U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 05-28-2020, 07:00 AM
 
4,516 posts, read 3,907,405 times
Reputation: 10766

Advertisements

Since the late 1990s, nearly all high tech devices have been manufactured in Asia, initially in Japan, Korea, and Taiwan, later in mainland China, Malaysia, and Vietnam.

Why has this happened, and is it likely that some electronics manufacturing might come back to the West? What obstacles might be preventing this?

I have my own theories, based on general knowledge of current events, but I'm not in the hardware business (well, actually I do work for a company that manufactures various types of devices with factories worldwide, but I'm not on the hardware side).

It seems to me that Westerners have a pretty good grip on research and invention, but when it comes to the nitty gritty of steadily engineering, assembling, and improving fundamental components, we lack long term focus.

The Asians, however, seem to have the patience to do repetitious, detailed work like soldering chips and other parts into tiny circuit boards. Also, they now have almost a total monopoly on chip foundries and other fundamentals of electronic products like LED displays.

This last part puzzles me the most. Why can't someone set up a plant to make LED displays in, say, Florida or Arizona, that is equally competitive, given that the components don't require tremendous hand work? Literally, it could be a machine etching or extruding some kind of material with an almost completely automated process.
Reply With Quote Quick reply to this message

 
Old 05-28-2020, 07:07 AM
 
Location: The Triad (NC)
30,209 posts, read 66,715,215 times
Reputation: 35671
Quote:
Originally Posted by blisterpeanuts View Post
Why did the U.S. stop making (the simpler consumer market) electronics?

Since the late 1960s....

^^ Fixed your question a bit.
Reply With Quote Quick reply to this message
 
Old 05-28-2020, 07:18 AM
 
3,548 posts, read 2,252,435 times
Reputation: 8006
Because the big money isn’t in manufacturing. That’s largely viewed as a commodity that needs to be done cheaper within reason for price and quality.

The markup is in design, marketing, after market support, ect. I’d rather have the rest of the value chain and the jobs from it.
Reply With Quote Quick reply to this message
 
Old 05-28-2020, 07:31 AM
Status: "Biding my time." (set 14 days ago)
 
Location: Warwick, RI
3,178 posts, read 4,307,416 times
Reputation: 5281
Quote:
Originally Posted by Thatsright19 View Post
Because the big money isn’t in manufacturing. That’s largely viewed as a commodity that needs to be done cheaper within reason for price and quality.

The markup is in design, marketing, after market support, ect. I’d rather have the rest of the value chain and the jobs from it.

This. Your question reminds me of one of my favorite movie lines..."American components, Russian components, all made in Taiwan!"
Reply With Quote Quick reply to this message
 
Old 05-28-2020, 07:32 AM
 
Location: Western NY
665 posts, read 718,723 times
Reputation: 795
A lot of it had to do with maximizing profits in the short term, which also means in the short term minimize production costs. It also means sacrifice the future for the present or short term.

In the long run it is always best to do R&D, design, manufacturing, or any other aspect in US. In short terms it can make things look real good to do the opposite or do it all somewhere else (except the sales).

Motorola was once the largest semiconductor manufacturing company, largest cell phone maker, police radios and much more. It sure looked good to start putting cell phone plants in Brazil and Malaysia where hiring people cost nothing. It sure looked good to spin out that semiconductor division into Taiwan. Doing both of those things made cash look like king and things looked great in short term. But meanwhile Apple and others came out with cell phones while Motorola was worried about setting up cheap production costs in Brazil and Malaysia. It looked good in spin out the semiconductors but without that division it is a fraction the company it once was and it opened things up to a flood of foreign competition since none of it is in US now. Now Motorola still makes police radios, yes and the stock is a good stock, but they are 1/10 the company it could be if it had focused on the long run and not just the short run. I leave lots out here but you can read stories for more details.

In the short run so many things are done to make things look good temporarily, but in long run you lose out. People got bonus for making Motorola 1/10 the company it could be today, they made the stock rise and more valuable. Of course again I leave lots out here but you can read stories for more details and beyond this short summary. It is short term thinking that is the problem.
Reply With Quote Quick reply to this message
 
Old 05-28-2020, 07:37 AM
 
7,648 posts, read 3,605,936 times
Reputation: 21780
Rather than investing in improved manufacturing processes, these companies have offshored assembly to places with lower hourly labor costs. Basically they just throw direct labor at it. (This is why the statement "the jobs are lost to automation" is incorrect; if you look at those Asian factories, they're swimming in direct labor, they're not highly automated.)


