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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Bookdon who wrote (7460)	10/8/2003 5:25:36 PM
From: Big Bucks	Read Replies (1) \| Respond to of 25522

I think part of the equation is the necessity to relocate the production facilities to the largest market growth area, where the demographics and future consumer demand is greatest. The majority of the Chinese population don't have a lot of discretionary income to purchase expensive imported products but can afford to purchase inexpensively made "local" products, at prevailing prices, if the products are produced at a lower cost basis. A twist on the Supply and Demand scenario.... if the cost is cheap enough then the demand will increase...

To: Bookdon who wrote (7460)	10/9/2003 2:13:08 PM
From: gugie	Respond to of 25522

Some of the biggest considerations in locating a fab are dependable power supply, water availability, land costs, governmental incentives, cost to build the physical plant, and other infrastructure considerations and ability to attract the necessary talent to the area. Fab line labor costs are way down the list, I think. Example: AMD fab in Dresden got done because of German incentives to create jobs in the east, and power quality issues were resolved by AMD building their own power plant practically onsite that the German government eventually bought out, as I recall. Labor costs are and remain lower in the east vs. west, but this was probably less a consideration than the political climate in Saxony vs, say Bavaria, making it easier to digest.