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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Bookdon who wrote (7569)	10/17/2003 2:12:58 AM
From: rhering	Read Replies (2) \| Respond to of 25522

I do not think there is much manufacturing left in Silicon Valley even now. All the Fabs are gone, and even AMAT has moved all assembly operations to Austin. But it is very doubtful that any US semi-equipment company would move manufacturing offshore. Individual product components that are reasonably static in their design will always be potential targets for low cost outsourcing (software, pumps etc...), but in terms of offshore semi-equipment assembly it is just not practical. The principle driver for these assembly operations tends to be the availability of local suppliers and tight change control integration with the product engineering design units. The majority of the product cost is material. Labor cost tends to be a rounding error on the overall cost of the product. The high degree of product change makes decentralizing manufacturing to be close to the customer counter productive for a global semi-equipment company. It is closeness to design engineering that chip manufacturers need. This is typically handled by large account teams that are co-located with the customer Fabs. These teams feed back information to the product design units. /rhering