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Yes, mostly we sell the equipment and design services that make the manufacturing possible. There is huge leverage in that and the higher margins that WallStree

by kurthr 10y ago

Yes, mostly we sell the equipment and design services that make the manufacturing possible. There is huge leverage in that and the higher margins that WallStreet demands. For quite some time (mostly) Asian governments have been investing in education, infrastructure, and equipment to manufacture the consumer items of the world. It is much harder to do development and understand the real manufacturing bottle necks when you don't see them first hand... even harder when you can't easily get the raw materials. I was struck with this the first time I tried to order in the US a PCB to the tolerances available in China. The yield was so bad, they basically weren't available. It was cheaper and faster to have the parts built in China and shipped back than to order from a proto house in the US. Why? They used similar equipment in China (I saw it myself), but they ran it 2-3 shifts every day and it was completely dialed in. In the US they turned it on once a week and tried to make enough prototypes to pay for it.

yourapostasy 10y ago
Yep. The feet on the ground experience tells you, me and others like us that in the war to create automation, the odds favor China, because in the end, they own the myriad little details that get expressed as "edge cases" and resolved issues during development of the automation solutions, and which are completely unavailable unless you own the literal physical factory. This feet on the ground experience is discounted by the policymakers, so it will be an interesting case study to watch unfold over the next couple of decades. If our experience-informed observations are correct, then US senior management will experience a nasty automotive-industry-style shock when it "suddenly" discovers China is far better at automation than the presumptive US comparative-advantaged expertise led them to believe. My take is there are no shortcuts for doing the actual work. Just like there is no replacement for lifting the actual weight and eating a clean diet instead of reading yourself into expertise on fitness.

by kurthr 10y ago

yourapostasy 10y ago

Yep. The feet on the ground experience tells you, me and others like us that in the war to create automation, the odds favor China, because in the end, they own the myriad little details that get expressed as "edge cases" and resolved issues during development of the automation solutions, and which are completely unavailable unless you own the literal physical factory. This feet on the ground experience is discounted by the policymakers, so it will be an interesting case study to watch unfold over the next couple of decades. If our experience-informed observations are correct, then US senior management will experience a nasty automotive-industry-style shock when it "suddenly" discovers China is far better at automation than the presumptive US comparative-advantaged expertise led them to believe. My take is there are no shortcuts for doing the actual work. Just like there is no replacement for lifting the actual weight and eating a clean diet instead of reading yourself into expertise on fitness.