diff --git a/src/middleware/webpack-serve.js b/src/middleware/webpack-serve.js
index 3901ae643..4958acbe9 100644
--- a/src/middleware/webpack-serve.js
+++ b/src/middleware/webpack-serve.js
@@ -1,4 +1,5 @@
 import process from 'node:process';
+import fs from 'node:fs';
 import webpack from 'webpack';
 import middleware from 'webpack-dev-middleware';
 import { publicLibConfig } from '../../webpack.config.js';
@@ -16,5 +17,8 @@ export default function getWebpackServeMiddleware() {
         });
     }
 
-    return middleware(compiler, {});
+    return middleware(compiler, {
+        // @ts-ignore Use actual file system to ease on heap memory usage
+        outputFileSystem: fs,
+    });
 }
diff --git a/webpack.config.js b/webpack.config.js
index 1e5138555..e4a819dd9 100644
--- a/webpack.config.js
+++ b/webpack.config.js
@@ -24,6 +24,7 @@ export const publicLibConfig = {
         hints: false,
     },
     output: {
+        path: path.resolve(process.cwd(), 'dist'),
         filename: 'lib.js',
         libraryTarget: 'module',
     },