Leaders of the American semiconductor industry are putting their resources closer to the gadget manufacturing centers in China. The only questions in my mind are:
- What took them so long? And...
- When will the other giants join the party?
In separate releases over the past week, chip stalwarts Advanced Micro Devices
Both of these moves make eminent sense. Captive manufacturing capacity is a point of pride and business strength for TI, and why wouldn't you want to churn out semiconductors right next to the massive Foxconn and Nam Tai Electronics
For AMD, a second research hub in China focusing on advanced areas like triple-network convergence and supercomputing provides tax-efficient access to massive workforce of top-notch engineers, which is exactly what the company needs in order to stay competitive to market bully Intel
It's a different situation for information-based businesses, but for hardware companies like Intel, AMD, and TI, knitting close ties to China is an obvious strategy with equally obvious efficiency benefits. It's kind of like setting up your bowls of flour, egg, and bread crumbs next to the stove before you pan-fry your pork chops or halibut filets.
Are TI and AMD smart for jumping across the Great Wall or stupid for not moving there faster? Discuss in the comments below.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. Intel is a Motley Fool Inside Value pick. NVIDIA is a Motley Fool Stock Advisor recommendation. Nam Tai Electronics is a Motley Fool Global Gains selection. Motley Fool Options has recommended buying calls on Intel. The Fool owns shares of Intel and Texas Instruments. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.