19
October
2010
|
01:18 PM
America/Los_Angeles

Intel's $8bn Investment Shows Labor Costs Aren't An Issue In Advanced Fabs

Today's announcement that Intel will invest $8 billion in new chip fabs in Arizona and Oregon is part of a trend that brings back more chip manufacturing to the US. It's because labor costs are not a factor in chip production.

Dean Takahashi at Venturebeat reports that:

Intel noted that it generates three-fourths of its revenue overseas while keeping three-fourths of its microprocessor manufacturing in the U.S.

Intel used to site new chip facilities abroad but that was when labor costs were a significant factor in the production of chips. Today's massive fabs are highly automated. Intel estimates that its $8 billion investment will generate 800 to 1,000 jobs. That's about $10 million per job created.

It shows that as factories become ever more advanced, in other areas of our industrial society, labor costs will become a smaller factor in production of many products and services.

Another thing worth noticing is the importance of Oregon to Intel, its single largest concentration of people and facilities. The company runs its own air-shuttle between Portland and its Silicon Valley HQ.

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Intel Manufacturing