5 ms·

The problem we have ("we" meaning the US and Europe) is that we have allowed a massive portion of the semiconductor mechanism to leave our shores. In a world w

The problem we have ("we" meaning the US and Europe) is that we have allowed a massive portion of the semiconductor mechanism to leave our shores. In a world where electronics are found in just about everything, this is a pretty bad situation to be in. We are in the process of developing a commercial product that will require manufacturing at a rate of 10K to 20K units per month. When we started this work, semiconductor availability wasn't a significant concern. At the start of this year we started to receive quotes with lead times in the order of 52 weeks. Yes, a whole year. Some of the chips we designed into this product became unobtainium. Well. Not quite. We discovered the supply is plentiful in China. And, of course, pricing is insane. A device that was $0.70 is now over three dollars in China. And, again, of course, the only way you can buy it is if you have your boards manufactured by the supplier. In our case this would mean a contract for 10K to 20K units per month having to leave the prospects of US-based manufacturing --which is already a difficult proposition under normal circumstances. Never mind roads and bridges. We don't need to touch any of that. We need to dump that money into rebuilding industries and reducing their costs of operation to the bone. Let me put it this way. Everyone can understand that something like a basic Arduino is a very simple product. In electronics terms, on par with making cloth masks. Well, if you had to manufacture a simple Arduino in the US or Europe today, it would be impossible. Much as is the case for masks, the raw components needed to make such a product are not made in the US and Europe. You might be able to have the raw PCB's made. I would not be surprised if the raw materials for that process were not made in the US and Europe as well (I didn't look into it, so I can't make that assertion). Even if you could make one, the end-user cost would likely be over a hundred dollars per unit (if the components were made in the US and Europe). That's were we are today. And this isn't going to get any better by fixing roads and bridges. We need to focus on what is truly important. We needed to do this ten or twenty years ago. This effort by Intel might not be all it is reported to be. I just hope it is an indication that we are starting to understand what we are standing on...and it isn't solid ground.

ChuckNorris89 6y ago
>Well, if you had to manufacture a simple Arduino in the US or Europe today, it would be impossible. I think you have no idea what you're talking about. In Europe at least, there are plenty of fabs that make microcontrollers like the Arduino. And the original Arduino boards (w)are made in Italy which last I checked is still in Europe. >Much as is the case for masks, the raw components needed to make such a product are not made in the US and Europe. In Europe we have also plenty of factories making FFP2 masks (my favorite ones I can buy in Austria ATM come from a brand made in the Czech Republic).
- yulaow 6y ago
  I think, but I am not sure, that parent was talking about the whole production chain, from raw materials to end product. For what I remember some(most?) components of arduinos are imported from outside EU. Correct me if I am wrong.
  - hef19898 6y ago
    True local self sustainability stopped being a thing in the bronze age.
  - ChuckNorris89 6y ago
    >For what I remember some(most?) components of arduinos are imported from outside EU So what? A third of iphone components are imported from outside of china. No competitive economy is 100% self sustainable.
  - robomartin 6y ago
    I am using an Arduino as a simple example. Anyone can look-up the components used to make one, go through the exercise of sourcing them and gain an understanding of supply chain realities in this way. Generally speaking, products with greater complexity illustrate this problem far better. The problem is it would be impossible for the a reader on HN to dig into this reality due to not having access to the bill of materials, etc. I have never said I am pushing for a 100% localized supply chain. That would be preposterous. Silly. However, the reality we navigate today isn't good at all. Last year showed the world what can happen. China is nearly at a 100% single-source position. This varies from industry to industry. And, of course, they are not saying "we have enough, let's stop here", they are laser-focused on bringing in as much business as possible and will absorb as much of the supply chain as possible. What they have done is admirable and nothing less than remarkable. I don't fault or hate them for it. They work hard and deliver results. They deserve to be where they are.
- robomartin 6y ago
  I think you need to read what I wrote more carefully. I try to be precise with my language. Simple exercise: The bill of materials for Arduino boards is publicly available. Pick a board. Now go source every single component on that board. Create two spreadsheets. The first would have you source what you can from China. The second would source from any EU country and the US if you'd like and exclude any Chinese made component from the list. My prediction: You can make 100% of an Arduino in China using Chinese components. You cannot make an Arduino in Europe or the US without Chinese components. Let's add another layer to this. Let's say you create a third spreadsheet where you source as many components (and services) as possible from the US and Europe and whatever you can't you get from China. Now calculate the cost for each case: China only. US/EU only. US/EU + necessary Chinese components and services. Prediction: The US/EU cost --if it is even possible to do it-- will easily double or triple the cost of that product. The US/EU + China cost won't be competitive at all because the vast majority of the items will have to come from China and you will incur additional costs for producing in the US/EU rather than just facing reality and having the product made entirely in China. Please note that I am using an Arduino as a super-simple example for the sake of an illustration. It would be wrong to engage in dissecting this simple illustration tool in an attempt to invalidate my claim. This claim comes from decades in manufacturing, where I have faced this question of where I can buy components, assemblies and services. Twenty or thirty years ago sourcing from the US or Europe wasn't horribly difficult. Today, it is frustrating to see just how difficult this is. The problem is real. Nobody is suggesting 100% repatriation of the supply chain. That is impossible. There is a number between 0% and 100% that would do both the US and Europe much good. I don't know what that number is. Once you start looking at more "real world" products, the picture gets dark very quickly. Last year we designed a robotic system. Virtually every component that went into making this robot came from China. I think I can say that the aluminum, sheet metal and bearings did not. While I did not conduct a component-by-component survey, I think I can easily say that 95% of the electronic components, connectors, wires, cameras, displays, sensors, pneumatic valves, motors and even the wheels came from China. In other words, if you had to make this robot without China all you'd end-up with is an empty metal shell. That should make everyone take pause.
deleted 6y ago
[deleted]
imtringued 6y ago
The obvious problem with your suggestion is that the Fed has driven interest rates to an all time low in response to low inflation. The corporate savings rate has risen at the expense of the household savings rate (from 2000 to 2019). Cities give businesses massive tax credits which are free money for large corporations. There is not much you can do to help private corporations at this point, you've already given them all the support they could possibly get. If nobody bites, that's on them. Meanwhile low skill workers barely get any support. An infrastructure bill gives them work and keeps the towns and cities from falling apart.

