6 ms·

Manufacturing never left the US - at $2.5T of output (2021) it's easily the highest it's ever been - almost 40% higher than 10 years previous[1]. What has chan

by derriz 3y ago

Manufacturing never left the US - at $2.5T of output (2021) it's easily the highest it's ever been - almost 40% higher than 10 years previous[1]. What has changed is the proportion of working people employed in manufacturing - which has dropped. But this is inevitable unless you want to roll back decades of technical advancement and investment. And this is happening in all countries and is an inevitable consequence of manufacturing improvements. Nor is the phenomena novel - it happened about 100 years ago in agriculture which had previously been the biggest employer. What has also dropped is its share of US GDP - but this is because other sectors - e.g. IT - have boomed - not because manufacturing has been in decline. [1] https://nam.org/state-manufacturing-data/2022-united-states-manufacturing-facts https://nam.org/state-manufacturing-data/2022-united-states-...

TaylorAlexander 3y ago
You say all of this, but where in the US can I go get a PCB made, a housing injection molded, rubber seals custom cut, and have a contract manufacturer assemble everything for a modest price? If you order a small batch of custom PCBs with a five day turnaround from a fab house in the USA it costs over $500. If you order it from China they cost $15. And it's not just due to cheaper labor. They have better higher volume equipment. Edit: I’d love to find a non-state source but China claims $5T per year in manufacturing output for 2021. I wonder where the US would be if we had focused on manufacturing growth instead of offshoring production. http://english.scio.gov.cn/m/pressroom/2022-03/01/content_78077749.htm http://english.scio.gov.cn/m/pressroom/2022-03/01/content_78...
- konschubert 3y ago
  And better processes.
- quailfarmer 3y ago
  You can get a pretty high quality PCB built at Bay Area Circuits in Fremont, and assembled at Sierra in Sunnyvale. The speed is marginally slower than JLC, the cost is marginally higher and quality marginally lower than Compeq. But, you can drive there, and be on a first-name basis with your supplier. Given the extreme efficiency of international shipping logistics, I don’t think it’s reasonable to expect any given metro area to have competitive world class manufacturing of every type. The cost of real estate alone makes it hard to compete.
  - TaylorAlexander 3y ago
    Last time I got a quote at Sierra it was hundreds of dollars for a basic PCB order, but that was 15 years ago. Have they gotten more competitive? And I’m not saying “every metro should have competitive world class manufacturing of every type”, which is such a strong claim as to feel strawman-ish (but I get the sense you didn’t mean to do so). I do however deeply wish we had Shenzhen-like manufacturing hubs on the east and west coasts.
    - dharma1 3y ago
      If the initial outlay for setting up Shenzen like manufacturing/electronics hub in the US was partially incentivised with govt subsidies to get it going, could it become competitive (cost/quality/scale wise) with Chinese hubs on a reasonable time horizon? There is of course a large labour cost delta and probably a skills shortage in the US that might be an obstacle for making something like this be economically sustainable/competitive - but if it could be automated sufficiently so that labour cost is less of an issue, is this even feasible in theory? I know there are some fabs being built, but beyond that is some kind of broader electronics manufacturing hub in the US conceivable? From the article it sounds like the manufacturing is staying in Asia but moving to politically allied countries where new infra is being built for this. Is it still mainly a labour cost issue?
      - deleted 3y ago
        [deleted]
    - petsfed 3y ago
      Its been a couple of years since I last went to Sierra with an order, but they're pretty competitive with other domestic board houses. About 7 years ago, they were were the cheapest for quick-turn turn-key builds of low-complexity boards in ultra low-volumes (>50), so I had them do a lot of stuff for me.
      - TaylorAlexander 3y ago
