I hope Intel keeps its US-based fabs and continues to upgrade them. It would be a mistake to cede this capacity to outsourcing like so much of our other manufacturing capacity. Interestingly, it seems the US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this.
Manufacturing companies use a lot of capital for their factories. Shut down the factory and outsource to China, and you have the same sales with a lot less capital, so the stock goes up. Great success.
Maybe repeat by having your suppliers do more and more of the engineering. At a certain point, you are just a brand, with no actual engineering capability.
You can't compete with the people who actually know how to make the things. Then you die. See Hewlett Packard.
The US taxing companies on global income at high rates also has an effect. Say you have 50% of your sales outside the US. You pay taxes in the country where you sell the product. Then you have profits overseas. If you bring that cash back to the US, you pay the difference between the corporate rate in country X and the US, which can be a lot, say 15%.
Might as well take that money and use it to pay for manufacturing at e.g. Foxconn. So it's 15% better to invest in manufacturing capacity outside the US.
The poor health care system in the US drives up costs as well, twice what it is in other industrialized countries for worse outcome. Same for cost of housing because zoning laws won't allow building. Google was allowed to build offices in Mountain View but not residential property for the employees to live in. So everyone has to commute from somewhere else, and cost of rent is driven by how much misery you can handle.
Failures in government policy make US workers much more expensive without creating any more value or improving the quality of life for the employees.
Innovation happens on the factory floor. Pretty soon the countries we outsourced to will come up with better designs too. The U.S. thesis for outsourcing is that the manufacturing countries are filled with braindead automatons who can't compete with our "Designed in California". That may have been true in the 20th century when the U.S. brain drained all the top talent, but now other nations are in a position to pay their engineers more than U.S. companies. The "Designed in California" cope can only last so long.
People that reach for this kind of decisions occasionally seem to still have a colonialism point of view, like "they will do as told and we still stay in control", except that isn't how things work and eventually they stand on their own feet and are able to even outperform their "masters".
Oh man, the amount of Dutch "we're going to build a knowledge economy" news articles I've seen in the last decade that barely hide their colonial mindset is staggering, and the implied assumption that "we" are smarter than "them" is so blatantly racist that I'd almost feel offended if I didn't know that they'll reap what they sow with that attitude soon enough.
And yes it stinks of "we'll live with the hard part of telling other people what to do".
You clearly haven't dealt with German managers at their companies operating in Eastern Europe ;)
Jokes aside, "behaving badly abroad while showing their best behavior at home" is basically yet another proud colonial tradition, isn't it?
I wish this didn't ring so true. It is so prevalent that for those who were raised locally and who went through said university schooling it is still painfully easy to distinguish from which student union in which city these guys originate based on how they treat each other, even when they graduated decades ago. Which ironically means that they are guilty of the kind of primitive tribalistic nonsense that they project onto other cultures.
... actually, now that I wrote that out, I guess that could partially explain a few things as well.
(and I'm well aware that this is not a problem unique to the Netherlands, but it still sucks)
I was working for a major Dutch electronics company and it was interesting to watch how whenever colleagues from their US/German brach would come visit the Dutch managers would treat them like equals and invite them to drinks and dinners but whenever colleagues from their Czech/China/Singapore branch would visit, the Dutch managers would politely pretend they don't exist.
As an Eastern European immigrant, I can think of worse things you can be called in the West than Maestro!. You have no idea how good you have it.
No Problem with that ;)
It's not necessary colonialist as such, merely takes the past history as implications of future patterns. The so called colonialist powers were ahead in the game from 1700's up to the middle of the 20th century.
Colonialism coincided with the rise of industrialization and science. The so called "colonized" nations did not have the chance to utilize these and rise up to their full human potential.
I think a good historical example is that of Japan. Japan was effectively a medieval state in 1850 when the Perry expedition forced it to the modern era . And 50 years later they beat a major world power in a technological military engagement in the Battle of Tsushima  against Russia! Gaining 500 years of advancements in technology in 50 years really amazing. But it really just reflects that we are all human, and all successes are due standing in the shoulder of past giants. And late comers to the game still have those same shoulder to stand on.
I suppose, then, half a century - or, two generations - is a good rule of thumb on how long it takes for a sovereign power to play catchup and to leapfrog to current "state of the art" just as long as it has a functioning state.
There are fascinating artifacts from the period following Japan's opening up to foreign trade, reminiscent of European science in the Renaissance era - with an Asian twist.
I'd like to point out though, that there was a steady "leak" of technology, or rather cultural exchange with the West, through the Dutch since the 17th century.
Japan–Netherlands relations - https://en.wikipedia.org/wiki/Japan%E2%80%93Netherlands_rela...
To return to the "leap-frogging to the modern era" - it seems that developing nations are all in the process of doing this. I recall reading how many African countries "skipped over" the building of traditional telephone infrastructure, and went staight to mobile.
That also supports your argument that it only takes a couple generations for a country to catch up to modern standard of technology.
But to surpass it, and become the leading edge, probably requires a bigger cultural change - to have an academic and business environment that fosters innovation. In that aspect, I think the U.S. has a lead in the world, and will continue to keep that competitive advantage for a while.
