Apple buys former semiconductor plant in North San Jose for $18.2M

According to a report from Silicon Valley Business Journal, Apple has recently purchased a former chip fab in North San Jose. The deal reportedly went through last week and saw Apple pay $18.2 million for the 70,000 square foot building.

Prior to Apple’s purchase, the plant was a manufacturing plant for semiconductor company Maxim Integrated Products. The listing for the property touted that it is well suited for “prototype, pilot, and low-volume manufacturing.” The space, however, is too small for any serious manufacturing. Maxim purchased the facility in 1997 from Samsung, but later closed ti down when it pulled out of the consumer electronic business.

More than likely, Apple will use the facility for prototyping and light development. The purchase doesn’t appear to signal an entry into chip manufacturing for Apple. It’s also worth noting that Samsung Semiconductor facilities are located just down the road from Apple’s new 70,000 square foot space.

“It’s pretty small for a fab,” said Dean Freeman, research VP at Gartner, where he leads the Internet of Things Center of Excellence. “The only thing I can think that they would be doing is potentially be saying, ‘OK, we need to do some prototyping in some way or form.’ Or they want a clean-room space to do some tweaky development. This isn’t big enough to do anything (production-wise).”

The most likely use case for Apple with this new facility is increased product-development, pre-manufacturing, and prototyping. Back in August, Apple purchased a 43-acre developmental plot in San Jose for $138 million. Apple is also, of course, currently developing its new Campus 2 headquarters in Cupertino, which open in 2016. You can read our full timeline of that project here.