Chip shortage future fix
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Fleet Mechanic
Joined: Mar 2021
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Chip shortage future fix
FTE Community Team
Joined: Mar 2017
Posts: 3,344
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From: Florida
Good move intel!!!
https://www.msn.com/en-us/money/comp...age/ar-AAT15df
https://www.msn.com/en-us/money/comp...age/ar-AAT15df
Interesting article. My fear is that offshore chip cost will price out US manufactured chips. It will be impossible to compete due to labor cost differences. We are all conditioned to low prices due to some asian companies paying employees a daily wage of 2 fish heads and a bowl of rice.
I retired from a high tech company where before I retired all manufacturing was eventually moved overseas due to cost. Manufacturing went to Japan, , China and Mexico. They even outsourced R&D, and call centers to India, Philippines and Jamaica. Eventually they pulled back from call centers in Jamaica because complaints that it was difficult to understand due to Jamaican accents and rep attitudes.
Last week I spent a few hours on the phone with T-Mobile. Of the 4 reps I talked to in the Philippines I only could understand one clearly.
I agree we need to reduce our dependency on offshore manufacturing and support but we need to be willing to pay the premium for US based manufacturing and support.
Lead Driver
Joined: Dec 2020
Posts: 8,640
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I was just thinking about the "chip" shortage yesterday after seeing a sea of new Lexus suv's parked bumper to bumper on a nearby Toyota lot. Is there still a "chip" shortage? I would guess they had over 200 suv's of various sizes, with maybe a half dozen cars.
Anytime we as a country become more self sufficient I think it's a good thing. Doing so in a cost competitive manner will be the tricky part. Although, I'm not in any way familiar with that industry, it would seem that automation would play a big role in it.
Anytime we as a country become more self sufficient I think it's a good thing. Doing so in a cost competitive manner will be the tricky part. Although, I'm not in any way familiar with that industry, it would seem that automation would play a big role in it.
Fleet Mechanic
Joined: Dec 2021
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The rest of the world will buy the cheaper product from the sources we once depended on as well. Many of us are quick to say " cheap Chinese junk" but at the end of the day when the "cheap Chinese junk" is 10% the price of the U.S. made product, we all know we are going to buy the cheaper one. The real sad part is there is a U.S. market markup on the imported items and its not because of shipping costs and logistics. You can buy items that are the exact same product that you would find on U.S. shelves directly from the manufactures in China and other countries for pennies on the dollar and have them shipped to the U.S.
Mountain Pass
Joined: Oct 2012
Posts: 163
Likes: 59
From: Northern Illinois
The U.S has been down this road before, think Silicon Valley. I'm not sure they even manufacture chips there anymore, other than some R&D stuff.
3 Years is a long time before the first product rolls of the line, like Joe T mentions, it's not labor intensive when it's up and running but getting there is a huge nut
i guess we can just turn to the treasury again...
3 Years is a long time before the first product rolls of the line, like Joe T mentions, it's not labor intensive when it's up and running but getting there is a huge nut
i guess we can just turn to the treasury again...
Lead Driver
Joined: Dec 2020
Posts: 8,640
Likes: 2,435
The U.S has been down this road before, think Silicon Valley. I'm not sure they even manufacture chips there anymore, other than some R&D stuff.
3 Years is a long time before the first product rolls of the line, like Joe T mentions, it's not labor intensive when it's up and running but getting there is a huge nut
i guess we can just turn to the treasury again...
3 Years is a long time before the first product rolls of the line, like Joe T mentions, it's not labor intensive when it's up and running but getting there is a huge nut
i guess we can just turn to the treasury again...
https://www.cbsnews.com/amp/news/sem...es-2021-05-02/
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Fleet Mechanic
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The California-based tech giant said the project represents the largest single private-sector investment in Ohio history, and is expected to create 3,000 Intel jobs and 7,000 construction jobs over the course of the build. The mega-site will span some 1,000 acres in Licking County, a suburb of Columbus, with construction expected to begin in late 2022 and chip production expected to begin in 2025.