Furthermore, by outsourcing much of their work to contract manufacturers, the companies whose names go on the products also reduce their capital investment and the costs of maintaining a manufacturing process and workforce.
Reply With Quote Quick reply to this message
 
Old 05-28-2020, 08:11 AM
 
Location: The Triad (NC)
30,209 posts, read 66,715,215 times
Reputation: 35671
Quote:
Originally Posted by turf3 View Post
Rather than investing in improved manufacturing processes, these companies have off-shored...
Not just these electronic companies...
virtually every business that was dirty or dangerous or the owner was opposed to union rules.

Quote:
(This is why the statement "the jobs are lost to automation" is incorrect...
a) Not so much. b) Semantics.
Had those companies rebuilt in the US you can be certain the new (cleaner & safer) machinery and processes they would install
would require a whole lot FEWER man hours per ton of product output than had been the case before. The problem is that no one
really made this clear to the former workers who continued to produce replacement workers for jobs that would no longer exist.
That excess supply of the no/low skilled has been allowed, even encouraged, to reach epidemic proportion.
Reply With Quote Quick reply to this message
 
Old 05-28-2020, 08:24 AM
 
Location: East of Seattle since 1992, originally from SF Bay Area
32,335 posts, read 58,927,575 times
Reputation: 35357
I had a sign business for 26 years, and at the time I closed up in the recession (2008) was paying my last employee $14/hour. About a year before I had a visit from a woman who was offering a service where I would send the artwork (data files) to her people in China who would produce my signs for about 1/3 of what it cost me to make them, and that included shipping. I passed because the turn-around time was too long, but also because I wasn't about to contribute to the loss of jobs here. With electronics, and most every other consumer items, it's hard to compete with other countries that don't have the same labor laws.
Reply With Quote Quick reply to this message
 
Old 05-28-2020, 08:37 AM
 
Location: Washington Park, Denver
8,082 posts, read 7,505,926 times
Reputation: 9105
Quote:
Originally Posted by TestEngr View Post
A lot of it had to do with maximizing profits in the short term, which also means in the short term minimize production costs. It also means sacrifice the future for the present or short term.

In the long run it is always best to do R&D, design, manufacturing, or any other aspect in US. In short terms it can make things look real good to do the opposite or do it all somewhere else (except the sales).

Motorola was once the largest semiconductor manufacturing company, largest cell phone maker, police radios and much more. It sure looked good to start putting cell phone plants in Brazil and Malaysia where hiring people cost nothing. It sure looked good to spin out that semiconductor division into Taiwan. Doing both of those things made cash look like king and things looked great in short term. But meanwhile Apple and others came out with cell phones while Motorola was worried about setting up cheap production costs in Brazil and Malaysia. It looked good in spin out the semiconductors but without that division it is a fraction the company it once was and it opened things up to a flood of foreign competition since none of it is in US now. Now Motorola still makes police radios, yes and the stock is a good stock, but they are 1/10 the company it could be if it had focused on the long run and not just the short run. I leave lots out here but you can read stories for more details.

In the short run so many things are done to make things look good temporarily, but in long run you lose out. People got bonus for making Motorola 1/10 the company it could be today, they made the stock rise and more valuable. Of course again I leave lots out here but you can read stories for more details and beyond this short summary. It is short term thinking that is the problem.
I disagree that it’s always better in the long term. If you are in a competitive industry, how can you maintain long term viability if your cost basis is higher? Production costs are table stakes.
Reply With Quote Quick reply to this message
 
Old 05-28-2020, 08:56 AM
 
Location: Western NY
665 posts, read 718,723 times
Reputation: 795
Quote:
Originally Posted by SkyDog77 View Post
I disagree that it’s always better in the long term. If you are in a competitive industry, how can you maintain long term viability if your cost basis is higher? Production costs are table stakes.

So for example, Motorola which had prototype cell phone like Apple released in the iphone, but instead chose to focus like you are thinking on the short term and production costs lets see what happened. Well, if I recall it was not Motorola who won that battle. If you see a Motorola phone today it is a Lenovo product, not connected to the US Motorola corporation, not made by Motorola, no profits today go to the remains of Motorola. By doing R&D, design and manufacturing here in the US, yes at great cost, you are on top of the field or at least were at one time, though you still can be. You can be first to market, you can lead, and one needs to lead in more than just making labels/stickers to put on a product. The way it is with a US label on a overseas product, yes it is cheap, but it is a downhill battle that is sure to be lost to an overseas product while people hate the cheap quality and poor performance. In some ways Apple putting some design here and manufacturing overseas mixes the model, but Apple isn't making new products mostly either. If you want to lead, do it in the US to win the long term. Always. But do it overseas if you like being cheap. Yes, you will be cheap and it looks good in short term only. You will lose though long run, maybe you make stickers to go on products I guess.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2020, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top