        > they're pretty competitive with other domestic board houses My complaint is that domestic board houses are super expensive, so I meant competitive with Chinese production. The person replying to me above said they are "marginally more expensive" but another commenter here went through the full quoting process and got a price that is about 8x higher than a reputable fab in China, which is not "marginally more expensive".
- dukeyukey 3y ago
  > I wonder where the US would be if we had focused on manufacturing growth instead of offshoring production. Probably poorer for one. Every American working in a state-subsidised manufacturing role is one less American working in an industry where the US has a competitive advantage, like software or energy production. Of course if war breaks out that goes out the window.
  - bee_rider 3y ago
    Energy production is nice to have if war breaks out. It is unlikely, I think (thankfully) that we’ll have an existential war with China, because we’re both nuclear armed.
    - dukeyukey 3y ago
      It doesn't even have to be a war with China, or involving the US. Like, say Panama has a civil war that shuts down the canal. That adds a huge cost to shipping, going around South America. Or say Europe (but not the US) gets involved in a war with Russia, redirecting the _massive_ European manufacturing capacity to local needs instead of exports.
      - anovikov 3y ago
        But well if that happens, it's so easy to take Panama back over just simply.
        bee_rider 3y ago
        It is hard to speculate about this sort of stuff. Container ships going through canals and other tight spaces are pretty vulnerable; even if you “take over,” it could be hard to stabilize things to the point where nobody can sneak around shooting rockets and whatnot. See the Red Sea situation, which is different in many ways, but goes to show that small groups with rockets can still be a big pain. All that is just to say, it is nice to have local production of stuff like food and energy that is needed to keep things going.
  - 3y ago
- imtringued 3y ago
  It was three years ago but I got a quote for 10 boards at Aisler and it cost significantly less than 100€, possibly 50€ for all 10 boards. Meanwhile the Chinese competitors always failes the DRC due to laughably bad tolerances. I'm talking about edge mounted through hole connectors, not some deeply buried via barely squeezed in.
- jLaForest 3y ago
  Sensational nonsense, OSHpark does quick turn custom pcbs for cheap in the US
- NegativeK 3y ago
  You two might not be disagreeing. America can absolutely lose out on low-cost parts while increasing its manufacturing base. It's an insanely large field.
  - TaylorAlexander 3y ago
    Well I'm developing an open source farming robot and I just find myself constantly dreaming of spending a month in china to supercharge development of our product. I need better test equipment, I need to shop motors, I need to iterate on PCB design and test, fab, test, fab, test, fab. And the best I can do is look at a little window on my computer on to aliexpress or alibaba and hope I can find something decent, and wait a week or two or three for it to arrive. I would be SO MUCH FASTER at developing my farming robot if I was in a manufacturing mecca like Shenzhen. That is what I wish we could have here in the US. Not a small number of high value manufacturers, but the whole damn chain. Not only would it make our development faster, it would make our products better and cheaper and it would make our lives better.
nottorp 3y ago
> it's easily the highest it's ever been - almost 40% higher than 10 years previous Just to nitpick, the first inflation calculator i opened told me us inflation rate across the last 10 years has been 31.8%. So there has been some growth but not as much as you make it look.
- andruby 3y ago
  Addition the inflation context is great and does indeed make it seem less high. I think OP was mostly saying that manufacturing hasn't decreased, which is what the public narative is proclaiming.
  - vikingerik 3y ago
    Per capita matters too. The total hasn't decreased but hasn't increased either considering that. Besides the 30% inflation, there was also ~10% population growth in the ten years. The nominal 40% dollar value is entirely accounted for by those. US manufacturing is entirely stagnant in real terms per capita.
- dragonelite 3y ago
  To use dollars produce given the amount of official or "real" inflation is kind of bad. How much electricity was used in industry, how much units of something were produced etc is a lot more interesting to keep track of.
