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I'm all for redistributing fab capacity geographically. But I thought it became concentrated in Asia because of the lower cost for high quality engineers due t

I'm all for redistributing fab capacity geographically. But I thought it became concentrated in Asia because of the lower cost for high quality engineers due to LCOL. How will Intel change this equation to make it profitable in other geographic regions?

stanislavb 6y ago
I guess that if the US gov begins offering skilled VISAs, that’d help.
phone8675309 6y ago
>How will Intel change this equation to make it profitable in other geographic regions? Let me introduce you to this little thing called an H1B visa...
JumpCrisscross 6y ago
What fraction of a fab’s costs are labour today versus twenty years ago?
tantalor 6y ago
Cost of living is 20% lower in San Jose, Costa Rica (location of Intel manufacturing plant) compared to TSMC in Taiwan.
- WrtCdEvrydy 6y ago
  Yeah, it's not cost of living, it's that everything is there... it's a chicken-egg because even if you move the physical fab, everything you need still needs to be transported or you need to convince people to move with you. This isn't a one year project, this could be a 25 year project to get the entire pipeline from raw resource to a piece of silicon.
- totalZero 6y ago
  There are some problems with doing business in Latin America. Corruption (which manifests itself as bureaucracy that can commonly be accelerated by greasing palms) and taxation are both fairly high in many places. It's not all about how much you pay your workers. In my opinion the potential for a greater Pan-American economy is the number one counterargument to Chinese global dominance. We have almost everything we need, right here in the Americas. https://www.tmf-group.com/en/news-insights/business-culture/top-challenges-taiwan/ https://www.tmf-group.com/en/news-insights/business-culture/... https://www.tmf-group.com/en/news-insights/articles/2018/june/challenges-business-in-costa-rica/ https://www.tmf-group.com/en/news-insights/articles/2018/jun...
  - mamon 6y ago
    Corruption actually makes doing business EASIER for a company with stockpiles of cash. It can even help you avoid taxes. So it is not a problem, it's an opportunity.
    - outworlder 6y ago
      To an extent. There's a threshold where it becomes near impossible to do business. I've seen laptops intended for employees... "disappearing" in customs. When a complaint was made, the reply was to not make a fuss, otherwise more laptops would sprout legs and run away. Corruption also tends to come with lots of bureaucracy. At every level you have palms to grease. Things tend to take a while unless said palms (which sometimes change often) are properly and generously greased. Then you have different government agencies competing to get the... "funding" - and your company is caught in the crossfire. Good luck getting the components you need imported in a timely manner. That is, until you have finished setting up your... uh, "supply chain"? Which can take a while, because it's obviously all behind the scenes. Hope you have a good "guide". In the end, you have a government that's working _against_ your company. They will (ironically enough) want to extract maximum value from you and your company. If the place is bad enough, your competitors won't be playing in a fair field either. It's not only how much you can offer, but who you know and what sort of dirt you have on them. When corruption is really high, neither the police or the justice system will be fair to you. You better hope you have identified everyone that needs palm lubrication - otherwise, you know that particular judge you forgot about? Your competitor has them in their pocket. Since the police in really corrupt places tend to be ineffective, another way a competitor can cripple your operations is to make you vanish. If it is a place where violent crime is common(not a bad assumption), then it was just another unfortunate statistic. You don't really want that kind of "opportunity". It's not worth it to decrease taxation. If anything, you will be taxed just as much, except that's now off the books. Not only you need stockpiles of cash, but you also need to understand the dynamics of the place you are trying to get into. Otherwise, you are just a wealthy(and clueless) mark. Of course, said company would have to be based entirely in the target country. It couldn't be US-based with a foreign branch, otherwise anti-corruption laws would apply. Source: born in a pretty corrupt country. Seen a fair amount of shady crap. Trust me, you don't want to deal with that stuff.
dragontamer 6y ago
USA has some of the lowest cost of energy / electricity in the world and one of the best rail-freight systems in the world. Our passenger rail sucks and our people are expensive. But significant manufacturing remains in the USA (yes, we manufacture more today than ever before, despite the hoopla about outsourcing). There's a reason for that: USA has some pretty good advantages if you know what to look for.
- formerly_proven 6y ago
  I (we... us Europeans) often make fun of the US but when shit hits the fan the US often seems to be quite a bit better at actually getting stuff done.
  - dragontamer 6y ago
    I mean... only when we (Americans) feel like getting things done. A lot of it is just arguing with ourselves over what to do. But if a consensus is reached, Americans can get it done pretty quickly. There's just so much discussion / debate / noise now.
  - KptMarchewa 6y ago
    You can always count on Americans to do the right thing - after they've tried everything else. Can't wait for when US will finally go 110% on green energy and dumping fossils.
  - Zevis 6y ago
    I'd say that's one of the reasons why Europeans are so unhappy with the US. I know I am. They have so much potential to get shit done, but they squander all of that potential.
    - fermienrico 6y ago
      Come over and join us. We need some help with social policies of Europe and getting rid of the stupid ass imperial measurement system.
  - 6y ago
UncleOxidant 6y ago
Labor costs in a modern fab are a pretty small part of total costs. The fab construction itself as well as filling it with semiconductor manufacturing equipment (like those ASML EUV lithography machines) swamp labor costs.
Zevis 6y ago
Taiwan and Japan being the giants in the field is due to one thing only: Government policy. Both governments invested heavily in research labs, universities and industry (TSMC was a joint government-Philips venture), setting them up for where they are now. Cost of living isn't relevant here.

stanislavb 6y ago

I guess that if the US gov begins offering skilled VISAs, that’d help.

phone8675309 6y ago

>How will Intel change this equation to make it profitable in other geographic regions? Let me introduce you to this little thing called an H1B visa...

