AMD to move shipping facilities to Taiwan from Hong Kong

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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 Taiwan’s Economic Daily News. AMD currently ships its products from Taiwan to Hong Kong, from where it is then shipped all over the world. However, the report notes that increased involvement from China in Hong Kong and lower shipping costs by simply sending its products from assembly facilities to a shipping point in the same region has 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 Taiwanese Minister of Economy Wang Mei-Hua.

AMD is set to join NVIDIA and ASML in moving shipping facilities to Taiwan

According to the details, the new cargo center will be located in the Farglory Free Trade Zone in Taoyuan Municipality, Taiwan. AMD will announce after the Chinese New Year next year and join other non-NVIDIA companies such as ASML and ASUS. Both are important players in the semiconductor industry, with ASUS responsible for making boards that use chips from companies like AMD, and only ASML that can build the advanced machinery needed to make semiconductors.

However, Intel’s third-largest chip maker has no plans for a similar facility. This is because Intel does not source large quantities of products from TSMC, and most of its chips are encapsulated in Malaysia instead. The decision to move to Taiwan makes more sense for both AMD and NVIDIA since motherboard manufacturers other than ASUS, such as MSI and Gigabyte, are also based in the country.

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Changing global geopolitics has also affected the global semiconductor supply chain as companies are increasingly concerned about the costs of armed or political conflict on their supply chain. The hot topic these days is the decision of Taiwan Semiconductor Manufacturing Company (TSMC) to build a new chipmaking plant in the US state of Arizona. This plant, which is expected to enter production in 2024, will eventually start producing 5nm chips, but TSMC also plans to upgrade it to produce more advanced 3nm products from 2026.

Of course, geopolitical risks also include Taiwan due to the ongoing political tensions in the South China Sea. So, the island region isn’t the only place companies are considering expanding their cargo facilities – another region free of such concerns is Singapore.

Shipping chips directly from TSMC to the plate makers and then to the facility in Taiwan will reduce overall transportation costs. As before, assembled products were first sent to Singapore and then returned to Taiwan for sale in the local market. Moreover, the distance between Taiwan and mainland China is also low, which brings additional benefits to businesses.

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