[peq]

Your version still has the problem that since Java 7 the substring method allocates a new String, which in unnecessary when it is only borrowed to the parseLine function and not needed afterwards. What you probably want is a view that reuses the same underlying data. With the following I get around 2 GB/s:

    public void readString(String data) throws IOException {
        int lastIdx = 0;
        for (int idx = data.indexOf('\n'); idx > -1; idx = data.indexOf('\n', lastIdx)) {
            parseLine(subSequenceView(data, lastIdx, idx));
            lastIdx = idx + 1;
        }
        parseLine(subSequenceView(data, lastIdx, data.length()));
    }

    CharSequence subSequenceView(CharSequence base, int beginIndex, int endIndex) {
        return new StringView(base, beginIndex, endIndex - beginIndex);
    }

    static class StringView implements CharSequence {
        final CharSequence base;
        final int offset;
        final int length;

        StringView(CharSequence base, int offset, int length) {
            if (length < 0) throw new IllegalArgumentException("length must be >= 0");
            this.base = base;
            this.offset = offset;
            this.length = length;
        }

        @Override
        public char charAt(int n) {
            if (n < 0 || n >= length)
                throw new IndexOutOfBoundsException(n);
            return base.charAt(offset + n);
        }

        @Override
        public int length() {
            return length;
        }

        @Override
        public CharSequence subSequence(int beginIndex, int endIndex) {
            return new StringView(base, offset + beginIndex, endIndex - beginIndex);
        }
    }