It suggests that cultural (and perhaps social and psychological) change is harder to achieve than the knowledge transfer of technology.
In a way, Japanese was ahead of Europe, using mass produced firearms in warfare earlier than Europe did.
However, after 17th century gun industry declined in Japan, and Japanese gun manufacturing was way behind europe in the beginning of 19th century .
But they really picked up the pace after that! Japanese Arisaka bolt-action rifles were the cheap-and-plentiful firearm used in many countries up to ww2. I have one Type-38 from 1905 or so and it sure is still very nice.
Japan-Portugal History - https://en.wikipedia.org/wiki/Japan%E2%80%93Portugal_relatio...
Right, I'm connecting the dots, picturing the historical context..
That reminds me how Japanese children are taught in basic school about 黒船, "black ships", as representing first contact with the West.
Black Ships - https://en.wikipedia.org/wiki/Black_Ships
This was part of the Age of Discovery, as the Portuguese (chronologically) led the discovery of Africa, Asia, the Americas..
The two countries I know the most about are my own (Australia), and the US. And I definitely see a lot of differences in corporate culture (willingness to take risk, thirst for innovation, etc) between the two countries, differences which generally come out in the US's favour.
I remember Elon Musk saying that "the United States is the greatest country that's ever existed on earth". The US has lots of quite serious problems and in saying that Musk is choosing to ignore all those problems. (And at least some of the problems the US has are caused by distinctive aspects of US culture). But, look at SpaceX – probably in no other country on earth could SpaceX exist.
Certainly I don't think anything like SpaceX could exist in Australia. Of course, the US has the advantage of 13 times more people. But, if you could imagine a country with the same population as the US but the same culture as Australia, I don't think anything like SpaceX could exist in that hypothetical country either.
If Musk's dreams come true, SpaceX could turn out to be the most important company in human history thus far. (Of course, maybe his dreams won't come true – but I hope they do – I would love to live to see the day that humanity becomes a multi-planetary species.)
They are basically the same and it is a result of different attitudes of capital providers. In Australia, you have more conservative financial institutions and no venture capitalists -> so companies must take less risk.
Related to risk is also innovation. If you can take more risks, you are more willing to purchase product and services, that are not quite ready, but can help you move you further even as they are. If you cannot take risks, you will purchase only products and services, that have already proven their usefulness at other companies. Thus crippling the ability to innovate around you.
Australia consistently has R&D spending below the OECD average (as percent of GDP). The Australian government could easily fix this, either by increasing public sector R&D funding, or increasing tax concessions for private R&D funding, or both. But they don’t, because it isn’t a political priority.
(And doesn’t culture have a great role to play in determining what is seen as a political priority, and what isn’t?)
Australia's failures in space aren't the fault of other countries, they are the fault of Australia. Australia's National Space Program (1986-1996) failed primarily due to chronic underfunding. That's not the fault of the US. And then Australia went over 20 years without any dedicated space agency – not the fault of the US either. And now Australia finally has one, it has a puny budget of approximately AU$10 million (around US$7 million) a year. If Australia was to spend as much on the Australian Space Agency (as a percentage of GDP) as the US spends on NASA, its budget would be over $1 billion a year. But it's not. Is that the fault of the US? If Australia decided to spend $1 billion a year on its space agency, I think NASA (and the US government more broadly) would be quite pleased. Australia could make some substantial contributions to one or more NASA programs.
In the 1970s, Australia was an associate member of ELDO, one of the predecessor agencies of the European Space Agency. The ESA was happy to offer Australia a similar membership status in ESA, but Australia declined. Canada went ahead and remains a formal “cooperating state” of ESA to this day. The offer is still open - the ESA has said so publicly  - but Australia isn't interested in taking up the same status as Canada, primarily because it would require Australia to contribute financially to ESA projects (i.e. spend money on space, something Australia doesn't want to do). (I've heard the claim that the US pressured Australia not to become an associate ESA member, but I've never heard any actual evidence to support that claim; and did they pressure Canada not to have their current “cooperating” status?)
I'm actually surprised you're asking this, because this phenomenon is fairly well known, but anyway. TSR2, Black Arrow and Concorde (with France of course) are a few examples from the UK, and the Avro Arrow is an example from Canada. It does require capitulation from weak or compromised leaders in the producing nation. Take France as a counter example of a country that refused to capitulate to US demands e.g. military aircraft, rockets.
Concorde was always pushing the envelope in terms of technology and economics. I think a big part of why it ultimately failed, was that improvements in the luxuriousness of business class and first class made it more attractive for many people to spend less money on getting there slower in luxury than spending more to get there quicker but in Concorde's far less luxurious conditions. Add to that the small addressable market (due to the high price point and limited number of aircraft), the post-9/11 aviation downturn, the Air France Flight 4590 accident, the very high maintenance costs, the fact that it was only ever used by two airlines (whose Concorde operations were only profitable because the British and French governments had written off the lion's share of development costs), and Concorde's ageing technology. (The British and French governments were not willing to pay for Concorde 2.0, and the airlines could never afford to pay for the 1.0 version themselves anyway.)