roenxi 3y ago
In this context does it really make sense to measure the output in dollars? The major reason why China has been doing so well in the last 50 years is a dollar of manufacturing in China goes further than in the US. Just going by Taylor's response sibling to this comment; he says a PCB in the US cost $500 and China $15 - that is more than an order of magnitude efficiency improvement moving to China. $2.5T wouldn't be much to crow about with that sort of productivity gap, because that would be equivalent to less than $250B in China. Presumably PCBs are an extreme case, but it goes to show that a dollar figure doesn't tell us much about the actual capabilities of the US manufacturing sector. Given the struggles the US has had with energy [0], down 22% from their peak, it is suspicious that manufacturing is at all time highs. Something got squeezed really hard since the 70s in real terms. [0] https://ourworldindata.org/grapher/per-capita-energy-use?tab=chart&country=~USA https://ourworldindata.org/grapher/per-capita-energy-use?tab...
- foobarian 3y ago
  Similar timing to https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/ ?
willmadden 3y ago
>Manufacturing never left the US - at $2.5T of output (2021) it's easily the highest it's ever been - almost 40% higher than 10 years previous. It's not 40% higher in dollar value terms 10 years ago, that's for sure. You are leaving out the part about how the US dollar has lost value. Inflation is well in excess of 40% over the last ten years.
- willmadden 3y ago
  Why is this being downvoted? It's factual. You can't compare manufacturing growth in US Dollars over the past 10 years without adjusting for the decline in value of the underlying currency you are using to measure the growth; doing this will show "growth" when you are really just showing inflation in the currency as "growth" while concealing a decline in manufacturing in terms of real output by treating the unit of account as an absolute instead of relative measurement system. It's deceptive.
mdorazio 3y ago
I think it's largely a mismatch between type of manufacturing people want to see and type of manufacturing that's economically viable in the US. For example, people see low-margin consumer goods and electronics all the time, which largely come from China. But those same people only buy a car manufactured in the US once every decade and generally aren't buying Intel or TI chips directly. As another example, consumers are often oblivious to things around them that are made by GE. I think the more interesting question is if it would even be economically possible to have a Shenzhen in the US, given US property prices, labor force, wages, environmental laws, zoning restrictions, etc.
- fidotron 3y ago
  Shenzhen is at least the third manifestation of the electronics hotspot, after Akihabara and before that Radio Row: https://en.m.wikipedia.org/wiki/Radio_Row https://en.m.wikipedia.org/wiki/Radio_Row It definitely seems like once some of the factors you mention come into play these things lose momentum and move. Paul Krugman did some very interesting work on economic geography, with one result being that the leading region for a given sector will have a huge margin over the second player, so being in top position is very valuable.
  - saalweachter 3y ago
    Since the overall topic of this thread is "world trade destroying American electronics/manufacturing", this is especially ironic: "Radio Row was torn down in 1966 to make room for the World Trade Center." (https://en.m.wikipedia.org/wiki/Radio_Row#Demolition https://en.m.wikipedia.org/wiki/Radio_Row#Demolition)
- NoMoreNicksLeft 3y ago
  If the environment is important to you, then you might consider that offshoring to China also offshores the pollution as well, where if it were still manufactured within the US we wouldn't have the problem. It's a little disingenuous when someone claims that the US meets its climate change goals and that China doesn't. The US is able to meet those goals in part because all of the goods it consumes comes from China where it is manufactured with coal-produced power and so-on. I suspect that economic theory doesn't adequately explain some things that we need to understand better. There may be misunderstood risks in competitive advantage that we are ignoring at our peril.

