuarial types are doing their jobs right, even if I spend 99.9% of my time sitting with my thumb up my ass, in that last 0.1% of the time, having me, a trained and prepared emergency responder able to cope with the emergency saves the company (or in my case, the government/society at large) enough money to justify my salary for the other 99.9% of the time.

      Emergency personnel aren't "mostly useless", we're "(sometimes) mostly idle", there's a difference.

      --
      I needed a sig so people would know who I am, but I was too drunk to make something witty, so you get this instead.
    16. Re:Asia goes up! by msobkow · · Score: 4, Insightful

      You can't survive on what some immigrant workers accept for pay, either. High living cost areas in the US and Canada are notorious for painting their wages as "high", and they are, relative to the poorer areas some immigrant labour comes from. I mean economic immigrant to a "high pay" area, not necessarily a foreigner.

      But when they get there, they find themselves forced to room with several people to get by, living in conditions no better than they did at home in order to send a significant chunk of their pay home. It's the tech equivalent of the "Alberta Oilsands Lifestyle" -- long hours, brutal living expenses, and relatively high pay for short periods followed by trips home to survive unemployment while looking for the next contract.

      However, they already get paid less than a "local" worker with a house, family, tuition expenses, healthcare expenses, etc. at the high local costs can afford to. The "immigrants" come from areas where most of their costs of living are lower.

      I've lost count of how many times I've had to abandon a market because the cheap immigrant labour companies swamped the market at cut-throat rates. Then along came actual overseas outsourcing, and even those jobs disappeared entirely.

      It may be supply and demand, but the cheap supply markets show no mercy on the countries with the demand. The only saving grace we have is that many of the cheap overseas sweatshops produce crap, or pad their bills through incompetence and low productivity. Unfortunately it takes management getting burned a few times before they realize that you get what you pay for and start hiring local talent at decent rates again. And the growth of the local talent market is a lot slower than the growth of the doomed project farmed out to the lowest bidder.

      Automation will make the grunt coder obsolete soon enough, the same as it's done to every other low-skilled labourer for millenia. "I'm a programmer" doesn't mean what it used to -- the tools are a lot easier to work with nowadays, and there is a lot more experience that's been documented and reproducible than there used to be 20 years ago.

      No one gets paid to read core dumps any more, and I can't say that I miss that aspect of old style computing at all. Live code editing during a breakpoint rocks for productivity. Similarly, manufactured code is simply more cost effective than manually produced source. It may not be as "elegant", but it works, and works well enough to get the job done. In the end, that's all that matters -- getting the job done.

      It's what everyone gets paid for.

      Except for bank executives and CEOs who rake in bonuses for gutting companies and losing money. I don't know why we pay those people anything at all. They're incompetent and greedy, and bad for the future of any business.

      --
      I do not fail; I succeed at finding out what does not work.
  2. Damned both ways? by Anonymous Coward · · Score: 4, Insightful

    Dear America, do you want to work or not?

    1. Re:Damned both ways? by Ethanol-fueled · · Score: 4, Insightful

      1. Destroy economy so wages are depressed
      2. U.S. now source of cheap labor
      3. Best of both worlds - outsourced wages with domestic location
      4. Profit!
      5. Rich get richer, poor get poorer
      6. Repeat as desired

  3. Re:Samsung... by Joce640k · · Score: 3, Insightful

    Nope. Samsung used somebody's else's operating system (Android) and put it in a form factor which:
    a) Had been done before Apple did it
    b) Is pretty obvious - the only real variation possible is the roundness of the corners, everything else follows function (it's a screen!)

    --
    No sig today...
  4. "To be Fair" by SuperKendall · · Score: 5, Insightful

    Construction is temporal. We're trying to _reduce_ energy usage, believe it or not.

    You might be. Countries or states that would like a growing economy are not among those interesting in giving in to entropy.

    To be fair, it looks like this actually created 500-700 jobs.

    One would think being "Fair" would be to quote the jobs figure from the original Reuters article - 1100 for just the chips, never mind the flash - instead of a number pulled from thin air but put forth as fact.

    You go ask your local chamber of commerce if they care at all about 1100+ technical jobs appearing where they are.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
  5. Re:Irony by Ixokai · · Score: 5, Insightful

    I don't know why I'm replying to an AC, but--

    Err, Samsung has been one of Apple's major suppliers for a long time now, in the billions of dollars range. They've been making a huge chunk of the chips that go into everything for years and years-- long before any of these lawsuits started.

    There's nothing counter-intuitive about it. Apple is one of Samsung's largest customers and has been for ages.

    The lawsuit from Apple's side is a design issue, not functional: nearness to the product is irrelevant. They aren't suing about how chips work or are made: its design from an artistic/aesthetic POV, not design from an architectural or engineering POV, that they're suing over. (I'm not defending the lawsuits or the existence of design patents, just noting the difference)

  6. Re:Samsung... by bjwest · · Score: 5, Insightful

    It doesn't matter how the damn thing looks. Every friggin LCD TV manufactured since the dawn of LCD TVs look and feel the same. If it weren't for the glowing 'Sony' emblem on mine, I wouldn't be able to tell the difference between it and a Vizo, Samsung, or any other brand sitting on the shelf next to each other. Ditto for pretty much every LCD monitor, as well. If you're stupid enough to buy a Samsung tablet, thinking you're getting an iPad, then you deserve neither. Caveat emptor, you stupid "consumer". I'm a customer, and I look at what I'm purchasing to make sure it's what I want.