In the case of TSR-2, the UK government cancelled it because they believed the US F-111 was cheaper. They chose to prioritise cost over the interests of their domestic aircraft industry. That may have been a foolishly shortsighted decision, but ultimately fault for it lies with the UK not the US.
> It does require capitulation from weak or compromised leaders in the producing nation. Take France as a counter example of a country that refused to capitulate
My original point was about how differences in culture can potentially lead to differences in economic outcomes. I think differences in culture could also play a role in whether a country's leaders are "weak".
This! And more generally, innovation is more likely to come from people who are having to deal with messy reality. (See, e.g., the protocols for treating COVID-19 that have been figured out in emergency departments and ICUs all over the world.)
You can be anti-illegal-immigration (which is effectively being anti open borders) without being a xenophobe that is wholly “anti-immigration”.
They worked Cotton on this bill which would reduce legal immigration.
Here's a quick selection of related articles. Apologies that some of these may be paywalled. Also this was just from random googling, so I haven't fully vetted these links for accuracy/bias.
(edited for formatting)
Even if you think US border policy should be less strict/militarized, that isn't relevant to this discussion, as the number of undocumented migrants working in state-of-the-art chip design is approximately zero, and that's not because of their legal status, it is because skilled labor (which is obviously what is required for chip design/fab) is very capable of getting a visa to live in the US under the current (and previous) administrations.
In fact, the current administration has said repeatedly and explicitly that they do not want to curb legal immigration, only undocumented/illegal migration.
A cursory reading of the headline might suggest this was to prevent spreading of the virus, but the president explicitly said that it was to protect american workers from immigrants competing for jobs
There was also the case a few weeks ago where the government told students on visas that they need to leave the country if their school switches to all online courses in light of the virus which is not only anti immigrant but explicitly reversing the brain drain as was mentioned earlier in the thread. They did reverse that decision but only after major colleges started a joining in a major lawsuit.
There was also the whole "Muslim ban" limiting legal migration.
Oh and ICE deported an Iranian student despite being given a court order not to, so they're also explicitly breaking the law in order to deport people
In both words and actions this administration has been against legal immigration even if it's at less of a degree than illegal immigration.
Referencing actions taken in these unprecedented circumstances
as if they are the norm is incredibly disingenuous.
They continually snipe at legal immigration and make it harder for people to legally immigrate when they get the chance. A claim was made that they were pro legal immigration. Here's the counter proof
I don't particularly miss the day of colonialism, however I just don't see innovation happening on the floor at a chip fab.
People engineer the cleanroom, the litho, the straining, the insulator layer, all sorts of things individually. Every part of a fab can be reengineered towards making a better, more consistent processor with better yields.
So Wall Street was serving here as a template too?
But jest aside, if success isn't measured by long time goals we should have expected these results.
Part of me thinks that if engineering was offering better careers, we would have flying cars now. But I also see it as a market and if engineers aren’t paid that much, it is probably because there isn’t a supply shortage. For software developers, there is a supply shortage (as every company is becoming a software company) and it translates into higher wages.
> I was thinking something along those lines, we've had an entire generation of smart people go into finance and create financial innovation that led to 2008 (amongst other, potentially positive, things).
Both seem a little low; I'd expect a mid-level in London to be >£75k (~$100k). Less sure on the US salary; maybe >$155k?
Neither include equity, but I imagine they scale pretty similarly.
So a London dev at Google is looking at a loss of $70k per year compared to their SV colleague.
London isn't cheap. It may not be NYC or Bay Area levels, but you can't really escape it by commuting in. You're going to be competing with everybody else trying to do that and knocking £5-6k off your post-tax income, so I don't think it really comes out as "cheaper" to try that. I was estimating needing ~£1000 per month as basic living costs (rent + public transport, but not food) in shared accommodation when I was looking to move there (in the end I didn't, but not because of anything I've said here).
Edit: Fix bad maths in comparison
Traditional engineer roles pay far less, think £40k in London.
Still may take a while and one may well live a fulfilling career in meantime, just saying it's far from a sure bet. Capital is not terribly sentimental.
That hasn't lead to the UK being a leader in railway construction or shipbuilding - despite the vested interests.
I would say that UK junior and mid engineer roles are in general worse-paid than in the USA, but senior roles are competitive. Getting a big salary straight out of uni is not something I've seen over here but you hear about it in California.
If you're in London you have the benefit of a pretty thriving tech scene. If you want to look further afield then Bristol, Manchester, and Edinburgh seem to have a lot going on as well, and lower living costs.
Which, to me, would be a very good thing, so I wish them the best of luck. Many large companies that exist because of an earlier lead (established decades ago) and high barriers to entry would benefit from hard competition. My 2c.
No. Please write 1 country.
I live in Romania and I have a close friend who works locally for a big US software company that everyone on this website has heard of and he's about to purchase an apartment in one of the poshest areas of Bucharest (think one block away from Central Park, NYC), the money for doing that having been earned from that US company. No way he'd be able to do that in SV or in NYC itself were he to be employed directly in the States (unless he was a star engineer or something).
