20 ms·

Seriously, why are we still outsourcing chip manufacturing to other countries? Sure it's cheaper, but we sacrifice a lot to have a society of corporate slaves b

Seriously, why are we still outsourcing chip manufacturing to other countries? Sure it's cheaper, but we sacrifice a lot to have a society of corporate slaves build our tech. Security, core domain knowledge, capability, corporate secrets, patent rewards and enforcement, etc... All of it you throw away the minute you ship your manufacturing out of the country. I've seen enough board printing machines out there to start working on our own. As a country, we need to close this gap, more automation and capability and there will be no need to outsource circuit board printing and manufacturing. We will be much better off.

adamrezich 8y ago
It's hard to compete domestically against low prices caused by China's completely different standards for wages and human rights for laborers. Plus, here we don't like the idea of manufacturing industries being subsidized by the government (except in the case of "defense" of course...), while China obviously has no qualms with doing so.
- LargeWu 8y ago
  > except in the case of "defense" of course... Well, this thread is exactly the reason we subsidize the defense industry to make sure things are produced in the US.
TheRealPomax 8y ago
Counterpoint: even if we ignored the fact that you cannot possibly produce the volumes of chips necessary at the price necessary in your country rather than in "we don't have to acknowledge all the human rights violations" countries, why would you believe this problem goes away if chip manufacturing were done in your own country, rather than another? The moment the option of taking control of a production line of something _this important_ becomes available, your local specialized organized crime outfits will start to figure out ways to insert themselves into those production lines, learning the ins and outs, and figuring out a way to get something, anything, in there that won't be noticed but will give them a hook into millions of systems. The law does not prevent crime. It just puts a price on it. While that price is typically too high for individuals, for organizations that have no business registration to revoke, and no CEO to drag to court, it is an entirely trivial cost.
- xienze 8y ago
  >Counterpoint: even if we ignored the fact that you cannot possibly produce the volumes of chips necessary at the price necessary in your country rather than in "we don't have to acknowledge all the human rights violations" countries, why would you believe this problem goes away if chip manufacturing were done in your own country, rather than another? It's certainly easier to enforce laws and observe manufacturing processes at domestic factories than it is at factories thousands of miles away in a country that actively encourages IP theft and other wrongdoings, don't you think?
  - TheRealPomax 8y ago
    Not really, no. Why do you think it be easier to police? In concrete terms: who do you expect to do the policing? Because this is the kind of work that requires an expert, to catch an expert, messing with a product created by people 100% ignorant of _what_ they're making. Just _that_ they're making them. Where are you going find enough experts to check the work of even a single production line?
    - Erlich_Bachman 8y ago
      Because "thousands of miles away in a country that actively encourages IP theft and other wrongdoings". It makes perfect sense. If you don't think that, try to run any business in another country. It's just obvious that it would be easier to do domestically. You just list other set of problems. Those problems only get compounded if we'are talking about another country.
- repolfx 8y ago
  Not all societies are equally corrupt.
  - TeMPOraL 8y ago
