Apple arguably does have factories to build, given how utterly dependent on China it is.
But the bigger scare of TI being acquired is that they are a major manufacturer of commodity components and Apple is a vertically integrated consumer electronics business. It would be devastating to American semiconductor marketplace if their portfolio was no longer available.
The problem is that Dallas (and other areas) have been sucked dry of talent by tech companies for a while - even before the conservative economic policies you're handwaving about came into effect. Some of that is on the state for not being competitive enough, other parts of that have been on predatory practices by businesses that fuel things like state to state income inequality.
Second, I don't need to be told what to be afraid of, so your condescending tone can take a listening stance. A software engineer in Dallas Texas doesn't make near the cost of living difference between a San Francisco job while doing the same thing and that is a problem. Full stop.
That problem can be remedied by bringing more tech businesses to Texas and gating them out of the traditional coastal areas like New York, SF, Seattle, and Portland. There are other ways of remedying the problem and I'd love to hear them, but finger pointing at the Texas government without pointing at companies and other states sounds pretty fruitless.
Why is that a problem? Do you feel that the same gap needs to be closed globally, or just within the US?
> finger pointing at the Texas government without pointing at companies and other states
I don't think anyone is finger pointing at the Texas government while ignoring companies and other states. GP is saying that Texas is doing thing X, coastal states are doing thing Y, leading to companies (and engineers) choosing the coastal states because they prefer Y.
I'm sure you'd find it problematic if you're forced from an area just because of geo-pay. I can't build that kind of empathy for you though, you'll need to go find it.
Nice whatabboutism on the second part. Yes, I think it needs to be closed on both. These companies produce digital products, not geographically sold ones. The contribution of an engineer in one place is the same as another, as long as the impact is the same.
> GP is saying that Texas is doing thing X, coastal states are doing thing Y, leading to companies (and engineers) choosing the coastal states because they prefer Y.
That's pretty much longer form of what I just said. The state can do things differently, but the state isn't even all or most of the answer. A lot of it has to do with wage suppression, which I covered above.
Edit: I realize I come off a bit salty about this. I am. I am not conservative and this problem has personally impacted me. It's annoying to hear people speak about this with such utter lack of empathy, or rather that their political ideology comes shining through, but I get to most people it's probably just Tuesday.
> A lot of it has to do with wage suppression
This is where I get a bit confused. Why would companies artificially push engineers to the areas where they command these disproportionately large salaries? Are you saying that they overpay engineers in general specifically to suppress wages of engineers that _are_ in Texas?
The problem is that an engineer, doing the same job, in a state that is wage suppressed can only retire in a state with even lower cost of living. When you have engineers in coastal areas on average making ridiculous sums over their counterparts in other states when nearly all the products are subject to the same taxes and distribution pipeline that begins to sound a bit problematic, don't ya think?
The problem largely lies in reward structure: coastal engineers tend to get a lot more in terms of RSUs but will get similar cash compensation. When you add inflation and home prices (which are savings vehicles) on top it compounds the problem into what we have today. As I said, some is on the state, some is on companies.
The net outcome is that an engineer retires from SF, can move anywhere they want but picks Texas. They buy a house in cash, most likely beating out native Texans and drive the cost of goods up while salaries remain low. They live like kings while the people who actually built up a community and contributed taxes to the state get priced out. This whole paragraph is just paraphrasing state-to-state income inequality though, feel free to read up on it's effects.
> Why would companies artificially push engineers to the areas where they command these disproportionately large salaries?
Because now that this paradigm exists it's rife for exploitation. Companies will pay engineers in Texas without giving them the same RSUs as their coastal counterparts. That's a savings. So sure, they pay people in SF more but they pay everyone else substantially less (beyond cost of living differences). Therein lies the rub.
When I worked in Texas there was a lot of outsourcing, but usually it's because there's not enough talent in the area to meet demand. It's a cyclical effect, which is what irritates me about coastal folks trying to deny their states and companies have participated in that process.
Lusting after California salaries is a losing game when the salaries are inflated to pay for high taxes and artificially high home prices driven by a chokehold of regulations on new home building.
https://www.thecentersquare.com/california/list-of-companies...
Bonus if far enough North to avoid freeze issues!
Unlike most if not all other companies that outsource manufacturing. Apple still has the known how and detail view in not only the factory but the whole supply chain. They could, should they choose to, instantly assemble everything by themselves.
Compared to other companies, they are making design changes and working with contract manufacture, but they have no idea how those machines in production actually works.