He won't probably be able to buy himself a Porsche or any other 100,000+ euros car for that matter, but those are mostly one-off gimmicks that pale when you compare them with the cost of living + healthcare (even in Romania, if you have decent money you can now get pretty decent healthcare).
I know people who live on a couple hundred bucks a month in Shanghai and I've had satisfying meals for $2 there. I think if companies were paying anywhere near half of what Apple, etc paid in California, people driven solely by money (emphasis here) would get by better in Shanghai.
Right now, America's draw is living in America. People will take cuts to their actual earnings to live somewhere desirable. Whether America can hold onto that appeal in the coming decades is the big question. Money might not be enough to draw people in.
This understates how rich the US is. By household final consumption the only place richer is Hong Kong and the US has substantially smaller households. It’s an almost $10K drop to third place Switzerland.
What draws people to the US isn’t a small difference in money, it’s a lot of money. $100,000 a year would be great money for an individual contributor here, $200,000 for a new grad is where Google starts in the SFBA. There is a cost of living difference but it just doesn’t come anywhere close to wiping out the huge difference in compensation.
The US is said to have very high salaries in PPP terms. But at the same time, I read about extreme costs every so often. "3.2 km of tunnel […cost…] $4.45 billion. A 1.5-mile (2.4 km), $6 billion second phase […] is in planning". And about things that don't seem to coexist well with affluence, like large parts of the population being unable to go without a single month's income, or car loans at more than 100% of the purchase price and with repayment plans longer than the car's average lifetime.
Something won't fit tigether here, mentally.
People who can’t save and borrow on bad terms exist everywhere. The US is different from Germany, but those people exist there too. The US is not different enough for a special explanation to be needed.
Depending on which "US" you mean. If you mean regular US senior developer salaries (around $150k) then they're achievable, on a contract basis, in pretty much all major centers in Europe (London, Paris, Munich, Zurich, Amsterdam etc.). If you mean the $500k FAANG salaries, then I've yet to see an equivalent in Europe.
If you're getting a "millionaire" salary in India or China does it matter that's not equal to a US salary in dollars?
For the individual company the difference will be small, for the US as a whole it's a big difference.
Source: I'm a Googler in Zürich. Current total comp is at $320K after 3 years at L5.
I completely agree that overall salaries are lower in Germany even adjusted for cost of living but the insane price levels in SV compared to most parts of Germany skew that even more.
The situation is more severe in the UK where central London has similar cost of living as NYC or SV but salaries at a quarter of SV levels outside of finance.
German salaries are really attractive for Europe.
UK is also much better and the timezone is ~same. I've mostly worked with US, UK, CA, IR (subsidiary of US).
An easier way is to focus your skills and specialize in, say, scalability/search-engine/low-level/ml. There will be less jobs, (compared to js), but you will have more leverage.
Don't they teach this in business school? It just seems incredibly obvious to anyone with an engineering background.
*Note that business school teaches other options, strategies, tools, etc. as well, it's not like everyone is trained from day one to pump and dump.
Source: went to business school.
Edit: I probably didn't phrase that well - how would this happen, is it a nudge and a wink thing to the board, or the board is clueless and the CEO / execs just decide etc?
Public shareholders have absolutely no loyalty to any company they extract wealth from, and they can move their capital elsewhere in seconds. And CxO/execs are typically awarded bonuses on share price movements.
So any action that moves the needle on the share price is a good thing. If this has bad long-term consequences, CxO/execs can always try to bail if they see incoming. They don't always succeed, but they have a fair chance. Employees are more likely to be left without lifeboats in the sinking ship.
What happens if we move all the profits and manufacturing capacity to markets Western investors are locked out of?
John Sterman used to say something very similar going back to at least the 2000 and the trend has only accelerated since then.
At the time I remember him giving lectures on System Dynamics models to demonstrate the effects.
Having recently seen this first hand, i.e. great developers being shuffled around and questionable business decisions carried out without a strong engineering buy in, it sucks.
why is this the responsibility of the engineer (presumably, with no real equity in the company)?
You can see this in Silicon Valley as well with the number of startups that are absolutely worthless but have exorbitant valuations because because they came up with a metric that everyone fell for.
Ironically enough, the test equipment division (what I would call the actual successors of the company) have been through 2 restructurings (HP->Agilent->Keysight). Almost as though having cutting-edge engineering & R&D will have the side-effect of making good products. Shame that costs money though.
I personally don't know anyone in the hobbyist electronics space that owns any Keysight gear, my only exposure has been in university labs. Bit of a shame, really.
certainly not the employees!
That's what happened.
In the 1980s or so gadfly (relative to IEEE) Irwin Feerst was sounding a fairly lone warning for US engineers: Outsource packaging, then you will outsource fab. Outsource fab, then you will outsource process engineering. Outsource those, then you will outsource design. ...
It's actually the perfect small/medium business endeavor in developing countries because of the labor cost arbitrage and economic opportunity. But a typical college educated American entrepreneur will not find it appealing, compared to starting a tech business or running a services business.