JumpCrisscross 6y ago

What fraction of a fab’s costs are labour today versus twenty years ago?

tantalor 6y ago

Cost of living is 20% lower in San Jose, Costa Rica (location of Intel manufacturing plant) compared to TSMC in Taiwan.

WrtCdEvrydy 6y ago
Yeah, it's not cost of living, it's that everything is there... it's a chicken-egg because even if you move the physical fab, everything you need still needs to be transported or you need to convince people to move with you. This isn't a one year project, this could be a 25 year project to get the entire pipeline from raw resource to a piece of silicon.
totalZero 6y ago
There are some problems with doing business in Latin America. Corruption (which manifests itself as bureaucracy that can commonly be accelerated by greasing palms) and taxation are both fairly high in many places. It's not all about how much you pay your workers. In my opinion the potential for a greater Pan-American economy is the number one counterargument to Chinese global dominance. We have almost everything we need, right here in the Americas. https://www.tmf-group.com/en/news-insights/business-culture/top-challenges-taiwan/ https://www.tmf-group.com/en/news-insights/business-culture/... https://www.tmf-group.com/en/news-insights/articles/2018/june/challenges-business-in-costa-rica/ https://www.tmf-group.com/en/news-insights/articles/2018/jun...
- mamon 6y ago
  Corruption actually makes doing business EASIER for a company with stockpiles of cash. It can even help you avoid taxes. So it is not a problem, it's an opportunity.
  - outworlder 6y ago
    To an extent. There's a threshold where it becomes near impossible to do business. I've seen laptops intended for employees... "disappearing" in customs. When a complaint was made, the reply was to not make a fuss, otherwise more laptops would sprout legs and run away. Corruption also tends to come with lots of bureaucracy. At every level you have palms to grease. Things tend to take a while unless said palms (which sometimes change often) are properly and generously greased. Then you have different government agencies competing to get the... "funding" - and your company is caught in the crossfire. Good luck getting the components you need imported in a timely manner. That is, until you have finished setting up your... uh, "supply chain"? Which can take a while, because it's obviously all behind the scenes. Hope you have a good "guide". In the end, you have a government that's working _against_ your company. They will (ironically enough) want to extract maximum value from you and your company. If the place is bad enough, your competitors won't be playing in a fair field either. It's not only how much you can offer, but who you know and what sort of dirt you have on them. When corruption is really high, neither the police or the justice system will be fair to you. You better hope you have identified everyone that needs palm lubrication - otherwise, you know that particular judge you forgot about? Your competitor has them in their pocket. Since the police in really corrupt places tend to be ineffective, another way a competitor can cripple your operations is to make you vanish. If it is a place where violent crime is common(not a bad assumption), then it was just another unfortunate statistic. You don't really want that kind of "opportunity". It's not worth it to decrease taxation. If anything, you will be taxed just as much, except that's now off the books. Not only you need stockpiles of cash, but you also need to understand the dynamics of the place you are trying to get into. Otherwise, you are just a wealthy(and clueless) mark. Of course, said company would have to be based entirely in the target country. It couldn't be US-based with a foreign branch, otherwise anti-corruption laws would apply. Source: born in a pretty corrupt country. Seen a fair amount of shady crap. Trust me, you don't want to deal with that stuff.

dragontamer 6y ago

USA has some of the lowest cost of energy / electricity in the world and one of the best rail-freight systems in the world. Our passenger rail sucks and our people are expensive. But significant manufacturing remains in the USA (yes, we manufacture more today than ever before, despite the hoopla about outsourcing). There's a reason for that: USA has some pretty good advantages if you know what to look for.

formerly_proven 6y ago
I (we... us Europeans) often make fun of the US but when shit hits the fan the US often seems to be quite a bit better at actually getting stuff done.
- dragontamer 6y ago
  I mean... only when we (Americans) feel like getting things done. A lot of it is just arguing with ourselves over what to do. But if a consensus is reached, Americans can get it done pretty quickly. There's just so much discussion / debate / noise now.
- KptMarchewa 6y ago
  You can always count on Americans to do the right thing - after they've tried everything else. Can't wait for when US will finally go 110% on green energy and dumping fossils.
- Zevis 6y ago
  I'd say that's one of the reasons why Europeans are so unhappy with the US. I know I am. They have so much potential to get shit done, but they squander all of that potential.
  - fermienrico 6y ago
    Come over and join us. We need some help with social policies of Europe and getting rid of the stupid ass imperial measurement system.
- 6y ago

UncleOxidant 6y ago

Labor costs in a modern fab are a pretty small part of total costs. The fab construction itself as well as filling it with semiconductor manufacturing equipment (like those ASML EUV lithography machines) swamp labor costs.

Zevis 6y ago

Taiwan and Japan being the giants in the field is due to one thing only: Government policy. Both governments invested heavily in research labs, universities and industry (TSMC was a joint government-Philips venture), setting them up for where they are now. Cost of living isn't relevant here.