    Just because something is black with rounded corners, doesn't mean it's patentable. I hope Apple gets their asses handed to them soon over their bull shit patents.

    --

    --- Keep the choice with the user..
  7. Real world blows Apple Hater mind - news at 11 by SuperKendall · · Score: 4, Insightful

    Weren't they just SUING them? Now they want a Samsung factory making chips for them?

    In the Real World, relationships are way more complex than one headline or story the media loves to harp on. Samsung is producing chips now which means Apple was talking to them about that something like two years ago...

    Businesses are composed of many different units and the guys who make the chips are about as far removed from the Galaxy Tab as a whale is from an owl.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
  8. It's really not that strange. by Anonymous Coward · · Score: 2, Insightful

    Business relationships among large corporations are not so simplistic as slashdotters like to assume.

    1)
    Pre existing contracts are not usually nullified by new lawsuits unless specified in the terms of said contract.

    2)
    Large companies, such as Samsung, often have multiple business units that operate mostly independently and may or may not care, or even know details of, legal action underway in another business unit. There are even examples (Sony and Fox come to mind.) of one division of a company suing another division of the same corporation.

    3)
    Assumptions made by slashdotters about the morality notwithstanding; among companies past a certain size, and both Apple and Samsung qualify, lawsuits (and especially patent lawsuits) don't imply malice or hard feelings of any particular kind. They're simply negotiation or competition by alternate means.

  9. Re:Samsung... by nightfell · · Score: 3, Insightful

    Nope. Samsung used somebody's else's operating system (Android) and put it in a form factor which:
    a) Had been done before Apple did it
    b) Is pretty obvious - the only real variation possible is the roundness of the corners, everything else follows function (it's a screen!)

    It's not the form factor that Apple is suing over, it's the industrial design of a specific implementation of that form factor. Apple has not sued, threatened to sue, or otherwise made any sort of huff about the dozens of other tablets that have been around both before and after the iPad, just those that bear a striking resemblance to the iPad.

    The Galaxy Tab is a near clone. Apple is right to sue over it if they hold their own design to be distinctive (which it is). This isn't about a rectangle, rounded corners, or black borders, it's about a unique collection of attributes that is immediately recognizable as an iPad.

  10. Re:Cheap labor by martin-boundary · · Score: 3, Insightful

    That's not so bad. I think the biggest problem will be the language barrier. Texans have a peculiar version of English that could potentially lead to millions of dollars wasted when the managers in Cupertino try to communicate exactly what they want over the phone...

  11. Multinational by tepples · · Score: 4, Insightful

    Are you claiming that only (or even mostly) citizens of East Asian countries own Samsung stock? Here's a hint: Multinational publicly traded corporations are called "multinational" because not only do they operate in multiple countries but they also have shareholders in multiple countries.

  12. Re:Samsung... by BasilBrush · · Score: 3, Insightful

    So how come the Samsung looks more like an iPad than it looks like the 2001:A Space Oddessy tablet?

    What bullshit.

  13. Brilliant! by tlambert · · Score: 2, Insightful

    1. Destroy economy so wages are depressed
    2. U.S. now source of cheap labor
    3. Best of both worlds - outsourced wages with domestic location
    4. Profit!
    5. Rich get richer, poor get poorer
    6. Repeat as desired

    And they'll have a built-in market, with all those people in the U.S. who are flush with cash.

    Wait...
    I think I'm sensing a flaw in your logic about that actually being the plan, here...
    If only I could put my finger on the place it was broken...
    And then push to kill that region of your brain so you'd stop saying stupid things like this.

    -- Terry

  14. Re:Samsung... by CheerfulMacFanboy · · Score: 2, Insightful

    When you can site 2001: A Space Oddessy as prior art, that gives Samsung license to tell Apple to go eat a bowl of dicks.

    Errm, you can "site" something as long as you want, if it doesn't actually fit, you are blowing smoke. And since the device in 2001 doesn't actually look like an iPad (or any other device sold today), that's what you just did. Nice Debunkification here.

    --
    Fandroids hate facts.
  15. Perhaps done for supply control by maxwells_deamon · · Score: 5, Insightful

    Factories in China are known for making clones in the same factory after hours. If you can count the numbers of a critical chip exported, you can delay the introduction of clones to market. Yes, I know you can not prevent copies eventiually

  16. Your six month old article means what exactly? by SuperKendall · · Score: 4, Insightful

    Here I have pointed out a figure from a current article published today, and you bring up some crusty thing from six months ago just to try and pull yourself out of the hole you made? And to top it off, it only offers one end of the 500-700 range given...

    Just admit you made up the numbers and should actually read before posting next time.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
  17. On the contrary, work should be respected by Kohath · · Score: 4, Insightful

    All honest work is noble. Anyone who does an honest day's work and tries to do a good job should have our respect. They certainly have mine.

    1. Re:On the contrary, work should be respected by unkiereamus · · Score: 3, Insightful

      The corollary to that that I live by is that "Anyone who does a job I wouldn't do, deserves my respect.".

      I worked as a temp on a construction job once. After a week, I quit. I couldn't take it, my back and knees were killing me, not to mention I was bored out of my mind. I will never work construction again, I'd rather flip burgers for less money, but despite the fact that I've since found my niche in a semi-professional field, I still respect those that work as unskilled construction labor...those poor bastards.

      --
      I needed a sig so people would know who I am, but I was too drunk to make something witty, so you get this instead.