by derriz 3y ago

TaylorAlexander 3y ago

You say all of this, but where in the US can I go get a PCB made, a housing injection molded, rubber seals custom cut, and have a contract manufacturer assemble everything for a modest price? If you order a small batch of custom PCBs with a five day turnaround from a fab house in the USA it costs over $500. If you order it from China they cost $15. And it's not just due to cheaper labor. They have better higher volume equipment. Edit: I’d love to find a non-state source but China claims $5T per year in manufacturing output for 2021. I wonder where the US would be if we had focused on manufacturing growth instead of offshoring production. http://english.scio.gov.cn/m/pressroom/2022-03/01/content_78077749.htm http://english.scio.gov.cn/m/pressroom/2022-03/01/content_78...

konschubert 3y ago
And better processes.
quailfarmer 3y ago
You can get a pretty high quality PCB built at Bay Area Circuits in Fremont, and assembled at Sierra in Sunnyvale. The speed is marginally slower than JLC, the cost is marginally higher and quality marginally lower than Compeq. But, you can drive there, and be on a first-name basis with your supplier. Given the extreme efficiency of international shipping logistics, I don’t think it’s reasonable to expect any given metro area to have competitive world class manufacturing of every type. The cost of real estate alone makes it hard to compete.
- TaylorAlexander 3y ago
  Last time I got a quote at Sierra it was hundreds of dollars for a basic PCB order, but that was 15 years ago. Have they gotten more competitive? And I’m not saying “every metro should have competitive world class manufacturing of every type”, which is such a strong claim as to feel strawman-ish (but I get the sense you didn’t mean to do so). I do however deeply wish we had Shenzhen-like manufacturing hubs on the east and west coasts.
  - dharma1 3y ago
    If the initial outlay for setting up Shenzen like manufacturing/electronics hub in the US was partially incentivised with govt subsidies to get it going, could it become competitive (cost/quality/scale wise) with Chinese hubs on a reasonable time horizon? There is of course a large labour cost delta and probably a skills shortage in the US that might be an obstacle for making something like this be economically sustainable/competitive - but if it could be automated sufficiently so that labour cost is less of an issue, is this even feasible in theory? I know there are some fabs being built, but beyond that is some kind of broader electronics manufacturing hub in the US conceivable? From the article it sounds like the manufacturing is staying in Asia but moving to politically allied countries where new infra is being built for this. Is it still mainly a labour cost issue?
    - deleted 3y ago
      [deleted]
  - petsfed 3y ago
    Its been a couple of years since I last went to Sierra with an order, but they're pretty competitive with other domestic board houses. About 7 years ago, they were were the cheapest for quick-turn turn-key builds of low-complexity boards in ultra low-volumes (>50), so I had them do a lot of stuff for me.
    - TaylorAlexander 3y ago
      > they're pretty competitive with other domestic board houses My complaint is that domestic board houses are super expensive, so I meant competitive with Chinese production. The person replying to me above said they are "marginally more expensive" but another commenter here went through the full quoting process and got a price that is about 8x higher than a reputable fab in China, which is not "marginally more expensive".
dukeyukey 3y ago
> I wonder where the US would be if we had focused on manufacturing growth instead of offshoring production. Probably poorer for one. Every American working in a state-subsidised manufacturing role is one less American working in an industry where the US has a competitive advantage, like software or energy production. Of course if war breaks out that goes out the window.
- bee_rider 3y ago
  Energy production is nice to have if war breaks out. It is unlikely, I think (thankfully) that we’ll have an existential war with China, because we’re both nuclear armed.
  - dukeyukey 3y ago
    It doesn't even have to be a war with China, or involving the US. Like, say Panama has a civil war that shuts down the canal. That adds a huge cost to shipping, going around South America. Or say Europe (but not the US) gets involved in a war with Russia, redirecting the _massive_ European manufacturing capacity to local needs instead of exports.
    - anovikov 3y ago
      But well if that happens, it's so easy to take Panama back over just simply.
      - bee_rider 3y ago
        It is hard to speculate about this sort of stuff. Container ships going through canals and other tight spaces are pretty vulnerable; even if you “take over,” it could be hard to stabilize things to the point where nobody can sneak around shooting rockets and whatnot. See the Red Sea situation, which is different in many ways, but goes to show that small groups with rockets can still be a big pain. All that is just to say, it is nice to have local production of stuff like food and energy that is needed to keep things going.
- 3y ago
imtringued 3y ago
It was three years ago but I got a quote for 10 boards at Aisler and it cost significantly less than 100€, possibly 50€ for all 10 boards. Meanwhile the Chinese competitors always failes the DRC due to laughably bad tolerances. I'm talking about edge mounted through hole connectors, not some deeply buried via barely squeezed in.
jLaForest 3y ago
Sensational nonsense, OSHpark does quick turn custom pcbs for cheap in the US
NegativeK 3y ago
You two might not be disagreeing. America can absolutely lose out on low-cost parts while increasing its manufacturing base. It's an insanely large field.
- TaylorAlexander 3y ago
  Well I'm developing an open source farming robot and I just find myself constantly dreaming of spending a month in china to supercharge development of our product. I need better test equipment, I need to shop motors, I need to iterate on PCB design and test, fab, test, fab, test, fab. And the best I can do is look at a little window on my computer on to aliexpress or alibaba and hope I can find something decent, and wait a week or two or three for it to arrive. I would be SO MUCH FASTER at developing my farming robot if I was in a manufacturing mecca like Shenzhen. That is what I wish we could have here in the US. Not a small number of high value manufacturers, but the whole damn chain. Not only would it make our development faster, it would make our products better and cheaper and it would make our lives better.

nottorp 3y ago

> it's easily the highest it's ever been - almost 40% higher than 10 years previous Just to nitpick, the first inflation calculator i opened told me us inflation rate across the last 10 years has been 31.8%. So there has been some growth but not as much as you make it look.

