Infrastructure Investing

Infrastructure Investing is breaking down a leading technology company's product or service components and pinpointing who their suppliers are and then analyzing those suppliers and if those suppliers meet your investment risk tolerance, investing in those suppliers.

Take as an example the wonderful smartphone product from Apple, Inc. who owns the very popular iPhone that is perhaps the most popular selling smartphone worldwide. What do we know about the suppliers of the iPhone? Well, we may or may not know that the iPhone is manufactured by Foxconn of Taiwan, but what makes the iPhone unique is its digital ecosystem, such as its operating system, iOS and the 200,000 plus applications (apps) available.

A cadre of companies supply the iPhone:

• Broadcom Corporation (NASDAQ: BRCM), Supplies the iPhone's GPS chipset.
• Balda AG (ETR:BAD), Manufactures the scratch-resistant, multi-touch sensitive control modules that give its touchscreen magical-like behavior when you interact with the screen.
• Infineon Technologies AG (ADR) (Public, PINK: IFNNY), supplies the iPhone's baseband, which is the core chipset to handle voice and data.
• Intel (NASDAQ: INTC), makes the Nor Flash Chips which makes the iPhone system software easy to update.
• Samsung Semiconductor (Private), makes the integrated circuit for the video processors.
• Sharp (ADR) (PINK: SHCAY) & Sanyo Epson (aka, Wolf Microelectronics PLC) (LON: WLF), supplies the display.
• Skyworks (NASDAQ: SWKS), makes the mobile radio amplifier.
• Micron Technology Inc. (NASDAQ: MU), makes the CMOS chip.
• Cambridge Silicon Radio (CSR PLC) (LON: CSR), makes the bluetooth Chip.
• Taiwan Semiconductor Manufacturing Company (TSMC) (ADR) (NYSE: TSM), the world's largest contract chip company by revenue makes the chip for the iPhone.
• United Microelectronics Corporation (UMC) (ADR) (NYSE: UMC) is the second largest contract chip company in the world also makes iPhone chips.
• National Semiconductor (NYSE: NSM) & Novatek Microelectronics Corporation (TPE: 3034), make the iPhone's display driver chip.
• Quanta Computer (TPE: 2382), assembles the iPhone & will be making RIM"s tablet computer, "BlackPad."
• Foxconn (ADR) (PINK: FXCNY), also assembles the iPhone, Wii, Playstation & Apple's ipod Touch.
  

This is the key to investing in the infrastructures that make up the most highly-sought after products today and if you go with a balance of the dominant manufacturers in their industry or niche, you will be okay, but for the truly spectacular margins, have a look at the rising technology manufacturers. As always, do your due diligence and profit from your understanding!