The Great Silicon Sucking Sound

The Semiconductor Industry Association reported this week that 2004 is looking good, with shipments this in January up 26.6% over a year earlier. Of particular interest to those of us here in the Hutong, the SIA noted that the Asia-Pacific region was up 34% thanks primarily to China.

While this is not terribly surprising, given the growing concentration of manufacturing in China, it is growing evidence that the strategies followed by Intel, TSMC, RFID, and a host of other semiconductor firms to build capacity in China is likely driven far more by a shift in the center-of-gravity in the semiconductor market worldwide than in any effort to capture savings in inputs.

It also calls into question the recent decision by Motorola to cast aside their chip business in China. Was this a move too soon?