Samsung To Increase Chip Production For iPad 2, iPhone 5

A Source in South Korea has confirmed to a local newspaper that Samsung has agreed to significantly increase the production of mobile application processor chips in 2011.

The Korea Times says that the semiconductor arm of Samsung will deliver 20,000 sheets per month in 2011, up from 5,000 in 2010. (ed : we're not sure how much that would be).

This would mean that Apple would become an even bigger consumer than Samsung itself, with more than half of the production capacity dedicated to building parts for the iPad, the iPhone and the iPod Touch.

Samsung is also rumoured to be building a new $3.6 billion chip fab in Austin, Texas, much nearer to San Francisco than Seoul, where the Korean Chaebol is based.

If the report is true, then it means that Samsung is likely to be building the next generation A5 chip, with Apple expected to come up with a design that closely resembles that of the Samsung Orion, a dual core Cortex A9 chip.

Samsung and Apple have had an often conflicting relationship given that they compete against each other in a number of markets, from laptops to tablets, smartphones and media players.

Yet, Apple is one of Samsung's biggest clients and buys processors, RAM, flash memory and LCD screens from it at a steadily increasingly rate.