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Chipmaker Advanced Micro Devices, Inc (AMD) will move its logistics center from Hong Kong to Taiwan, according to a report from the Taiwanese publication Economic Daily News. AMD currently ships its products from Taiwan to Hong Kong, from where they are then shipped all over the world. However, the report suggests that increasing interference from China in Hong Kong and a reduction in shipping costs through simply sending its products from the assembly facilities to the shipping point in the same region have motivated AMD to follow in NVIDIA's footsteps. NVIDIA moved its logistics center to Taiwan earlier this year as well, with the decision announced by Taiwan's Economic Minister Wang Mei-Hua.
AMD Set To Join NVIDIA And ASML In Moving Shipping Facilities To Taiwan
According to the details, the new shipping center will be located in the Farglory Free Trade Zone in Taiwan's Taoyuan municipality. AMD will announce after the Chinese New Year next year and join other companies apart from NVIDIA such as ASML and ASUS. Both are important players in the semiconductor industry, with ASUS responsible for manufacturing the boards that use the chips from companies like AMD, and ASML being the only one that can build the advanced machines required to make semiconductors.
However, the third - and largest - chipmaker Intel has no plans for a similar facility. This is because Intel does not secure high amounts of products from TSMC, and most of its chips are packaged in Malaysia instead. The decision to move to Taiwan makes more sense for both AMD and NVIDIA since major board manufacturers apart from ASUS, such as MSI and Gigabyte, are also located in the country.
Changing global geopolitics have also affected the global semiconductor supply chain as firms are increasingly worried about the costs of an armed or political conflict on their supply chain. The hot topic these days is the Taiwan Semiconductor Manufacturing Company's (TSMC) decision to build a new chipmaking plant in the U.S. state of Arizona. This plant, which is expected to enter production in 2024, will eventually start producing 5-nanometer chips, but TSMC also plans to upgrade it to make the more advanced 3-nanometer products from 2026.
Naturally, the geopolitical risks also involve Taiwan due to constant political tensions in the South China Sea. Therefore, the island region is not the only place where companies are considering expanding their shipment facilities—another region, free from such concerns, is Singapore.
Shipping the chips directly from TSMC to the board makers and then to the facility in Taiwan will also reduce overall transportation costs as previously, the assembled products were first sent to Singapore and then returned to Taiwan to be sold in the local market. Furthermore, the distance between Taiwan and Mainland China is also low, providing added benefits to the companies.