4 ms·

I'm surprised that industry hasn't diversified the geographical locations of important manufacturing like this especially after the great hard drive shortage of

by Osiris 6y ago

I'm surprised that industry hasn't diversified the geographical locations of important manufacturing like this especially after the great hard drive shortage of 2011 after flooding crippled most hard drive manufacturing.

1-6 6y ago
I think the efficiencies of manufacturing in one country still outweighs the benefits of diversification. I'm not an expert on these matters but it just seems obvious. You'll have to move around materials and there are trade/geopolitical issues at play there. Japan and Korea briefly had a dispute in 2019 and Japan stopped 3 chemicals from going to Korea. This affected their semi production.
- Osiris 6y ago
  That's my point is that it's so concentrated it takes very little to completely disrupt the entire industry. The question to me is are the increased costs of diversification worth the risk of temporary (or maybe permanent) disruptions to manufacturing. Then again, when I studied political science and economics there was a common belief/theory that this sort of increased interdependency between countries (globalization) would decrease the likelihood of war and increase opportunities for democracy. So maybe it's a good thing.
  - 1-6 6y ago
    In my opinion, under ideal circumstances will you have interdependency between countries with everyone sharing a part in the process. What will end up happening is that countries will split into two ideological ‘nations’ like in Axis vs Allies.
Dirlewanger 6y ago
Obviously not much has changed because SEA is where the cheap labor is, and it's not too far from China since many rare-earth materials are from there. I wonder if in the coming decades, as SEA's middle class continues to grow (as China's has now), we'll see companies migrate to Africa, the last frontier of relatively cheap labor. We know China has already begun doing that.
nine_k 6y ago
Not going to happen. Consumers demand a lower price today and would buy from a competitor if the price is 3% lower. They won't pay extra for the resilience of the supply chain. Also, the choice of geographies is not that wide. You need a place with lots of reasonably skilled but relatively low-paid people.

by Osiris 6y ago

1-6 6y ago

I think the efficiencies of manufacturing in one country still outweighs the benefits of diversification. I'm not an expert on these matters but it just seems obvious. You'll have to move around materials and there are trade/geopolitical issues at play there. Japan and Korea briefly had a dispute in 2019 and Japan stopped 3 chemicals from going to Korea. This affected their semi production.

Osiris 6y ago
That's my point is that it's so concentrated it takes very little to completely disrupt the entire industry. The question to me is are the increased costs of diversification worth the risk of temporary (or maybe permanent) disruptions to manufacturing. Then again, when I studied political science and economics there was a common belief/theory that this sort of increased interdependency between countries (globalization) would decrease the likelihood of war and increase opportunities for democracy. So maybe it's a good thing.
- 1-6 6y ago
  In my opinion, under ideal circumstances will you have interdependency between countries with everyone sharing a part in the process. What will end up happening is that countries will split into two ideological ‘nations’ like in Axis vs Allies.

Dirlewanger 6y ago

Obviously not much has changed because SEA is where the cheap labor is, and it's not too far from China since many rare-earth materials are from there. I wonder if in the coming decades, as SEA's middle class continues to grow (as China's has now), we'll see companies migrate to Africa, the last frontier of relatively cheap labor. We know China has already begun doing that.

nine_k 6y ago

Not going to happen. Consumers demand a lower price today and would buy from a competitor if the price is 3% lower. They won't pay extra for the resilience of the supply chain. Also, the choice of geographies is not that wide. You need a place with lots of reasonably skilled but relatively low-paid people.