andruby 3y ago
Addition the inflation context is great and does indeed make it seem less high. I think OP was mostly saying that manufacturing hasn't decreased, which is what the public narative is proclaiming.
- vikingerik 3y ago
  Per capita matters too. The total hasn't decreased but hasn't increased either considering that. Besides the 30% inflation, there was also ~10% population growth in the ten years. The nominal 40% dollar value is entirely accounted for by those. US manufacturing is entirely stagnant in real terms per capita.
dragonelite 3y ago
To use dollars produce given the amount of official or "real" inflation is kind of bad. How much electricity was used in industry, how much units of something were produced etc is a lot more interesting to keep track of.

roenxi 3y ago

In this context does it really make sense to measure the output in dollars? The major reason why China has been doing so well in the last 50 years is a dollar of manufacturing in China goes further than in the US. Just going by Taylor's response sibling to this comment; he says a PCB in the US cost $500 and China $15 - that is more than an order of magnitude efficiency improvement moving to China. $2.5T wouldn't be much to crow about with that sort of productivity gap, because that would be equivalent to less than $250B in China. Presumably PCBs are an extreme case, but it goes to show that a dollar figure doesn't tell us much about the actual capabilities of the US manufacturing sector. Given the struggles the US has had with energy [0], down 22% from their peak, it is suspicious that manufacturing is at all time highs. Something got squeezed really hard since the 70s in real terms. [0] https://ourworldindata.org/grapher/per-capita-energy-use?tab=chart&country=~USA https://ourworldindata.org/grapher/per-capita-energy-use?tab...

foobarian 3y ago
Similar timing to https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/ ?

willmadden 3y ago

>Manufacturing never left the US - at $2.5T of output (2021) it's easily the highest it's ever been - almost 40% higher than 10 years previous. It's not 40% higher in dollar value terms 10 years ago, that's for sure. You are leaving out the part about how the US dollar has lost value. Inflation is well in excess of 40% over the last ten years.

willmadden 3y ago
Why is this being downvoted? It's factual. You can't compare manufacturing growth in US Dollars over the past 10 years without adjusting for the decline in value of the underlying currency you are using to measure the growth; doing this will show "growth" when you are really just showing inflation in the currency as "growth" while concealing a decline in manufacturing in terms of real output by treating the unit of account as an absolute instead of relative measurement system. It's deceptive.

mdorazio 3y ago

I think it's largely a mismatch between type of manufacturing people want to see and type of manufacturing that's economically viable in the US. For example, people see low-margin consumer goods and electronics all the time, which largely come from China. But those same people only buy a car manufactured in the US once every decade and generally aren't buying Intel or TI chips directly. As another example, consumers are often oblivious to things around them that are made by GE. I think the more interesting question is if it would even be economically possible to have a Shenzhen in the US, given US property prices, labor force, wages, environmental laws, zoning restrictions, etc.

fidotron 3y ago
Shenzhen is at least the third manifestation of the electronics hotspot, after Akihabara and before that Radio Row: https://en.m.wikipedia.org/wiki/Radio_Row https://en.m.wikipedia.org/wiki/Radio_Row It definitely seems like once some of the factors you mention come into play these things lose momentum and move. Paul Krugman did some very interesting work on economic geography, with one result being that the leading region for a given sector will have a huge margin over the second player, so being in top position is very valuable.
- saalweachter 3y ago
  Since the overall topic of this thread is "world trade destroying American electronics/manufacturing", this is especially ironic: "Radio Row was torn down in 1966 to make room for the World Trade Center." (https://en.m.wikipedia.org/wiki/Radio_Row#Demolition https://en.m.wikipedia.org/wiki/Radio_Row#Demolition)
NoMoreNicksLeft 3y ago
If the environment is important to you, then you might consider that offshoring to China also offshores the pollution as well, where if it were still manufactured within the US we wouldn't have the problem. It's a little disingenuous when someone claims that the US meets its climate change goals and that China doesn't. The US is able to meet those goals in part because all of the goods it consumes comes from China where it is manufactured with coal-produced power and so-on. I suspect that economic theory doesn't adequately explain some things that we need to understand better. There may be misunderstood risks in competitive advantage that we are ignoring at our peril.