The semiconductor manufacturing industry is dominated by a handful of players which are mainly concentrated in developed countries such as China, Taiwan, South Korea, Japan, and the United States. These countries tend to be more expensive to run a business due to the regulations, costly tax policies, and high wages for labor. Moreover, the industry is one of the most capital intensives in the world, with costs of setting up a new foundry or fab to be in the range of 3 to 4 billion US dollars. Majority of these expenses come down to the equipment used, wages and labor costs, as well as tax regulations in each country. With that in mind, foundries or fabs can have the option to relocate or set up their production facilities in more cost-friendly countries. Specifically in Southeast Asia, such as Malaysia, Thailand, Philippines, Vietnam, and Indonesia. From this analysis, we determined that semiconductor companies, especially pure-play foundries, should heavily consider setting up fabs in Indonesia as the most cost-effective region in Southeast Asia to set up fab.




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