Reply to post: Ab Fab economics

Cheap NAND nasty: Flooding market with chips threatens prices

Pen-y-gors Silver badge

Ab Fab economics

I notice that all these new FABs seem to be in and around Eastern Asia. As I understand it, these are plants that cost billions to build but need relatively few people working in them. I can understand businesses that rely on heavily manual processes siting their factories in areas with generally low costs and easily-available child- and slave-labour, but do wage costs make that much difference on something like a FAB? Presumably only a small proportion of the construction costs can be attributed to local wage rates?

So how does the economics work? Why not build more plants in the EU and US to reduce risks of trade war problems? Or is it that the bulk of their output will actually be used in products made in Eastern Asia?

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