Yes, but you amortize the cost of the tooling out over the lifetime of the tooling, and you're paying on a loan for that. Labor is an ongoing, and increasing co

Yes, but you amortize the cost of the tooling out over the lifetime of the tooling, and you're paying on a loan for that. Labor is an ongoing, and increasing cost, not just wages, but also insurance, payroll taxes, etc. Also remember the tooling is a fixed cost, it'll cost you (many) millions in Taiwan the same as it will in Japan or the US, so the cost of skilled labor is what ultimately affects your margins.