Apple talking to Globalfoundries about U.S.-based chipmaking, says report

If Apple owned capacity at a fab, it would give the company the kind of control over both design and chip manufacturing that Intel has.

Brooke Crothers Former CNET contributor

Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.

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Brooke Crothers

July 12, 2013 6:23 p.m. PT

2 min read

A Globalfoundries manufacturing 'fab' in upstate New York. — A Globalfoundries manufacturing "fab" in upstate New York. Globalfoundries

Apple is exploring a possible deal with chipmaker Globalfoundries to produce future chips, according to a report.

A semiconductor industry source told CNET that Apple and Milpitas, Calif.-based Globalfoundries are "kicking the tires." But "by no means" is any firm deal imminent at this point, the source added.

The original speculation about the deal appeared at chip site SemiAccurate on Friday. The report said Apple has "bought into" a fab at Globalfoundries -- a fab is a chip plant, in semiconductor industry parlance.

If Apple owned capacity at a fab, it would give the company the kind of control over both design and chip manufacturing that Intel has, the report said.

Currently, Apple processors such as the A6 are made by Samsung at a facility in Austin, Texas, as well as other locations. But Apple doesn't "own" manufacturing capacity per se.

The Apple deal with Samsung may wind down in 2014, according to a report this week in the Korea Times.

If the Globalfoundries deal reached fruition, it could be a backup plan of sorts, the source said.

"This isn't the first time. [Apple and Globalfoundries] have kicked the tires before. But [Apple] is doing this again to look at a fab to offset risk," said the source.

The source continued: "Globalfoundries and Samsung have the same technology foundation based on an IBM joint development agreement. So that gives [a possible deal] a little less risk if they're looking at a secondary option to offset [the current chip manufacturing] with Samsung. Samsung's fab in Austin and GF's fab in New York could both ramp a similar product and GF could offset capacity that Samsung can't fulfill."

Globalfoundries has a relatively new fab in upstate New York that has "a lot of idle capacity and a lot of new [production] tools," said the source. It's capable of making ARM chips (the same chip design Apple uses) based on 32 and 28 nanometer manufacturing process technology. And it's developing more advanced 20 and 14 nanometer process technologies, the source added.

Linley Gwennap, principal analyst of The Linley Group, doesn't see Apple owning capacity, however. "I don't see why Apple would buy a fab, but they might front some money to Globalfoundries to guarantee access," he told CNET.

Any future deal with Globalfoundries would be complicated by a separate deal with Taiwan Semiconductor Manufacturing Company (TSMC) for production of future processors. There have been persistent rumors about Apple turning to TSMC for future processors.

Globalfoundries declined to comment.