Outsourcing as a chain reaction

For years IBM, Hewlett-Packard, Motorola and Microsoft has handed over manufacturing of many of their products to contract manufacturers like Flextronics International. The following article (link here) in the leading newspaper Forbes, outlines how now they are also outsourcing some of their activities in order to keep competitive. I think it is a trend you cannot stop, in fact, a chain reaction.

According to the article, Flextronics has a software development center in Bucharest and has 250 developers in Kiev, Ukraine. “Wages in these countries are about $1 an hour, half that of the wages in India.� says Flextronics Chief Executive Michael Marks .

While it sounds good, i don’t endorse this as a fact, as I don’t know anyone, working in Romanian IT sector, to earn that low. Not much higher as well, but for sure not 1$ an hour.

Staying in the same domain, I would add that Catalyst Semiconductor (CATS on NASDAQ, another leading supplier of high performance analog and mixed-signal solutions and nonvolatile memory products) has also a development center in Romania operating already for a year, and for sure there are others yet i don’t know.