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Electronics Production | April 25, 2005

Taxes driving chipmaking offshore

Only 20 % of today's new state-of-the-art manufacturing sites that are under construction are located in the US. Though US still have about 47% of the global chipmarket.
According to SIA (Semiconductor Industry Association) it is not necessarily lower labor costs that drives the chipmaking offshore. The main reasons why the majority of the new manufacturing sites are built outside the United States are lower tax rates and incentives that gives a cost reduction of holding capital i other countries. It is therefore needed for the gouvernments to act in the struggle to keep the jobs. “Approximately two-thirds of the 300mm 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 300mm wafer fab in the U.S. versus China,” said SIA President George Scalise. “Government incentives such as favorable tax treatment and other assistance programs account for approximately 90 percent of the cost differential. Like it or not, the reality is that government incentives play a major role in where investment takes place. Given the critical importance of semiconductors in driving U.S. economic growth and ensuring our national security, maintaining a competitive semiconductor manufacturing capability and a supporting ecosystem must be an important priority for America’s federal and state governments”, said Scalise.
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December 12 2018 10:05 pm V11.10.12-2