Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

You Won’t Believe Where They’re Building 80% of the World’s PC Chips

Companies / Tech Stocks Jan 17, 2015 - 10:38 AM GMT

By: Money_Morning


Michael A. Robinson writes: This year, 80% of the chips for new PCs will be produced in Silicon ValleyTaiwanChina‘s Shenzhen ProvinceSouth Korea

Wrong on all counts.

More and more of today’s chipmakers locating their manufacturing facilities a bit off the beaten path these days – in one of the world’s fastest-growing economies… and a nation that some of you may find controversial.

But my job is to take you wherever the biggest innovations are being made so that we can find the biggest opportunities. So, today I’m going to show you exactly where so many of world’s top tech companies are headed.

And then I’m going to share with you a U.S. tech leader whose operations there are a key reason why its stock is crushing the market’s returns…

Intel Inside… Vietnam

Many investors might be tempted to steer clear of Vietnam because of the way the U.S. conflict ended there and the political upheaval it caused back home.

As someone who’s kept an eye on this controversial nation for more than 40 years, I believe that’s a lot of noise. And you know what Rule No. 2 says about that – “separate the signal from the noise.”

Vietnam is an economy that boasts impressive economic growth, and that offers tech investors many hefty and growing opportunities.

Gross domestic product in 2014′s third quarter grew 6.19% from a year earlier. And for the first nine months of last year, industrial output grew 6.7%, and exports rose 14.1% from a year earlier to $109.6 billion.

Many of those exports are the microchips that we so often invest in here at Strategic Tech Investor.

As I said above, 80% of this year’s central processing units (CPU) for PCs will be made not just in Vietnam, but in a single location – Saigon Hi-Tech Park.The sprawling facility sits just off Hanoi Highway less than 10 miles from Ho Chi Minh City, the nation’s capital.

The plant that will produce all these chips is owned by Silicon Valley legend Intel Corp. (Nasdaq: INTC), the company I want to tell you about today.

Intel is not only the world’s leading PC chipmaker, with its flagship Haswell CPU product. It’s also long been a leader in Vietnamese tech production. Intel Vietnam‘sCPU line is the latest addition to a major testing and production plant that broke ground back in 2006.

The plant is rapidly ramping up production. In early 2014, Intel opened a new line for another of its signature products, the system-on-a-chip (SoC). That unit is making chips for smartphones and tablets and was on pace to make roughly 40 million SoCs last year.

When Intel started up its Vietnam operations back in 2006 with an investment of $300 million. The company more than tripled that amount to $1 billion just one year later.

Locating in Vietnam was a good strategic move for Intel – one that is really starting to pay off.

Roughly the size of six football fields, Intel Vietnam began production in only 2010. And in 2014, it already accounted for a stunning $1.8 billion in exports.

Intel is taking advantage of Vietnam’s production and labor costs, much lower than those in South Korea and China.

Vietnamese labor costs are about one-third those of China. And Vietnam borders China, giving Intel and other global tech firms with operations there easy access to the world’s largest market.

No wonder that as of the middle of 2014, the latest period for which there are statistics, Vietnam boasted some 16,300 foreign direct investment projects worth a combined $238 billion.

The investors come from 100 countries in all, and several are big Asian tech firms following Intel’s lead. These include:

  • Samsung Electronics Co. Ltd. (OTC: SSNLF): The South Korean giant recently announced plans for a new $3 billion smartphone operation. It joins a $2 billion Samsung plant already located there and employing 16,000 people.
  • LG Electronics: As part of a $1.5 billion investment, the South Korean company is building a 4.3 million-square-foot assembly plant to make televisions, appliances and smartphones.
  • Panasonic Corp. (OTC ADR: PCRFY): The Japanese electronics giant and lithium-ion battery manufacturer is opening a new unit to expand production of wiring devices and circuit breakers.

Why Intel Rules

While those three Asian companies are interesting, Intel is the best way to invest in Vietnam’s growth and burgeoning tech sector.

The Santa Clara, Calif.-based remains a dominant global supplier of semiconductors, with facilities in China, Israel, Ireland and Malaysia.

Moreover, Vietnam’s low-cost structure boosts Intel’s bottom line at a time when PC sales have stabilized. Gartner notes PC sales will hit a two-year breakeven point at the end of 2015, when the forecasting firm is projecting global shipments of 316.7 million PCs.

Yesterday, Intel reported revenue of $14.7 billion for the fourth quarter, meeting its own guidance. The company’s gross profit margins came in better than expected. While not spectacular, it was a solid report.

And don’t forget: Intel is revamping operations to focus on the high-growth sectors of mobile and wearable tech.

In mobile, Intel is particularly focused on low-power, high-performance chips for tablets. The company wants to sell 40 million a year, four times what it sold in 2013.

With wearable tech, a market growing by more than 70% a year, Intel has unveiled two devices. One is a pair of earbuds for fitness tracking and the other is a “smart” headset that works as a voice-controlled digital assistant.

With a market cap of $181 billion, the stock trades at $37.55 a share. It has operating margins of 27% and a return on equity of 19%. Last year, it generated more than $8 billion in free cash flow.

This helps explain why Intel shares gained 46% over the past year. That’s more than three times the Standard & Poor’s 500 Index‘s 13.4% gains in the period.

Longtime readers of Strategic Tech Investor have done very well with Intel. Since we first recommended it in July 2013, you’ve made 50% gains on your shares.

Thus, with Intel we get the best of both worlds. As I’ve been saying, this is a savvy play on fast-growing Vietnam and its budding tech industry.

But it’s also a rock-solid investment in an iconic American company that is benefitting from long-term demand for semiconductors in PCs, tablets and smartphones.

Add it all up and you have the makings of an excellent foundational play.

With so many factors pushing it forward, Intel is a great stock to hold for the long haul.

Source :

Money Morning/The Money Map Report

©2014 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email:

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules