Taxes drive away IC production from the U.S. - not labor costs

The Semiconductor Industry Association said that tax and incentive policies from foreign governments are the main reason why most new wafer fabs are built outside the U.S., while labor rates in foreign countries would only account for a small part.

"A dramatic shift in semiconductor manufacturing is now under way," Scalise said during testimony before the US-China Economic and Security Review Commission in Palo Alto, Calif. "Approximately two-thirds of the 300-mm wafer fabrication facilities now under construction worldwide are in Asia, with a significant portion of those facilities in China. Chinese government policies — not lower labor costs — are the principal factor in a differential of more than $1 billion in the 10-year cost of building and operating a 300-mm wafer fab in the U.S. versus China."

Currently the U.S. semiconductor manufacturers hold 47 percent of the worldwide microchip market, but only 20 percent of the new state-of-the-art production facilities are built in the U.S. The rest is mainly build in Asia.

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