Talk of purported Apple chip plant ‘Project Azalea’ pops up in Oregon

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Last week, an interesting report popped up regarding ‘Project Azalea,’ a mysterious plan for a 3.2 million-square-foot production facility being pitched to New York economic development officials by an unidentified company. Because of its reported $10 billion construction cost, the general consensus is that it’s likely a chip-making plant. And rumor has it that it’s for Apple’s products.

The theory is that the Cupertino company could be behind this Azalea project, along with a major manufacturer like Foxconn or TSMC. It’s no secret that Apple is trying to move its mobile chip business away from Samsung, and a new $10B fab plant would definitely help out with that. The question is, where is it going to be built? Because Azalea talk just popped up in Oregon…

The Oregonian (via MacRumors) is reports:

“Business Oregon — the state’s economic development agency — confirms that it’s recruiting a company that goes by the codename “Azalea.” The department declined to discuss details of the effort, citing a nondisclosure agreement with the unnamed company.

However, officials in New York have been actively pursuing what’s known there as “Project Azalea.” Documents obtained by The Business Review, an Albany, N.Y., weekly, describe that project as a 3.2-million-square-foot semiconductor factory that would employ at least 1,000 people.

The cost of building and equipping a new semiconductor factory — a fab, in the chip industry’s parlance — runs in the billions of dollars. That’s attracted great interest to the chatter around Azalea, which at this point is largely speculative.

Within the chip industry, the theory is that the fab would be a contract facility to build microprocessors for Apple’s mobile devices, the iPhone and iPad.”

There have been several reports and rumors linking Apple to TSMC in recent years. And many believe the semiconductor company is Apple’s next chip partner, as it moves away from Samsung due to their ongoing legal dispute. Samsung, of course, currently builds all of Apple’s custom Ax chips in its Austin, Texas plant, including the new A6 processors found in the iPhone 5 and iPad 4.

This project Azalea, if the above holds true, is interesting for a few reasons. For one, it would almost certainly mean that Samsung would lose all of Apple’s chip business. And two, TSMC (or Taiwan Semiconductor Manufacturing Company) has some noteworthy technology, like its 20nm chip process, which would make future iOS devices faster, thinner and much more power efficient.

It’s not surprising that Oregon is in the running for the plant. The state already hosts several high-profile campuses and plants, including Apple, who just started building a data center in Prinville, Facebook, who has two facilities in the same area, and Nike, who is headquartered in Beaverton. Oregon is appealing for its abundant resources and major tax breaks, among other reasons.