5 ms·

Much of this I assume is due to labor costs. We're already seeing some basic techs start to return back to higher-tech, higher-labor-cost countries (like the US

Much of this I assume is due to labor costs. We're already seeing some basic techs start to return back to higher-tech, higher-labor-cost countries (like the US Gulf Coast) because of automation improvements. So now things that have historically been low-hanging fruit for countries trying to industrialize (and therefore able to provide the labor cheaply) are being taken away from them, because now one systems engineer can oversee, say, an entire textiles or smelting or wiring facility. It's only a matter of time until this bleeds further up the ladder, in my opinion, and electronics isn't too far up the ladder from wiring.

tokioyoyo 2y ago
> We're already seeing some basic techs start to return back to higher-tech, higher-labor-cost countries Is there a place where I can look up what's being brought up back to North America? Last time I tried searching for it, all I found was: 1) TSMC et al. building big factories over here (which, I think, is a bit different because of subsidies, and realpolitik) 2) People complaining in pro-manufacturing Twitter posts how nobody wants to automate the existing factories
Workaccount2 2y ago
That's part of it for sure, but really the killers are that China has an insane electronics pipeline from component manufacturing to distribution, insane investment in electronics manufacturing R&D, and a supply a fresh young heads to keep things moving forward. They also do insane volume and can buy everything in quantity 10 billion (exaggeration- sort of, but economies of scale to the max). The US has basically no domestic component manufacturing, no central hubs of electronics parts distribution, no young talent entering the field, and no new shops entering the market with cutting edge automation/capabilities. And it doesn't make much sense from a financial POV either. A team of one writing an AI wrapper "electronic parts picker" SaaS app will pull more money than a team of 50 building a board house, and they don't need $50 million upfront for capex.
- nitwit005 2y ago
  If having everything efficiently in one spot was the key factor, industry would all still be located in the places the industrial revolution happened. Shipping is extremely cheap these days. You can move any manufacturing you want, if you're determined to do so.
  - nine_k 2y ago
    One spot is a key factor in the sense of the common jurisdiction and culture, and also access to shipping routes. Hence Shenzhen. > places the industrial revolution happened It's still very much there on the map of Europe: https://en.wikipedia.org/wiki/Blue_Banana https://en.wikipedia.org/wiki/Blue_Banana
  - sangnoir 2y ago
    > Shipping is extremely cheap these days. You can move any manufacturing you want, if you're determined to do so. Sure, this works when you know exactly what you want. If you're prototyping or looking for a replacement component, those who can walk/drive to visit 10 potential suppliers' factories in a day have a competitive advantage versus waiting 10 business days for the samples to arrive. Having a concentration of jobs in one place also results in having a concentration of domain experts in that place; forming a self-sustaining ecosystem. A lot of local governments the world over have tried and failed to replicate Silicon Valley, but without the critical mass of academia, technologists and VCs. Trying to replicate Shenzen without the machinists and injection mold greybeards is equally fruitless.
    - nitwit005 2y ago
      Again, if this was such an advantage, there would be little manufacturing in Asia at all. It would have never been economical.
      - sangnoir 2y ago
        Manufacturing in Shenzen was economical, just not as maximally profitable as it is now. Economies of scale are a thing. Apple, and Google could have been formed anyway on earth, but there were advantages of being in Silicon Valley that compounded the growth into the behemoths they are now without worrying about where to source talent.
duped 2y ago
> Much of this I assume is due to labor costs. It's not, it's network effects/economies of scale. Everything is highly automated already. > We're already seeing some basic techs start to return back to higher-tech, higher-labor-cost countries (like the US Gulf Coast) because of automation improvements. China is better at automating electronics manufacturing than the United States and has a decade or two lead on us. They also have policy advantages the US can't dream of, like building a new set of factories in 3 years instead of 5-7, with housing for all the workers and centralized water/power/gas utilities. The government is also capable of writing blank checks and forcing the finance industry to fund things that they otherwise wouldn't. The current administration is not smart or agile enough to address the root causes of the decline in American electronics manufacturing and motivated by individual greed instead of national dominance. Look at the Chinese auto industry to see how they're able to mobilize sectors much faster than anyone else. The US cannot hope to compete using a 20th century model of globalized economies where we pretend China is only competing with sweatshop labor. That has not been true for 25 years.
- hx8 2y ago
  > The current administration is not smart or agile enough to address the root causes of the decline in American electronics manufacturing and motivated by individual greed instead of national dominance. It's naive to think that China's politicians are not motivated by individual greed. American politicians are, on average, about as greedy as politicians in other countries.
  - duped 2y ago
    We're not talking about your average American politician, we're talking about Donald Trump and his inner circle. They are demonstrably more corrupt and greedy than the average American politician. Tangentially, they're a lot stupider than the average politician in the world, and whether they're as corrupt as they act or just incapable of severing personal and professional/institutional gains is unclear.
- bufferoverflow 2y ago
  Everything is not automated. That's a ridiculous claim. Almost half a billion people in China are working in manufacturing. Plenty of manual labor. It's similar in the US. Even modern giga factories employ thousands of people.