Buying Semi or Fabs also doesn't make sense unless they intend to Fab for others.
They can't "instantly" assemble everything by themselves at the scale they need, because almost all their infrastructure and supply chain for that is located in China. My bet is that it would take them on the order of a decade to build up alternate infrastructure and supply changes, and that's assuming the detailed knowledge they have about their processes.
This is an interesting article about how Apple's dependence has played out: https://www.nytimes.com/2021/05/17/technology/apple-china-ce....
That said, Apple have a hell of job turning $200bn into factories.
The scale of money, currently... is quite something to live up to.
The way I see it, Amazon, as a growth machine, keeps its growth options (organic/inorganic) open and when sees an opportunity for inorganic growth they will go for it. The most recent example being their acquisition of Whole Foods. They were anyway investing in growing their brick-and-mortar presence and opportunistically acquired Whole Foods to fast-track it.
Relatedly, Amazon has to be one of the most diverse corporations ever. From AWS to media studio. Which other corporations come close?
Yamaha's logo is three tuning forks. Always cracks me up seeing that on a dirtbike.
That is the exact problem Steve Yegge described [1]. Americans has a world view that equals to America. Amazon doesn't even compare with Samsung in vertical integration.
And in terms of diversity, it doesn't even need to be Korea Chaebol, dozens of other East Asia conglomerate are way more diverse than Amazon.
[1] https://steve-yegge.medium.com/hurricane-china-how-to-prepar...
2021 Amazon has AWS, which is hugely cash generative... hence the growing cash balance. They can't invest faster than it accumulates. Financially, they're like Apple, Google, Etc. now.
Also, "capital intensive" is relative. Warehouse's investment numbers tend to be publicized, because politics. A big one is $200m, and that's a "media story" number which may be higher than the real, "capital investment" amount.
Company valuations are one thing, but $10bn is a lot of capital. It's hard to actually invest that much. That's why the big software companies have so much of the damn stuff.
I like the insight. What you are saying is that liquidity needs to get much deeper to account for all the currency made available and consolidated.
Costco is a good example of how to treat workers.
Define "livable" in the context of wages
Am I missing something? The latest Amzn 10-Q shows $45B of “Purchases of property and equipment” $11B in lease principal payments in the past year. That’s on the $42B cash on hand and $26.9B net income. Cash flow and capital investment seems like the crank Amazon has been turning for 20 years?
Why only consider acquisitions over $1 billion though? They have quite a few $250 million+ acquisitions that were pretty big or key players in their respective niches.
Google has had Youtube, DoubleClick, Android, Motorola, Nest, HTC, Nest, Looker, Fitbit, Waze... and that's just what I remember.
Facebook has had at least Instagram, WhatsApp and Oculus, but they've been around close to two decades less.
For a company of Amazon's scale, it's lack of acquisitions is relatively surprising.
Whether or not they pay dividends or buy back stock, the average net is large. That's why they've accumulated these record busting sums.
That being said, it does seem like equity markets are in a bubble. Tesla at least is absurdly overvalued. If i had signifcant stake in TSLA I would be getting out asap and let someone else hold on to shares that are probably 300% overvalued.
Then they weren't.
The argument for Tesla, much like Uber, is that they are going to figure out the rest. It's really almost a faith based investment, either way.
What about data centers?
$9bn is 0.5% of AMZN's current market cap, so $9bn represents a daily price fluctuation. They also have $45bn in cash reserves, so amazon could buy 5 MGMs without borrowing or issuing stock.
That's not even a lot! Apple, Google & FB have $200bn, $140bn & $65bn respectively. Dividends don't seem to be a thing, and it's basically impossible to invest this much cash internally. These companies don't have factories to build, or any kind of hard capital investments to make. Even an epic, blue sky cash sink like Waymo isn't capable of burning through their available capital, nevermind credit. Large capital investment at meaningful scale is not part these companies' culture, or competencies.
Acquisition is the only thing they can do, besides buying bitcoin and vanguard. Meanwhile, acquisitions bid up prices and exasperate the scenario further.
Morals and regulatory potential aside, does it not make sense for Tesla to buy and bury one or two major auto manufacturers? Ford is worth $50bn, GM is $80bn. Tesla is $600bn. Why bother competing?
^I'm purposely overstating, to make the provocative point... especially in regards to Tesla, who have no cash and other ways of doing capital investment anyway. Obviously, there is debt financing and other factors that complicate all of this.