A Taiwanese silicon engineer salary, even the top band is probably only higher than the entry level of a web developer in SF.
Something is definitely wrong
I suspect that the falling rate of interest is the primary cause.
The falling interest rate on house loans makes houses increasingly expensive, as potential home owners can afford more expensive houses (given the same income) the less they have to pay in interest. The same principle ought to apply to companies who buy factories for manufacturing, with the primary difference being that housing cannot be outsourced while manufacturing can.
This hypothesis could be substantiated by looking at the degree to which countries with a long term falling interest rate outsource to countries with a long term stable or rising interest rate, and vice versa.
Foxconn's million+ workers do theoretically have a union, but only since 2007, and with actually elected leaders only since 2013. At that time they still faced the issue that most workers didn't know they were meant to elect a union representative at all and the union committee leaders were all managers. What little workers rights exist come mostly due to pressure from Apple and American unions.
And of course, as China is getting richer and the workers are starting to slowly come to resemble western workforces, companies are relocating to Vietnam.
Web developer in US can work freely in HoL area if they want to relocate.
Do companies have any excuse now regarding using taxation as an excuse to move manufacturing outside the US ?
Since, thanks to Trump, US tax rate is now almost equal to European, then you pay almost no additional tax for bringing your profits back to US.
The only remaining issue is additional accounting required, meaning you have to hire accountants both in EU and in States.
Also, if, as a majority shareholder you appoint yourself as the CEO and pay yourself a salary, it is tax deductible for your company, so money that goes to your salary is taxed only once.
When I hear "double taxation" in the US I usually think first of self-employed people sometimes having to pay both income and payroll tax compared to an otherwise employed person only paying income tax.
Then maybe I think about places like Missouri where after you take your post-tax income and buy a car with sales tax on the purchase, you pay yearly for that car as a personal property tax (which does not include your license plate, or inspection, or the city sticker some local places require).
Under its current system the United States taxes the worldwide income of its citizens, including corporations. Foreign income is taxed by the source country and then taxed again by the U.S. upon repatriation
Because there are credits against the double taxation, if US tax rates = the tax rate in that jurisdiction then it cancels out. But many places have different rates and then the double taxation kicks in again - they get taxed on their income once abroad, and again if they bring the money back to the USA, so they don't do it. Changing the rates is a band-aid: most countries don't do this kind of double taxation to begin with.
They would if they could, but they don't have ICBMs or aircraft carrier fleet to support their claims.
Not if you are Apple
The jobs never will though, nor do we actually want them to. This is why we need UBI.
Seriously, why would we want, in the future, to pay people to smack metal with a hammer? Let's get the jobs elsewhere ASAP, unless you can tell me with a straight face the future will involve more humans in the manufacture of goods -- in which case we should be getting a head start. Nobody will say that though because it's crazy.
Trying to add humans back to the manufacturing process, who don't need to be there, amounts to a regressive make-work project we're engaging in, intentionally adding inefficiency, instead of actually changing society and positioning ourselves for the inescapable future of humanity. In my opinion, America is squandering a huge lead by glamorizing crap jobs nobody actually needs to do, let alone wants. Like coal mining.
What's next, a return to whale oil?
Automation takes time to develop and can leave you inflexible depending on the task even with the wide variety of programmable robotics. Some products may not have profit margins, expected sales or complexity high enough where automation is worth investing in. You don't want to be in a situation where you need 300,000 of something in 3 weeks and the only way to get them is from a country that isn't an ally or refuses to trade with you.
Humans can easily do some things immediately and machines can easily do other things immediately. The more universally applicable a machine is, the more expensive it may be and possibly even priced against the highest value tasks it can do.
Universal Basic Income has many problems that aren't solved and there are many potential negative side effects, so it's premature to promote it confidently.
And capital! The human beings who spend their time developing new technology need to be fed, which requires consuming someone’s savings.
Whether automation makes sense always depends on its benefit versus the cost of development. E.g. if we spend money on feeding 100 engineers for 10 years while they develop a technology that increases the efficiency of producing something by X% is it worth it?
We always need to make this calculation because the amount of savings is finite, so we have an interest in spending it in a way that creates the most gain.
It's even worse: The more universally applicable a machine is, the more expensive its outputs are, because it is less efficient. Have you seen an aluminum can lid stamping machine?  It can only produce one thing, but that thing is incredibly cheap on account of the machine producing tens of thousands of items per hour.
 That's probably not its official name...
EDIT- I'd add that this isn't just about China or moving manufacturing to the cheapest location. Let's say I need a specialty injection molded part with tough requirements for med device. The best shop might be in the US, or maybe Germany, or maybe Mexicali. Automation isn't going to change that.
Yes automation solves it.
That might be true for HN (folks who prefer working at a desk) but that is NOT true for a vast majority of people.
I have both friends and family who love to work on the factory floor/shop - it is more varied and interesting for them. More interaction, more visible output of labour and they don't need to join a Gym as they get enough physical movement in their daily job. They despise the idea of sitting at a desk the whole day.
