Is this really surprising as the biggest foundries are in Taiwan, so a large chunk of any country's fabless manufacturing will end up there. I just pulled open a Huawei 3G to USB router and saw a Broadcom main chip, Spansion Flash, Hynix DRAM. Not sure how much they sold it for, but the Oz mobile company charged $100 and probably made much more profit that the manufacturer. In the meantime, the companies still in manufacture will eventually get their own outlets and hone their skills as electronics retreat in Western economies. Electronics show in Melbourne next week; it is going to be interesting to have a look at what is still made here. Anyone else could have bought the same chips which were not from China originally, but they did not. Embedded software development in the West has retreated to military where outsiders are excluded and competition is less. Thankfully there is no "wine equalisation tax" in electronics, but markup as too high in the West, even on downloaded software like PhotoShop or Apple hardware (30 to 40% premium in Australia on US list and the US based companies are also making a profit).
With such high markups, tax and value added tax, the foundries will go to where they are looked after. The level of automation, relatively few workers compared to the fab outlay and turnover in dollar terms means that labour costs are not the real issue. There are not many floor sweepers in a fab--causes too much dust, but plenty of really smart engineers to work around 30nm and lower. Yield is also critical. We dig for rocks here in Oz, US pushes paper on Wall Street, and UK (plus the bulk of Europe) seem to borrow from one election to another to keep voters comfortable.
Very fascinating. China is making so much progress in all areas. This is figuring out how play at all levels. This 13nm process is something I think not everyone should bother. There is a lot of gains in 90nm