9 ms·

How hard for a trillion dollar company to build their own infrastructure in the U.S. and do it relatively cost effective?

prawn 4y ago
Obviously fairly hard. Suspect the "cost effective" bit is a big part of it.
- darkwizard42 4y ago
  I actually think the scale is the issue. It is just SO many phones and then subsequently, SO many parts. Without dropping any velocity in their ability to ship phones rebuilding a massive setup like what they have access to in China is not even limited by the money (probably by the technical know how)
  - gowings97 4y ago
    Automotive bill of materials are far more extensive and requirement heavy (physical space/warehousing, subassembly integration and part sequencing, double checking firmware/electronic systems as the vehicle comes down the line) compared to consumer electronics. Yes, TSMC 4nm is more complex from an electronics standpoint. But from a supply chain process standpoint, automotive is way more complex. All of the best consumer electronic manufacturing sequencing and tooling is in China though, hence the problem we have today. Tim Cook is a supply chain guy though, so I'm curious how he will approach and solve this problem.
shagie 4y ago
What would it take to build a city that mirrors the auto manufacturing capabilities of Detroit in its classic car period? Note that this isn't Ford, or GM that did it.. but rather Ford and GM and hundreds of smaller companies that supplied the raw materials to a company to make the parts that were used by companies that supplied the parts to the auto makers. And so, yes, you could - but its not something that one company can do - or for that mater even has the competency to do for the same reason that Ford doesn't run steel mills.
user3939382 4y ago
Obviously the logistics and energy infrastructure is here. Cheap labor force, hard to compete with a lot of the world there, but let’s say maybe. The hard problem is economically rerouting the supply chain for the diverse set of parts and materials that go into these devices. The challenge isn’t just building a factory.
paxys 4y ago
As hard as it would be for China to build their own Silicon Valley and put Apple, Google and Microsoft out of business. People think that Chinese manufacturing is simply a bunch of low paid workers in factories performing repetitive tasks, and the whole thing could be easily replicated in the US if not for labor costs. In reality there is an entire ecosystem of complex supply chains, very high skilled workers and the most advanced industrial machinery on the planet making it what it is. We simply do not have the knowledge or IP to run these kinds of manufacturing operations at scale in the US, regardless of cost.
- YZF 4y ago
  We used to build a lot of stuff (and I'm sure we still do) in the west. The problem is costs. The workaround is automation (see Tesla e.g.). I'm pretty sure that with a large enough investment Apple could make phones in the US for cheaper than they do in China (including the entire supply chain). The problem is big public companies live quarter to quarter. There's definitely knowledge and IP to do this. I worked for a company that moved some manufacturing to China about 15 years ago. Everything about how to build the thing came from our engineers including redesigns based on materials/components that were more readily available in China. It would be no problem (but wouldn't make economic sense) to move production back here (Canada in this case) just as fast as it was moved to China (years ;) ).
  - jpgvm 4y ago
    It's not just about the depth (of which the Chinese has plenty) but also scale, cost of transport of inputs (which are all either made in Shenzhen already or available in quantity and stocked close by) access to skilled labor in the quantities needed, services to handle any layer of the chain at arms reach - need a board respun because components have dried up? Sure you can get guys in the US to do it but your board or assembly partner in Shenzhen can also just get it handled for you, pay the right amount of money and it can be done essentially tomorrow. There is also proximity to packaging and larger manufacturing, want to get a custom injection molded case or even some fancy CNC milled one? Yeah you can get that too, probably within 30-40mins by truck of where your boards are being made and your final assembly partner also. I guess what I am getting at is that it's the only place on earth with such centralized infrastructure for making nearly anything, nothing is hard, nothing is far away, nothing is "not stocked here", it just makes for a much more convenient way to build products. My experience "being there" was that I don't think you can replicate it easily. It has its own vibe, culture and way of Just Getting Shit Done that just feels unique.
snowwrestler 4y ago
There are just not enough unemployed, qualified people in the U.S. to staff a similar operation. Unless Apple radically improved automation, so that far fewer humans were needed, it would be impossible. Only other option would be a huge surge of immigration into the U.S. and I don’t think even $1 trillion can buy that kind of policy shift.
slowmotiony 4y ago
2,2 trillion dollar company to be precise

prawn 4y ago

Obviously fairly hard. Suspect the "cost effective" bit is a big part of it.

