I think the biggest advantage is lower payroll costs. They also want to get market share in those countries and having manufacturing there seems to help. On the downside, they have a lot of issues with exporting technology and having stable operations.
We have Non-US companies investing huge dollars in the US like Globalfoundries, Samsung (Qimonda in the past). Yes, there is Intel but I do not understand why there are not more US companies taking advantage of US state incentives like Globalfoundries and Samsung do. Beside of costs, are there better tax incentives or write-offs for going abroad?
FAB Strong perhaps not.
TI is a dinosaur in the world of manufacturing. Corporate leaderships/direction is haphazard at best as to what to do with its remaining manufacturing facilities.
TI owns mostly Very Old Fabs, and spends Very little to update them.
Of the two flagship 300mm Fabs they own, one is 14 years old running analog. The other, the Richardson Fab, is filled with used equipment from Qimonda which basically TI was forced to fill after keeping the shell in Richardson empty for years.
A US manufacturing giant at one time it looks to be extinct in the future.
You call it fab-strong but please note that TI is committed to spending just 4 percent of revenue on capital expenditure. This a comparatively low figure.
ST is expected to spend $600 million capex on revenue of $8bn to $9bn in 2013, which is about 6 to 7 percent.
Also note that the $1.7 billion, which may include a significant contribution from China or may be additional to that contribution, is spread over 15 years. $100 million per year is not aggressive. $1.7 billion is not much to spend at a wafer fab site these days although it does buy you a reasonable amout of test, assembly and packaging facilities and equipment.
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