5 ms·

With modern fabs, how much of the operating cost is labor?

cbozeman 6y ago
Its mostly equipment and design. The fab has to be extraordinarily well-protected against seismic disturbance, and the equipment is highly, highly automated. This will produce jobs, of course, and high paying ones at that, but it won't be a "game changer" for the state. That city, possibly. EDIT: Article says 1,600 for the fab when its at full capacity and "thousands indirectly", which of course means restaurants and services nearby. Looks like its going to be built north of Peoria, which puts it near Glendale, Phoenix, Tempe, Scottsdale, etc. This'll probably add jobs worth about $100,000,000 - $150,000,000 a year. Somewhere in that neighborhood. The support-based jobs probably $150,000,000 to $200,000,000. Adds another $8.5 to $28 million a year in tax revenues for the state and cities.
- mech422 6y ago
  This actually surprised me, as I would have guessed it would have been closer to Intel, to make use of infrastructure already in place.. Also, not sure how the jobs will break down, but when I was at Intel, techs actually working in the clean rooms were not making anywhere near 6 figures. They commonly told me, they were just there for the stock.
- dud7eyy4 6y ago
  I'm always surprised more American cities don't pander to host high-end factories. I don't know what just chips would do for the city, but I imagine hosting something like a Samsung phone factory in exchange for a massive local discount on the product would be a pretty nice perk for the citizens.
  - redisman 6y ago
    There was the Foxconn Wisconsin thing which seems to not really turned to much as of yet.
    - mkl 6y ago
      So far it seems to have been a bit of a con: https://www.theguardian.com/us-news/2020/dec/08/wisconsin-foxconn-factory-residents-displaced https://www.theguardian.com/us-news/2020/dec/08/wisconsin-fo...
  - ac29 6y ago
    Things like smartphone assembly aren't going to happen in the US any time soon. Not only is the labor more expensive, but essentially the entire supply chain is in eastern asia.
  - ksec 6y ago
    >I'm always surprised more American cities..... Electricity, infrastructure, Additional cost in Tax, Environment protection etc. All of these add up very quickly. It is not impossible. But it doesn't seems Government cares that much other than talking about it. There is also the close proximity with other supply chain. Where there are currently close to Zero in US.
    - dud7eyy4 6y ago
      To an extent I get what you're saying but I don't think the point is to save the city itself money, especially since that will disproportionately benefit the income groups with the highest tax burdens. The idea would be that in exchange for a loosely regulated phone factory you give locals discounts in the range of 50% on the products made there. You couldn't do it with everything but for goods that are both expensive and nigh ubiquitous like cars/motorbikes, phones, household appliances, etc. I think it could be a good value for the locals.

Its mostly equipment and design. The fab has to be extraordinarily well-protected against seismic disturbance, and the equipment is highly, highly automated. This will produce jobs, of course, and high paying ones at that, but it won't be a "game changer" for the state. That city, possibly. EDIT: Article says 1,600 for the fab when its at full capacity and "thousands indirectly", which of course means restaurants and services nearby. Looks like its going to be built north of Peoria, which puts it near Glendale, Phoenix, Tempe, Scottsdale, etc. This'll probably add jobs worth about $100,000,000 - $150,000,000 a year. Somewhere in that neighborhood. The support-based jobs probably $150,000,000 to $200,000,000. Adds another $8.5 to $28 million a year in tax revenues for the state and cities.

mech422 6y ago
This actually surprised me, as I would have guessed it would have been closer to Intel, to make use of infrastructure already in place.. Also, not sure how the jobs will break down, but when I was at Intel, techs actually working in the clean rooms were not making anywhere near 6 figures. They commonly told me, they were just there for the stock.
dud7eyy4 6y ago
I'm always surprised more American cities don't pander to host high-end factories. I don't know what just chips would do for the city, but I imagine hosting something like a Samsung phone factory in exchange for a massive local discount on the product would be a pretty nice perk for the citizens.
- redisman 6y ago
  There was the Foxconn Wisconsin thing which seems to not really turned to much as of yet.
  - mkl 6y ago
    So far it seems to have been a bit of a con: https://www.theguardian.com/us-news/2020/dec/08/wisconsin-foxconn-factory-residents-displaced https://www.theguardian.com/us-news/2020/dec/08/wisconsin-fo...
- ac29 6y ago
  Things like smartphone assembly aren't going to happen in the US any time soon. Not only is the labor more expensive, but essentially the entire supply chain is in eastern asia.
- ksec 6y ago
  >I'm always surprised more American cities..... Electricity, infrastructure, Additional cost in Tax, Environment protection etc. All of these add up very quickly. It is not impossible. But it doesn't seems Government cares that much other than talking about it. There is also the close proximity with other supply chain. Where there are currently close to Zero in US.
  - dud7eyy4 6y ago
    To an extent I get what you're saying but I don't think the point is to save the city itself money, especially since that will disproportionately benefit the income groups with the highest tax burdens. The idea would be that in exchange for a loosely regulated phone factory you give locals discounts in the range of 50% on the products made there. You couldn't do it with everything but for goods that are both expensive and nigh ubiquitous like cars/motorbikes, phones, household appliances, etc. I think it could be a good value for the locals.