darkwizard42 4y ago
I actually think the scale is the issue. It is just SO many phones and then subsequently, SO many parts. Without dropping any velocity in their ability to ship phones rebuilding a massive setup like what they have access to in China is not even limited by the money (probably by the technical know how)
- gowings97 4y ago
  Automotive bill of materials are far more extensive and requirement heavy (physical space/warehousing, subassembly integration and part sequencing, double checking firmware/electronic systems as the vehicle comes down the line) compared to consumer electronics. Yes, TSMC 4nm is more complex from an electronics standpoint. But from a supply chain process standpoint, automotive is way more complex. All of the best consumer electronic manufacturing sequencing and tooling is in China though, hence the problem we have today. Tim Cook is a supply chain guy though, so I'm curious how he will approach and solve this problem.

shagie 4y ago

What would it take to build a city that mirrors the auto manufacturing capabilities of Detroit in its classic car period? Note that this isn't Ford, or GM that did it.. but rather Ford and GM and hundreds of smaller companies that supplied the raw materials to a company to make the parts that were used by companies that supplied the parts to the auto makers. And so, yes, you could - but its not something that one company can do - or for that mater even has the competency to do for the same reason that Ford doesn't run steel mills.

user3939382 4y ago

Obviously the logistics and energy infrastructure is here. Cheap labor force, hard to compete with a lot of the world there, but let’s say maybe. The hard problem is economically rerouting the supply chain for the diverse set of parts and materials that go into these devices. The challenge isn’t just building a factory.

paxys 4y ago

As hard as it would be for China to build their own Silicon Valley and put Apple, Google and Microsoft out of business. People think that Chinese manufacturing is simply a bunch of low paid workers in factories performing repetitive tasks, and the whole thing could be easily replicated in the US if not for labor costs. In reality there is an entire ecosystem of complex supply chains, very high skilled workers and the most advanced industrial machinery on the planet making it what it is. We simply do not have the knowledge or IP to run these kinds of manufacturing operations at scale in the US, regardless of cost.

YZF 4y ago
We used to build a lot of stuff (and I'm sure we still do) in the west. The problem is costs. The workaround is automation (see Tesla e.g.). I'm pretty sure that with a large enough investment Apple could make phones in the US for cheaper than they do in China (including the entire supply chain). The problem is big public companies live quarter to quarter. There's definitely knowledge and IP to do this. I worked for a company that moved some manufacturing to China about 15 years ago. Everything about how to build the thing came from our engineers including redesigns based on materials/components that were more readily available in China. It would be no problem (but wouldn't make economic sense) to move production back here (Canada in this case) just as fast as it was moved to China (years ;) ).
- jpgvm 4y ago
  It's not just about the depth (of which the Chinese has plenty) but also scale, cost of transport of inputs (which are all either made in Shenzhen already or available in quantity and stocked close by) access to skilled labor in the quantities needed, services to handle any layer of the chain at arms reach - need a board respun because components have dried up? Sure you can get guys in the US to do it but your board or assembly partner in Shenzhen can also just get it handled for you, pay the right amount of money and it can be done essentially tomorrow. There is also proximity to packaging and larger manufacturing, want to get a custom injection molded case or even some fancy CNC milled one? Yeah you can get that too, probably within 30-40mins by truck of where your boards are being made and your final assembly partner also. I guess what I am getting at is that it's the only place on earth with such centralized infrastructure for making nearly anything, nothing is hard, nothing is far away, nothing is "not stocked here", it just makes for a much more convenient way to build products. My experience "being there" was that I don't think you can replicate it easily. It has its own vibe, culture and way of Just Getting Shit Done that just feels unique.

snowwrestler 4y ago

There are just not enough unemployed, qualified people in the U.S. to staff a similar operation. Unless Apple radically improved automation, so that far fewer humans were needed, it would be impossible. Only other option would be a huge surge of immigration into the U.S. and I don’t think even $1 trillion can buy that kind of policy shift.

slowmotiony 4y ago

2,2 trillion dollar company to be precise