I think it's more so people who never worked a physical job and imagine those to be just the worst.
Even Walmart is looking at replacing all their cashiers with robots.  Do you think assembly workers are immune for some reason? We need to skate to where the puck is going to be, not where its was 30 years ago.
I find the idea of my comment coming from a "pampered, privileged tech worker" perspective interesting, as I'm offering a part of my pay so that the folks doing the mundane, back-breaking work inefficiently, today, could be paid to stay home and look after their families or pursue self-actualization.
It's already been done, except replace the "robot" meme with "industrial engineering" reality. instead of iRobot it's the machine that welds cars or makes pringles. It was done 30+ years ago. This world is distinct from the robot replacement headline clickbait we've been reading our whole lives.
>Even Walmart is looking at replacing all their cashiers with robots.
The technology for this has existed for 20+ years but it's always being "explored", that should tell you something. That's a distraction though. We're talking about chip fab, then you started talking about assembly line workers (which has zero meaning - can you think of a single assembly function that hasn't been automated 20 years ago?). Factory work today is skilled work, industrial engineering hasn't stood still.
>I'm offering a part of my pay so that the folks doing the mundane, back-breaking work inefficiently, today, could be paid to stay home and look after their families or pursue self-actualization.
you're getting ripped off. Modern factory jobs are pretty good. Self Actualization is a meme.
Manual jobs will be getting automated, and countries relying on manufacturing will be hit by that process the hardest.
Like in Factorio - first you're resources bound, than you are labor bound, and finally you're design-bound.
Modern economy is design-bound. USA being de-industrialized developed economy offers good quality of life and opportunity for intellectual workers, and attracts a lot of talent. Most HN readers is Americans, so they love to complain about USA, but "grass is always greener on the other side". As much as there are messed up things in USA, there's also plenty of things that are working really well.
The main problem is the gap between people who benefit from the post-industrial economy, and those who do not. I also don't see a better way out of it than just some well-designed form of UBI. And considering all the COVID stimulus, the USG is already paving the way...
We've started to see this return already, with Foxconn and TSMC setting up factories in the US (with no people in them of course -- because why would they put people in them?).
The US manufacturing share of real GDP has been pretty much unchanged since the 40s - ie it’s growth has kept up with the rest of the economy.
The graph in this article, from BEA data, shows that when you don't apply inflation tricks, manufacturing has dropped from 28% in the 50s to 12% today. And they're still factoring in adjustments due to the "increase in quality of computers", ie, one computer today is worth some large number of 1980s computers.
Also - when did accounting for inflation become a ‘trick’? No way you can look at nominal gdp on these time frames.
> Real gross domestic product is GDP adjusted for inflation, which allows us to better measure and compare growth over time. If you're measuring and comparing different industries' shares of GDP over time, it's not immediately obvious why you would need to do such an inflation adjustment. The very act of dividing manufacturing's contribution to GDP in 1960 by overall GDP in 1960 does the inflation adjustment for you, given that both amounts are in 1960 dollars.
> The BEA's remedy to the problem is to put up warnings against doing share-of-real-GDP calculations all over its website.
It's worth reading the whole thing.
The manufacturing/services divide itself is a bit silly without careful attention, and I think is incredibly overplayed because "manufacturing" aligns with a bunch of other political/economic geography stuff.
This is true everywhere, not just in computing where it's most obvious. Even agriculture in a lot of ways.
By the time you apply all that careful attention, any sort of meaningful macro work becomes impossible. You're just doing a whole ton of little sector-by-sector analyses.
And it gets worse if you start looking at the labor economics instead of just measuring output.
It used to be that manufacturing-related services and the physical work of manufacturing were relatively coupled. The people working in the manufacturing plants more-or-less knew how all the equipment worked. That's not really at all the case anymore.
I believe that was the point of the "share-of-real-GDP" adjustments. Because "prices of manufactured goods have gone up more slowly than those of other goods and services (think health care), Baily and Bosworth reasoned that manufacturing's shrinking share of nominal GDP understates its continuing impact on the economy."
Apparently there is a decent way, at least in principle, to compare mainframes to iPhones; that is, to compare their contributions to improved productivity independent of nominal prices. But it breaks down over longer time scales unless you can plugin real numbers for changes in relative value-add across entire industries, which in this case isn't possible because the trick was used to adjust industries in the aggregate by assuming a constant ratio of value-add.
Jobs, the economy... there is more to life, and more to maintaining a hegemony.
NB: there's also a strategic geopolitical advantage to out-sourcing manufacturing. The US would be a weaker nation if we had to commit a bunch of human capital to textiles.
But to answer your actual question:
> Jobs, the economy... there is more to life, and more to maintaining a hegemony.
You could say the same about freedom. Most people would prefer a good-paying job over global hegemony, and care about the latter only in service to the former.
note: I agree there's a strategic national security/economic/sov. interest in domestic chip manufacturing, hegemony or not. But the general analysis that we should make ourselves poorer in order to be world hegemon is, to most Americans, I suspect a bit backward.
