Longtime industry watcher (and friend) Dominique Numakura notes in his newsletter this week that skyrocketing labor costs in Southeast China are pushing manufacturers further into the country. According to Dominique, labor costs in Shanghai have doubled over the past decade and prices of raw material imports have doubled or tripled.
Several companies we have spoken with have offered similar observations. Scott Kulicke of Kulicke & Soffa last year went so far as to tell us that the semiconductor equipment OEM’s relocation of a vast amount of its manufacturing to Asia has not resulted in significant cost savings. Unfortunately, I would be surprised if K&S or others that find that the grass isn’t always greener (no pun intended) are going to be moving back as quickly as they left.
Dominique publishes his newsletter by email almost every week. To be added to his list, email him at email@example.com.