Washington: While US companies often outsource jobs for lower wages, many are also going to India, China and Eastern Europe for "brain power and product ideas".

US chip makers are opening shop in far-flung places to attract prized designers, the 'Wall Street Journal' reported citing the instance of Naveed Sherwani, who literally wrote a book on designing one popular variety of computer chip and has set up a chip design centre in India for his Silicon Valley start-up.

"We didn't go to India just to reduce cost, but to increase our reliability and predictability," Sherwani, a former executive of Intel Corp, says.

Observing that the trend "raises the spectre of stiffening global competition involving innovation as well as cost", the report said the shift is particularly striking for the chip industry.

Though many American chip companies for many years kept their control of many industry segments by designing key products at home, they are now nurturing a growing pool of designers in Asia and Eastern Europe, it said.

To boost their foreign presence and get closer to customers abroad, US chip companies such as LSI Logic Corp have purchased semiconductor companies in China and India.

Talent, said the paper, is the other driver.

Intel has particularly aggressive plans for Bangalore. About 900 chip designers work there for the company.

The number one chip-maker plans to expand its technical staff there to 2,000 by 2006, at a time its US staff is not likely to grow much.