It's not hegemony for the sake of hegemony, but hegemony for the benefits of hegemony, which in our recent history have included technological and economic supremacy, both tightly correlated to one another.
I think globalism can be a good thing, and I hardly oppose the notion of outsourcing some economic activities. However, the original point was regarding ceding our production capabilities for a short term and potentially insignificant improvement in the performance of a single company.
> The US would be a weaker nation if we had to commit a bunch of human capital to textiles.
There is something to be said for balance, taste, and sensibility. Like, it would be cool if we were able to manufacture essential medical PPE during a pandemic. Them be textiles, my friend.
If we are unprepared for a crisis that can gut our economy because we were prioritizing the economy over preparedness... I'm sorry, but that is stupid and short sighted.
Jobs are important. The economy is important. But it's as if all nuance is lost on the GDP-measuring mouth breathers. You want a strong economy? Maintain the hegemony. Be a global leader in many diverse categories.
The post you're relying to literally says the same thing...
> medical PPE be textiles, my friend.
1. No. "Textiles" is a term of art, and it doesn't include N95 masks or 3 ply surgical masks. Full stop. Might include some basic cloth masks that are equivalent to a ripped-off tshirt sleeve with some elastic bands. But we never had anything approaching a shortage of t-shirts to rip up for cloth face coverings... what we're missing is the stuff with melt-blown layers and/or filters.
2. We do make N95 masks and could have surged production... shortages of the most needed types of masks in the US were due to an utter failure of political leadership, not a lack of manufacturing capacity. E.g., https://www.washingtonpost.com/investigations/in-the-early-d...
3. The same is true for 3-ply surgical masks. Repurposing a huge number of t-shirt factories would've taken ages and $$$. The difficult part is the melt-blown layer, which is more like N95 or surgical gowns than t-shirts. Not even clear having an existing t-shirt factory would even speed things up much, since, obviously, the barrier isn't "stitching a couple pieces of cloth together". But even if it did, what are the odds on that happening if we couldn't even give a green light on flipping the switch on existing N95 lines in May? Again, leadership problem, not manufacturing capacity problem.
4. All of that aside, this is the sort of thing you solve with strategic stockpiles and planning, not "make everything ourselves and hope to god some of the other lines can be repurposed ASAP" and especially not "constantly maintain manufacturing capacity and raw resource supply chains for every conceivable long-tail event". No. You figure out for each long tail event how long it takes to ramp up production, and then you stockpile for that amount of time.
The rest of the post is sort of _exactly_ demonstrative of the point I was making in my original post about macro analyses being limited and needing to go sector by sector. So I'm really not quite sure what we're arguing about here.
While I probably agree with the broader idea, I can't help but think that at root, sentiments such as these are the root cause of our industrialization and significant but hand-waved human costs here that have been incurred.
Scenario A: You assemble everything locally with 50% of your components from east asian component manufacturers, the rest from the domestic market. Your costs are $800 per unit. Then you spend $200 on in-house design and sell your product for $1500, for a profit of $500 per unit and a domestic value add of $700 per unit. At that price point, you sell 2/3 of a million units, adding roughly half a billion to domestic manufacturing.
Scenario B: You outsource all of your assembly to China and parts from East Asian component manufacturers and only do design/QA in-house. If you pay $300 to your suppliers, spend $200 on in-house design but sell your product for $1000, you have $700 in domestic value add. Say at $1000 you sell a million units, so you've contributed a billion dollars to the manufacturing share of GDP.
Now if a company switches from Scenario A to Scenario B, most people would (rightly, I believe) assume that some manufacturing has left the economy. But actually the manufacturing share of GDP has increased! However it's a very fragile increase, because a change in the terms of trade and suddenly you pay more for your foreign inputs and at that point it will appear as if manufacturing's share of GDP has fallen. There is also the issue that foreign rivals are going to be in a better position to compete against you, so long term this does not bode well for manufacturing's share of GDP.
Now this is just one company, and buying from domestic suppliers also contributes to GDP. But they have the same issue -- they can outsource production leaving design/QA in house as well. So you can have a situation with high manufacturing share of GDP with nothing produced in the nation other than design/QA. So all these GDP by industry measures, at the end of the day, are measuring industry margins more than actual manufacturing per se, and really weren't designed with outsourcing in mind, and aren't intended to be used in a time series analysis during which a lot of outsourcing is happening.
In most situations you end up using price as an aggregator, even if the price is itself normalized by a scaling factor. That means if you shut down a factory today and have your goods produced cheaply overseas except for a few small finishing steps here, it will be the relative prices of the inputs that determine how much of the good was produced here versus how much was produced overseas, and this wont generally reflect the "real" amount produced here versus overseas as viewed by a layman. In fact, if a producer couldn't outsource cheaply, they probably wouldn't do it, so there will be a consistent gap in terms of what the laymen sees and what the BEA data will show. And note this also creates the appearance of a productivity boost. Imagine Apple firing all their manufacturing employees and employing only a few designers. Now, they can produce a lot of value with only a few cost inputs, hence productivity just went up. Of course, the designers may not be more productive in terms of creating more designs or better designs, but as Apple is able to capture a large share of the total value, then it will be attributed to the super productivity of the designers, which may have more to do with politics in East Asia choosing an export led growth model than anything to do with the iPhone.
