Chipmonk, first off, I know something about Europe. That's where I grew up. But much more to the point, you can be certain that if offshoring the manufacturing process was going to cost more than manufacturing at home, the trend would soon reverse itself. Or offshoring any other aspect of your business, for that matter.
And, on occasion, it happens.
I think you are trying way too hard to turn simple business math into a class warfare struggle. If the yield of Chinese fabs becomes low enough, you will see a shift occur away from China.
Might I suggest you take some on-line courses ( even better at a brick n mortar University ) on the History of Science & Technology and how culture affects it. It might also help if you travel a little in Europe & Asia and compare what you see.
Why do Chinese Fabs have such low yields ? Despite low labor cost and many US educated Engr.s why is SMIC still in the dumps ?
When it comes to manufacturing the common thread between a successful Wafer Fab and a prime Winery is a love and respect for the material you are working with and a passion for the crafts. When you try to abstract it with the laws of economics or mere circuit design, failure soon follows.
Howdy Peter :
Thx for taking up my "challenge" and putting up this article to address the first 2 of my open questions. Now do take a shot at my 3 rd question too i,e. whither goeth the US ? ( You are also quite welcome to comment on my short 'outburst' in response to Bert22306 ).
BTW since I myself am involved in Fabs and the largest and most modern Fabs in the world always tend to start in my sun-drenched Valley, as a Physicist I would say that one of the main reasons behind why the so-called Silicon Valley got out of Fabs so willingly is because they were dominated by EEs who left much to be desired in the way of solid state physics, materials science or processing.
Once again, Chipmonk, you simply enjoy ignoring facts. Perhaps to advance your odd agenda, whatever it is.
All western countries have gotten out of manufacturing of loads of products they used to make in-house. Even if they continue to export certain items, like wine or fabrics. Look at what happened to the UK aircraft and auto industries. Look at how the auto comapnies in France and Italy have consolidated down to one. Is it possible you miss all of these shifts?
It's obvious why these things happen. Just go to your neighborhood Walmart and ask the throngs why they shop there. As individuals act, so do corporations. No need to create some neo-Marxist nonsense to explain the obvious.
Excellent article Peter. As a fellow Brit who has lived abroad in Germany and America, I agree completely with the analysis. I think another telling point is the way that modern technology requires a conveyor-belt approach to development and investment. You can't stand back having developed a technology and wait for the world to buy it, you need to already be investing in the next generation. For some reason I think the British culture has been particularly bad at this aspect - the need for relentless drive.
There you go again !
Regurgitating simple - minded, superficial & turgid Ayn Rand - ian generalizations that reality has proven to be ridiculously off the mark again and again.
Countries / cultures like Germany, Japan, France ( and to some extent even Italy ) will never forsake manufacturing, because they enjoy / respect the Arts, Crafts and Skills.
Despite affecting veneers of democracy to mislead the US, England on the other hand has always remained class - ridden and the toffs there have always considered it below their dignity to work for a living and instead live off( Churchill's daily ration of Champagne & Cigars ) the fat of others work. England, being the birthplace of the "satanic mills", instead of emulating their Teutonic cousins a la the Krupps, had already started to de-industrialize as early as the Edwardian period and gradually lost out to rising Germany ending up in that War of British Jealousy ( & Churchillian Manipulation of his country - cousin Americans ) - otherwise known as the WW I ( which inevitably begat WW II ).
More recently the US, having gotten re-colonized w/ anglo-philia / right - winger monarchism during the Reagan - Thatcher duopoly, ditched its honest Germanic backbone of public Universities / manufacturing in the Mid west and turned to the Biz & Law schools / speculation / out-sourcing favored in the Coasts and the South dominated by the ethnic English ( no accident that Wal - Mart is from Arkansas ) and ever since we have been sliding down the same greased skids of "free" trade as dear old Blighty.
As semiconductor manufacturing becomes more automated the cost of labor becomes a relatively minor part of the total cost. Instead, because it is so capital intensive, semiconductor manufacturing today thrives based on cheap (borrowed) money and the cost of water, electricity, and environmental compliance.
I think that there is a critical mass of activity within an industry which has to be present before people are willing to invest the time and money to developing it.
Below some threshold the hurdles people face in trying something new will swamp them...even if their idea is proven and is the right one. They will probably be convinced into setting modest goals for their projects...whether they achieve them or not eventually the excitement just fizzles out.
But above a certain threshold, all kinds of positive feedback effects will take place...newcomers will bet the farm trying to get in on the action and any and all crazy schemes will get funded.
With clean energy China is moving ahead and investing across the board while the US is just taking baby steps...more concerned about the cost than about the potential rewards. Like the post-war UK, it just doesn't have the stomach to invest in creating a new world.
Thanks Peter for a thought-provoking piece. Makes me wonder what the world will look like from a major manufacturing center perspective when/if China and India each get to the point of determining for themselves that exiting manufacturing is inevitable. Since each of these countries are so large in population, will the wave of manufacturing-entry and manufacturing-exit sweep across each country from more-affluent coastal areas to deep interior sites? And where in the world is next after these two great countries are completely out of manufacturing?
Blog That A-Ha Moment Larry Desjardin 11 comments Have you ever had an a-ha moment? Sure, you have. The Merriam-Webster dictionary defines it as "a moment of sudden realization, inspiration, insight, recognition, or ...