    But no societies are free from organized crime. And last time I checked, no western country was free from card skimmers either.
mthoms 8y ago
Canadian steel is considered by this administration to be a national security risk. But Chinese made boards and chips installed in weapons systems and crucial data centers? No problem. Let that sink in for a moment. https://www.wsj.com/articles/dont-trust-the-chinese-to-make-microchips-for-the-military-1509059023 https://www.wsj.com/articles/dont-trust-the-chinese-to-make-...
- AcerbicZero 8y ago
  I love a good Trump bashing moment as much as the next guy, but this is inaccurate. The DoD has stringent requirements and quality control procedures in place for their chip procurement. Not to say they couldn't be improved, but the DoD has been aware of this threat for a while, and seems to be mitigating the risk fairly well.
  - cvwright 8y ago
    Also, as far as I understand the argument, it goes beyond "Canadian steel is a national security risk". A couple of years ago, Mexico was caught laundering $2B of Chinese aluminum to avoid US taxes. http://fortune.com/2016/09/09/chinese-aluminum-giant-is-tied-to-a-2-billion-mystery-mexican-stockpile/ http://fortune.com/2016/09/09/chinese-aluminum-giant-is-tied... The theory, from the Trump crowd, is that Canada is also engaged in similar shady dealings with China. If true, that would put the US at risk.
    - mh8h 8y ago
      Even if true, how does that make it a national security risk?
      - ABCLAW 8y ago
        The concern was the depression in prices was cratering local high-quality smelting capacity. However, the DOD issued a memo (penned by Mattis iirc) indicating that there was no supply related concerns. The lack of aluminum used to justify the tariffs was in fact just the result of the LME's anti-market-tampering rules creating an incentive for metals traders to stockpile the material in private stores rather than in LME warehouses. There was a nice article about this yesterday, but I don't have the link.
clubm8 8y ago
>Seriously, why are we still outsourcing chip manufacturing to other countries? I actually agree it might be better for the Americans to manufacture things in America - especially things used in critical government systems. But this seems like a human problem - if all the factories were moved to America, couldn't those factory managers etc also be bribed? American manufacturing in the 60s was rife with unions w/ ties to organized crime.
- zavi 8y ago
  Business culture is different in the US and China. If you tamper a chip in China and go unnoticed you are considered smart & the winner. If you do so here you'll be getting a more negative reaction.
  - qiqing 8y ago
    Western manufacturers have a tendency to buy from the cheapest supplier, even if it isn't physically possible to manufacture at that price point without cutting massive corners or making profit off of some externality. However, when Chinese manufacturers build their own brand, you'd be surprised how the business culture suddenly creates a different set of incentives. Trust alignment of incentives, as opposed to hey-they-promised-an-actually-impossible-pricepoint-on-paper.
    - fiter 8y ago
      I think I saw this on another thread. You're saying if someone bids that they can do something for a price that's not reasonable, it's my fault for believing their mischaracterization? "Fool me once, shame on me." I much prefer the other mode of operation: "Fool me once, shame on you. Fool me twice, shame on me."
howard941 8y ago
> Sure it's cheaper That's enough, full stop, say no more. The other costs are real yet they're either not marginal, are borne by others, or both.
superflyguy 8y ago
You're conflating a few things there. Whilst companies like to make noises occasionally about saving the planet, doing the right thing, making (your country goes here) great etc, it's just horseshit. They exist to make money. That's it.