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Mountain Pass
Joined: Oct 2012
Posts: 163
Likes: 59
From: Northern Illinois
Here is a story from last year that touches on all your points. Decline in US chip manufacturing (only 1 in AZ), huge cost, and yep, government $$$.
https://www.cbsnews.com/amp/news/sem...es-2021-05-02/
https://www.cbsnews.com/amp/news/sem...es-2021-05-02/
The California-based tech giant said the project represents the largest single private-sector investment in Ohio history, and is expected to create 3,000 Intel jobs and 7,000 construction jobs over the course of the build. The mega-site will span some 1,000 acres in Licking County, a suburb of Columbus, with construction expected to begin in late 2022 and chip production expected to begin in 2025.
Drove the bus of a family construction company for 30+ years, totally 100% for bringing everything to our shores but the world is a big ship and it's hard to turn...(stold that line from a tile setter)
Wiser by FTE
Joined: Jan 2010
Posts: 2,837
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In the USA we have the capital, intelligence, and the need/will to make these components here!
We have seen what happens when the lowest priced products can't be delivered, canceled or delayed finished goods.
We will pay higher prices for these parts, we are experiencing this in the construction industry now. If we invest in making
the best products, people will buy/use them. Lets worry about exporting later and get our manufacturing ramped up now!
We have seen what happens when the lowest priced products can't be delivered, canceled or delayed finished goods.
We will pay higher prices for these parts, we are experiencing this in the construction industry now. If we invest in making
the best products, people will buy/use them. Lets worry about exporting later and get our manufacturing ramped up now!
Hotshot
Joined: Mar 2017
Posts: 10,183
Likes: 1,379
From: Chaz
No idea why some of these components are not made in North America.
Even the small general little parts and pieces that Asian manufactures pump out.
Its all made by automated machines.
My family had a parts manufacturing business and I remember they complained about dumping of products from Asian countries. Guess they actually did have a long plan (China)…. Figured as much…
Even the small general little parts and pieces that Asian manufactures pump out.
Its all made by automated machines.
My family had a parts manufacturing business and I remember they complained about dumping of products from Asian countries. Guess they actually did have a long plan (China)…. Figured as much…
Cargo Master
Joined: Nov 2020
Posts: 2,073
Likes: 1,027
From: Michigan
How about just dropping ancient chips? You have engineers who want to design the sleek new display or new 13 stone heated butt warming seats, but won't change the chips that run it to something made since 2001. Millions of cell phones, more then vehicles, are sold each year. Those chips could more then run your vehicle systems, yet what drives this is people not willing to change, just want different window dressing.
Laughing Gas
Joined: Dec 2021
Posts: 757
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No doubt that chips made in the US will be more expensive than those made overseas. It's a site supply and demand issue, demand has remained the same or gone up slightly, as a result prices have climbed (dramatically in some instances). I would imagine if you could increase the available product in the marketplace by using the more expensive chips, the consumer would continue to buy. Interestingly what this does is then reduce consumption from the foreign makers. When that happens, I expect you'll see them find a way to get their chips to our market.
There's numerous examples of this exercise we can use. As said above, competition is a very good thing for the American consumer. I hope companies are rushing to get chip operations running here.
There's numerous examples of this exercise we can use. As said above, competition is a very good thing for the American consumer. I hope companies are rushing to get chip operations running here.
Fleet Mechanic
Joined: Jul 2019
Posts: 1,654
Likes: 697
How about just dropping ancient chips? You have engineers who want to design the sleek new display or new 13 stone heated butt warming seats, but won't change the chips that run it to something made since 2001. Millions of cell phones, more then vehicles, are sold each year. Those chips could more then run your vehicle systems, yet what drives this is people not willing to change, just want different window dressing.
"Ancient" chips in the technology market are only 3 to 5 years old. The auto industry will always lag behind the chips in cell phones, computers and electronic games. Those platforms thrive on 2 to 3 year life cycles and customers who are who enthusiastically discard an operating device for the latest being offered.
It's great that Intel is moving chip production to the US and others are sure to follow. But the recent shortage isn't simply an offshore problem. It is a labor shortage resulting from a worldwide pandemic. Even if the chips were made here, it doesn't mean we wouldn't have chip shortages in the automotive industry due to production issues, transportation issues or higher priority uses (cell phones and games).