The U.S. Takes Control Of Its Tech Destiny – Forbes

The push to bring manufacturing back to the U.S. spells major changes to industries, especially … [+] tech.
In my column last week, I discussed the imperative that tech companies move their manufacturing out of China as soon as possible.
I pointed out that China’s more restrictive demands tied to their One China Policy will make it very difficult for the U.S., E.U., and some Asian companies to manufacture their products in China if they are exported outside China’s borders.
But there is a silver lining to this shift in tech manufacturing that is playing out now.
For most of the 20th century, the U.S. was the major manufacturing center worldwide. As a result, the U.S. made just about every type of product for U.S. consumption and international exports. However, around the mid-1960s, as manufacturing and labor costs began to rise, many U.S. companies began to look abroad to create new and less expensive ways to make their products.
If you look at the evolution of U.S. manufacturing moving offshore from the mid-1960s to 2000, it began in Japan, then expanded to include South Korea, Taiwan, and China. These Asian manufacturers offered lower prices, less expensive components, and much cheaper labor.
By 2000, most manufacturing had left the U.S. and shifted overseas.
One interesting thing to note about this period is that initial products made in Japan were considered inferior and almost a joke. People scoffed at products made there, and to be truthful, most were inferior.
However, by the mid-1970s, Japan got its act together and began making high-quality products, especially in the area of electronics, household appliances, etc.
U.S. manufacturing took a big hit in the last century and the early part of this century. However, geopolitical situations are poised to bring back a lot of manufacturing to the U.S. This is noteworthy, especially in semiconductors, batteries for electric vehicles, and many other products that can be made in the U.S. economically.
This resurgence does not mean all manufacturing will return to the U.S. Indeed, other Asian countries such as Viet Nam, Malaysia, the Philippines and India and Mexico have stepped in to replace Chinese manufacturing. Making products in China now is fraught with political hazards tied to the current hard-line communist leadership’s crackdown on all industries and the enforcement of the One China Policy in the near future.
The most important part of this shift is that the U.S. can no longer rely on China and possibly other countries whose leadership could become more restrictive in the future. They need to control their own technological destiny, especially when it concerns semiconductors, A.I., quantum computing, things like E.V. batteries, and any new critical inventions in the works that will be important to America’s future.
This need to control is at the heart of the recent U.S. government’s passing of the Semiconductor CHIPS Act that delivers $52 billion to help major semiconductor companies like Intel, TSMC, and others create semiconductor fabs in the U.S.
The importance of this CHIPS Act cannot be overstated. Semiconductors are at the heart of all digital products, and we are racing from an analog world to an all-digital one. Moreover, the current shortages in chips, tied to automobiles, computers, etc., caused by the pandemic and supply chain problems, underscores how vital semiconductors are to our world today and in the future.
Although manufacturing costs will be higher in the U.S., the U.S. and those making these chips must have complete control of their operations and products. This will ensure that the U.S. can not only meet its military, business, and consumer needs but also become a reliable supplier for other companies around the world who could benefit from any of these products made in the USA.
Thankfully the tide has shifted, and China is on track to lose its role as a prominent manufacturer worldwide. China‚Äôs restrictive policies will negatively impact China’s manufacturing market. We are already seeing many people who worked in manufacturing, engineering, and software design in China begin to shift careers to other areas where they can earn a living. They are coming to the stark reality that there is less of a future for them if they continue working in manufacturing and some technology related areas and start to shift work goals in other directions.
Although other countries are filling that void, the U.S. must take greater control of creating high-tech goods within its borders. The U.S. can never again lose control of this to other countries if they want true independence of our digital destiny.


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