adamrezich 8y ago

It's hard to compete domestically against low prices caused by China's completely different standards for wages and human rights for laborers. Plus, here we don't like the idea of manufacturing industries being subsidized by the government (except in the case of "defense" of course...), while China obviously has no qualms with doing so.

LargeWu 8y ago
> except in the case of "defense" of course... Well, this thread is exactly the reason we subsidize the defense industry to make sure things are produced in the US.

TheRealPomax 8y ago

Counterpoint: even if we ignored the fact that you cannot possibly produce the volumes of chips necessary at the price necessary in your country rather than in "we don't have to acknowledge all the human rights violations" countries, why would you believe this problem goes away if chip manufacturing were done in your own country, rather than another? The moment the option of taking control of a production line of something _this important_ becomes available, your local specialized organized crime outfits will start to figure out ways to insert themselves into those production lines, learning the ins and outs, and figuring out a way to get something, anything, in there that won't be noticed but will give them a hook into millions of systems. The law does not prevent crime. It just puts a price on it. While that price is typically too high for individuals, for organizations that have no business registration to revoke, and no CEO to drag to court, it is an entirely trivial cost.

xienze 8y ago
>Counterpoint: even if we ignored the fact that you cannot possibly produce the volumes of chips necessary at the price necessary in your country rather than in "we don't have to acknowledge all the human rights violations" countries, why would you believe this problem goes away if chip manufacturing were done in your own country, rather than another? It's certainly easier to enforce laws and observe manufacturing processes at domestic factories than it is at factories thousands of miles away in a country that actively encourages IP theft and other wrongdoings, don't you think?
- TheRealPomax 8y ago
  Not really, no. Why do you think it be easier to police? In concrete terms: who do you expect to do the policing? Because this is the kind of work that requires an expert, to catch an expert, messing with a product created by people 100% ignorant of _what_ they're making. Just _that_ they're making them. Where are you going find enough experts to check the work of even a single production line?
  - Erlich_Bachman 8y ago
    Because "thousands of miles away in a country that actively encourages IP theft and other wrongdoings". It makes perfect sense. If you don't think that, try to run any business in another country. It's just obvious that it would be easier to do domestically. You just list other set of problems. Those problems only get compounded if we'are talking about another country.
repolfx 8y ago
Not all societies are equally corrupt.
- TeMPOraL 8y ago
  But no societies are free from organized crime. And last time I checked, no western country was free from card skimmers either.

mthoms 8y ago

Canadian steel is considered by this administration to be a national security risk. But Chinese made boards and chips installed in weapons systems and crucial data centers? No problem. Let that sink in for a moment. https://www.wsj.com/articles/dont-trust-the-chinese-to-make-microchips-for-the-military-1509059023 https://www.wsj.com/articles/dont-trust-the-chinese-to-make-...

AcerbicZero 8y ago
I love a good Trump bashing moment as much as the next guy, but this is inaccurate. The DoD has stringent requirements and quality control procedures in place for their chip procurement. Not to say they couldn't be improved, but the DoD has been aware of this threat for a while, and seems to be mitigating the risk fairly well.
- cvwright 8y ago
  Also, as far as I understand the argument, it goes beyond "Canadian steel is a national security risk". A couple of years ago, Mexico was caught laundering $2B of Chinese aluminum to avoid US taxes. http://fortune.com/2016/09/09/chinese-aluminum-giant-is-tied-to-a-2-billion-mystery-mexican-stockpile/ http://fortune.com/2016/09/09/chinese-aluminum-giant-is-tied... The theory, from the Trump crowd, is that Canada is also engaged in similar shady dealings with China. If true, that would put the US at risk.
  - mh8h 8y ago
    Even if true, how does that make it a national security risk?
    - ABCLAW 8y ago
      The concern was the depression in prices was cratering local high-quality smelting capacity. However, the DOD issued a memo (penned by Mattis iirc) indicating that there was no supply related concerns. The lack of aluminum used to justify the tariffs was in fact just the result of the LME's anti-market-tampering rules creating an incentive for metals traders to stockpile the material in private stores rather than in LME warehouses. There was a nice article about this yesterday, but I don't have the link.

clubm8 8y ago

>Seriously, why are we still outsourcing chip manufacturing to other countries? I actually agree it might be better for the Americans to manufacture things in America - especially things used in critical government systems. But this seems like a human problem - if all the factories were moved to America, couldn't those factory managers etc also be bribed? American manufacturing in the 60s was rife with unions w/ ties to organized crime.

zavi 8y ago
Business culture is different in the US and China. If you tamper a chip in China and go unnoticed you are considered smart & the winner. If you do so here you'll be getting a more negative reaction.
- qiqing 8y ago
  Western manufacturers have a tendency to buy from the cheapest supplier, even if it isn't physically possible to manufacture at that price point without cutting massive corners or making profit off of some externality. However, when Chinese manufacturers build their own brand, you'd be surprised how the business culture suddenly creates a different set of incentives. Trust alignment of incentives, as opposed to hey-they-promised-an-actually-impossible-pricepoint-on-paper.
  - fiter 8y ago
    I think I saw this on another thread. You're saying if someone bids that they can do something for a price that's not reasonable, it's my fault for believing their mischaracterization? "Fool me once, shame on me." I much prefer the other mode of operation: "Fool me once, shame on you. Fool me twice, shame on me."

howard941 8y ago

> Sure it's cheaper That's enough, full stop, say no more. The other costs are real yet they're either not marginal, are borne by others, or both.

superflyguy 8y ago

You're conflating a few things there. Whilst companies like to make noises occasionally about saving the planet, doing the right thing, making (your country goes here) great etc, it's just horseshit. They exist to make money. That's it.