By Josh Ong

Published: 10:45 PM EST (07:45 PM PST)

Samsung will hire 300 engineers and technicians for a semiconductor plant in Austin, Tex., in the company's latest round of expansion largely driven by increased demand for the iPad and iPhone, while AU Optronics has denied rumors that it received orders for flat panel screens bound for the iPad 2.

Samsung

EETimes reports that Samsung Austin Semiconductor plans to create 300 more engineering jobs this spring as part of a $3.6 billion expansion. According to sources, most of the production at the 300-mm fab is commissioned by Apple.

The 300 new employees will join a large batch of employees from last year's growth. "In 2010, we hired more than 600 employees as part of the current expansion, bringing total employment to approximately 1,700," said Charmaine Winters, senior human resources manager at Samsung Austin Semiconductor, in a statement.

Though rumors had suggested that Apple had inked a deal with Taiwan Semiconductor Manufacturing Co. for production of the A5 chip for the iPad 2, due to concerns of increased competition with Samsung, X-ray analysis of Apple's A5 CPU in the iPad 2 confirmed that the chip was still manufactured by the Korean electronics giant.

All told, Apple is projected to purchase $7.8 billion worth of components from Samsung this year, including liquid crystal displays, mobile application processors and NAND flash memory chips, making Apple Samsung's largest customer.

AU Optronics

Update 2: AU Optronics executive vice president Paul Peng has denied rumors that the company received display orders from Apple.

Taiwanese business newspaper The Economic Daily News claims that AU Optronics, the world's No. 4 LCD maker, has received its first order for LCD screens for Apple's iPad 2, as noted by Reuters.

According to the report, the panels will sell for three to four times the price of regular panels and will represent a substantial boost in profit for AU. The size of the order could occupy more than half the production capacity at the supplier's fifth-generation plant in Taichung, Taiwan, the report noted.

Update: Shares of AU stock jumped up as much as 6 percent as investors responded positively to the rumor. Analysts, however, cautioned that the report should be taken with a grain of salt.

"I think the credibility of this news is only at 30-40 percent, mainly because of the patent authorization for the technology," said Wayne Cheng, an analyst of Primasia Securities. Patent authorization and converting a factory to the new technology could take up to a year, said another analyst.

Last September, DigiTimes reported that Apple had brought on Cando, a subsidiary of AU Optronics, to produce touch sensors for the iPad.

Touch panels were a limiting factor in production of the original iPad last year and have likely contributed to supply constraints for the iPad 2.

Supply of the iPad 2 has yet to stabilize with overwhelming demand as hopeful customers continue to line up more than two weeks after the device's U.S. launch. Though estimated shipping times for the iPad 2 from Apple's website have improved from 4-5 weeks to 3-4 weeks even as the device launched in 25 countries last week, available stock has remained limited.

Positive response to the iPad 2 has prompted several analysts to increase their sales forecasts. Charlie Wolf with Needham & Company increased his projection of iPad sales for 2011 from 20 million to 30 million. The analyst also added 10 million units to his prediction for 2012 iPad sales for an estimated total of 40 million.

"Attempting to forecast the growth trajectory of a new category of computers is difficult, if not perilous," Wolf wrote. "However, the launch of the iPad 2 so far exceeded our expectations that it was evident our 2011 and 2012 shipment forecasts were dramatically low."