ChuckNorris89 6y ago

>Well, if you had to manufacture a simple Arduino in the US or Europe today, it would be impossible. I think you have no idea what you're talking about. In Europe at least, there are plenty of fabs that make microcontrollers like the Arduino. And the original Arduino boards (w)are made in Italy which last I checked is still in Europe. >Much as is the case for masks, the raw components needed to make such a product are not made in the US and Europe. In Europe we have also plenty of factories making FFP2 masks (my favorite ones I can buy in Austria ATM come from a brand made in the Czech Republic).

yulaow 6y ago
I think, but I am not sure, that parent was talking about the whole production chain, from raw materials to end product. For what I remember some(most?) components of arduinos are imported from outside EU. Correct me if I am wrong.
- hef19898 6y ago
  True local self sustainability stopped being a thing in the bronze age.
- ChuckNorris89 6y ago
  >For what I remember some(most?) components of arduinos are imported from outside EU So what? A third of iphone components are imported from outside of china. No competitive economy is 100% self sustainable.
- robomartin 6y ago
  I am using an Arduino as a simple example. Anyone can look-up the components used to make one, go through the exercise of sourcing them and gain an understanding of supply chain realities in this way. Generally speaking, products with greater complexity illustrate this problem far better. The problem is it would be impossible for the a reader on HN to dig into this reality due to not having access to the bill of materials, etc. I have never said I am pushing for a 100% localized supply chain. That would be preposterous. Silly. However, the reality we navigate today isn't good at all. Last year showed the world what can happen. China is nearly at a 100% single-source position. This varies from industry to industry. And, of course, they are not saying "we have enough, let's stop here", they are laser-focused on bringing in as much business as possible and will absorb as much of the supply chain as possible. What they have done is admirable and nothing less than remarkable. I don't fault or hate them for it. They work hard and deliver results. They deserve to be where they are.
robomartin 6y ago
I think you need to read what I wrote more carefully. I try to be precise with my language. Simple exercise: The bill of materials for Arduino boards is publicly available. Pick a board. Now go source every single component on that board. Create two spreadsheets. The first would have you source what you can from China. The second would source from any EU country and the US if you'd like and exclude any Chinese made component from the list. My prediction: You can make 100% of an Arduino in China using Chinese components. You cannot make an Arduino in Europe or the US without Chinese components. Let's add another layer to this. Let's say you create a third spreadsheet where you source as many components (and services) as possible from the US and Europe and whatever you can't you get from China. Now calculate the cost for each case: China only. US/EU only. US/EU + necessary Chinese components and services. Prediction: The US/EU cost --if it is even possible to do it-- will easily double or triple the cost of that product. The US/EU + China cost won't be competitive at all because the vast majority of the items will have to come from China and you will incur additional costs for producing in the US/EU rather than just facing reality and having the product made entirely in China. Please note that I am using an Arduino as a super-simple example for the sake of an illustration. It would be wrong to engage in dissecting this simple illustration tool in an attempt to invalidate my claim. This claim comes from decades in manufacturing, where I have faced this question of where I can buy components, assemblies and services. Twenty or thirty years ago sourcing from the US or Europe wasn't horribly difficult. Today, it is frustrating to see just how difficult this is. The problem is real. Nobody is suggesting 100% repatriation of the supply chain. That is impossible. There is a number between 0% and 100% that would do both the US and Europe much good. I don't know what that number is. Once you start looking at more "real world" products, the picture gets dark very quickly. Last year we designed a robotic system. Virtually every component that went into making this robot came from China. I think I can say that the aluminum, sheet metal and bearings did not. While I did not conduct a component-by-component survey, I think I can easily say that 95% of the electronic components, connectors, wires, cameras, displays, sensors, pneumatic valves, motors and even the wheels came from China. In other words, if you had to make this robot without China all you'd end-up with is an empty metal shell. That should make everyone take pause.

deleted 6y ago

[deleted]

imtringued 6y ago

The obvious problem with your suggestion is that the Fed has driven interest rates to an all time low in response to low inflation. The corporate savings rate has risen at the expense of the household savings rate (from 2000 to 2019). Cities give businesses massive tax credits which are free money for large corporations. There is not much you can do to help private corporations at this point, you've already given them all the support they could possibly get. If nobody bites, that's on them. Meanwhile low skill workers barely get any support. An infrastructure bill gives them work and keeps the towns and cities from falling apart.