tokioyoyo 2y ago

> We're already seeing some basic techs start to return back to higher-tech, higher-labor-cost countries Is there a place where I can look up what's being brought up back to North America? Last time I tried searching for it, all I found was: 1) TSMC et al. building big factories over here (which, I think, is a bit different because of subsidies, and realpolitik) 2) People complaining in pro-manufacturing Twitter posts how nobody wants to automate the existing factories

Workaccount2 2y ago

That's part of it for sure, but really the killers are that China has an insane electronics pipeline from component manufacturing to distribution, insane investment in electronics manufacturing R&D, and a supply a fresh young heads to keep things moving forward. They also do insane volume and can buy everything in quantity 10 billion (exaggeration- sort of, but economies of scale to the max). The US has basically no domestic component manufacturing, no central hubs of electronics parts distribution, no young talent entering the field, and no new shops entering the market with cutting edge automation/capabilities. And it doesn't make much sense from a financial POV either. A team of one writing an AI wrapper "electronic parts picker" SaaS app will pull more money than a team of 50 building a board house, and they don't need $50 million upfront for capex.

nitwit005 2y ago
If having everything efficiently in one spot was the key factor, industry would all still be located in the places the industrial revolution happened. Shipping is extremely cheap these days. You can move any manufacturing you want, if you're determined to do so.
- nine_k 2y ago
  One spot is a key factor in the sense of the common jurisdiction and culture, and also access to shipping routes. Hence Shenzhen. > places the industrial revolution happened It's still very much there on the map of Europe: https://en.wikipedia.org/wiki/Blue_Banana https://en.wikipedia.org/wiki/Blue_Banana
- sangnoir 2y ago
  > Shipping is extremely cheap these days. You can move any manufacturing you want, if you're determined to do so. Sure, this works when you know exactly what you want. If you're prototyping or looking for a replacement component, those who can walk/drive to visit 10 potential suppliers' factories in a day have a competitive advantage versus waiting 10 business days for the samples to arrive. Having a concentration of jobs in one place also results in having a concentration of domain experts in that place; forming a self-sustaining ecosystem. A lot of local governments the world over have tried and failed to replicate Silicon Valley, but without the critical mass of academia, technologists and VCs. Trying to replicate Shenzen without the machinists and injection mold greybeards is equally fruitless.
  - nitwit005 2y ago
    Again, if this was such an advantage, there would be little manufacturing in Asia at all. It would have never been economical.
    - sangnoir 2y ago
      Manufacturing in Shenzen was economical, just not as maximally profitable as it is now. Economies of scale are a thing. Apple, and Google could have been formed anyway on earth, but there were advantages of being in Silicon Valley that compounded the growth into the behemoths they are now without worrying about where to source talent.

duped 2y ago

> Much of this I assume is due to labor costs. It's not, it's network effects/economies of scale. Everything is highly automated already. > We're already seeing some basic techs start to return back to higher-tech, higher-labor-cost countries (like the US Gulf Coast) because of automation improvements. China is better at automating electronics manufacturing than the United States and has a decade or two lead on us. They also have policy advantages the US can't dream of, like building a new set of factories in 3 years instead of 5-7, with housing for all the workers and centralized water/power/gas utilities. The government is also capable of writing blank checks and forcing the finance industry to fund things that they otherwise wouldn't. The current administration is not smart or agile enough to address the root causes of the decline in American electronics manufacturing and motivated by individual greed instead of national dominance. Look at the Chinese auto industry to see how they're able to mobilize sectors much faster than anyone else. The US cannot hope to compete using a 20th century model of globalized economies where we pretend China is only competing with sweatshop labor. That has not been true for 25 years.

hx8 2y ago
> The current administration is not smart or agile enough to address the root causes of the decline in American electronics manufacturing and motivated by individual greed instead of national dominance. It's naive to think that China's politicians are not motivated by individual greed. American politicians are, on average, about as greedy as politicians in other countries.
- duped 2y ago
  We're not talking about your average American politician, we're talking about Donald Trump and his inner circle. They are demonstrably more corrupt and greedy than the average American politician. Tangentially, they're a lot stupider than the average politician in the world, and whether they're as corrupt as they act or just incapable of severing personal and professional/institutional gains is unclear.
bufferoverflow 2y ago
Everything is not automated. That's a ridiculous claim. Almost half a billion people in China are working in manufacturing. Plenty of manual labor. It's similar in the US. Even modern giga factories employ thousands of people.