I agree with Jan.Mikkelsen that displays should be much more of a concern than building fabs. For one providing added products for the whole ecosystem of the consumer space is the only way to continue growing. There will be a need to get inside the display electronics to provide newer features and self actualization with mass appeal. I am not saying they will want to build the panels, but they will probably start designing and selling video TV products, integrated PVRs,even game consoles and so on. This alone will require major R&D. Samsung already has TVs with Apps and Apple needs to continue to innovate...I absolutely do not think Apple wants to get in the fab business, they could though multi source more aggressively to get supply stability.
The idea has some merits and yet is so far outside of Apple's management expertise as to possibly be ludicrous ( evne if they bought hired guns so to speak ).
My counterpoint to real men have fabs
( ie TJ's profitless bluster )
Still true today. STICK TO YOUR KNITTING, esp when the cpus in handsets are basically commodities.
And I am a process engineer, with silicon in my blood.
I have to agree with the majority of the comments that this would be a bad idea. I'm not an expert on Fab houses, but what I've seen in companies constantly retofiting or selling off fabs as we shink the chips sizes, makes me believe Apple would be out the fab business in 3-5 years with major losses for what is really no business advantage. There really are no business reasons for this, unless Apple want to be a general chip manufacturer, which goes against everything Apple stands for.
The only other reason mentioned is ego. Dear God, if Steve Jobs will spend 4-10 billion dollars because of ego, the board of directors should vote him out now. I have to believe with his success, he would see benefit of buy vs. make that all of us see.
Apple own fab? Steve Jobs is making a terrible mistake, if he ever tries.
As some had earlier mentioned, Apple gets a better deal by throwing contract for its A4 to any foundary. In this way, Apple only needs to manage sales, marketing and CE development.
Fab is a liability, unless you got volume for a long term.
How many giants can substain long-term profit with fabs these days?
Intel even selectively selling away its fabs this decade.
STMicro and Freescale as well.
Many Japanese corps had also done so.
You need a large volume to keep it profitable.
Samsung has volume.
Intel has volume.
AMD has volume.
STMicro has volume.
TI still kept some own fabs.
You can simply count how many giants still hold on their fabs for new and strategic products.
For matured and low-volume parts, they outsourced to TMSC, UMC etc.
FYI - a fab needs at least a decent US$500 million to build. That's not a small amount.
Apparently, 25 years of learning and re-affirming that being a system house and a sporting a vertical manufacturing system at the same time does not go well together. Let me repeat some of the main reasons:
1. Alignment of product to the process, and as a result: (a) rapid process development to stay at the leading edge; (b) Fluctuation in the utilization of a single market-segment demand, unpredictable and deadly.
2. Huge cash outlays every 1-2 years with a 5 year or longer ROI - major disconnect between the dynamics of the system and the manufacturing enterprise.
3. Management bandwidth. After all, if Steve does not or cannot fully understand the fab, both sides of Apple will suffer. You cannot invest billions and then ignore it.
4. The fallacy that assuring supply means owning manufacturing means. Long disproved as a concept.
5. Supposedly better prices - wrong! Is that why Intel goes to TSMC?
In short - not just bad, but really, really bad idea.
Fabs are built over cheap labor and deep pockets for capital equipment. A fab can't just churn out A4 processors unless 1/2 the universe is going to buy them... There's got to be a much better reason than profitability for getting into the fab business such as divesting from petroleum or bringing nano-technology to the Arab World. Yes, an ego is a good reason too. But even a hubris is controlled by his board...
Too risky. Apple has done very well competing on design and high value branding. If Samsung adopts a similar model (unlikely) Apple could switch to another partner relatively easily, and there would be no shortage of suitors. If it ain't broke, don't fix it.
There are other ways to do this. A joint venture fab with a foundry comes to mind. In this scenario Apple is guaranteed a certain run-rate of capacity, but when it is not needed the foundry is free to sell it to other customers. It costs money but not as much as owning your own fab and having to develop or buy the process to put in it