And it gets more complicated because the NIPA system doesn't take into account the possibility of economic rents. E.g. going back to the Apple example, if Apple can charge $1000 for the phone, with only $300 of inputs, then this $700 worth of "value added" must be attributable to some portion of labor and capital. If the designers are paid $200 then capital is paid $500. In NIPA parlance, that means $500 worth of capital investment (and or depreciation) must have occurred somewhere in the economy, which again to the layman would require unrealistic measurements of investment. There is no NIPA notion of someone overpaying. And then don't get me started on how corporate shell companies headquartered in tax shelters like the Bahamas or Ireland screw with GDP numbers, especially of the smaller nations that serve as tax shelters, but also with US productivity and investment data.
> a lot of the manufacturing output growth since the mid-1980s, when the BEA started factoring quality improvements in computers into its measures of real output, has been driven by the rising quality of computers and electronic products, not by increases in actual, you know, output.
i.e. one Intel chip produced today is considered to be thousands of times more output than one Intel chip produced in the 80s, because it's thousands of times faster.
This point is a bit of a rorschach... is that an over-estimation or an under-estimation? Sounds like a massive under-estimation to me, in the same sort of qualitative way that it's silly to try to quantify the economic effect of the internal combustion engine in terms of horses displaced... it's measuring something kinda relevant but totally missing a qualitative shift that unlocked impossible-to-quantify economic activity (for better or worse is up to us).
Yes, exactly. My point is that I wouldn't call measuring actual value instead of a pretty meaningless "output" metric a "mistake".
The original point of the pre-existing "output" metric was to approximate actual value creation, after all...
If we treat each computer made in the US today as equivalent to a thousand 1980s computers, then I'd hope to see the weighted data show that US manufacturing has massively increased as a result of making an exponentially larger number of exponentially faster computers. Rather than seeing it stagnate despite weighting each computer as worth so many old computers.
Why would you hope for that?
After that story, they’ve lost a good deal of credibility.
A favorite story on HN, this listening device was not detected for seven years, despite experts extensively looking for it 
 - https://en.wikipedia.org/wiki/The_Thing_(listening_device)
As a side note, we tend to judge an article if it goes against our belief, but are willing to give it a pass otherwise. Case in point, plenty of Bloomberg's articles about Boeing or climate change being discussed but don't think I've seen anyone questioning their premise or evidence. I'm guilty of this as well.
They haven't; they still stand by it. Since they consider the rest of their output just as trustworthy as that article, I'll take them at their word.
In the end they turned out to be right but it took more than 5 years since the first article. I believe we should consider that Bloomberg could fall into a similar category.
Chip manufacturing is a special case as well. China is using massive state spending to build a competitive infrastructure in its country. Intel is the only competetive industrial chip fabrication presence in the US and should receive a similar focus from our leadership if we don't want to fully hollow-out the US' production capacity.
Samsung and Globalfoundires have fabs in the US that are close to leading edge. There are other fabs that are leading edge for other types of chips e.g. Texas Instruments
The fact is that the capital expenditure costs to create a leading edge Fab are insane, and economies of scale form a big moat. The economics do not really support more than a few leading edge fabs, and now that Intel has had internal issues they are behind. Maybe they will catch up- however throwing money at the problem does not seem likely to me to fix the problem. Moore's law is ending and the difference between die shrinks isn't as dramatic as it used to be. It remains to be seen if electron tunnelling can be easily be dealt with... However fabs are sexy and people will chase the money until the process breaks down.
That would actually be an anti consumer move.
Directly throwing money at a company isn't the only way for the state to support an industry. I'm not a policy wonk, but there are other ways to do it, and I think the US would be making a mistake if they let this chip fabrication capacity disappear.
This is silly. No one thinks that. You're just not telling the difference between "necessary" and "sufficient".
Japan and South Korea are not really; their economies are largely organised by conglomerates with strong political ties (and often significant nationalistic tendencies). There is capitalism in Germany but it's kept on a much tighter leash than the US in terms of labour laws.
This is historical fact, not a theory.
Every single human that spends a single dollar is directly and demonstrably connected to systems that are rapidly (in historical proportions) destroying almost everything that humans of past eras considered wealth and value.
Downvote this, but let it sink in.
There are humans on this planet that are not fueling these consumptive mechanisms. I hope.
How can we detach ourselves from these systems as we build out alternative systems?
Fundamentally this is an energy issue, with enough free energy everyone can have a high standard of living ie. BI becomes possible, we can automate away most mundane jobs with cheap robots (BOM goes down with cheap energy).
With a good standard of living, births drop- viz population charts globally except Africa, thus we get into a virtuous cycle.
The only issue is the environmental impact of lots of energy in the ecosystem, I'm not sure how that would pan out.
We are wasting massive amounts of energy.
20 lanes of stop-and-go SUV's all single driver traveling over an hour to jobs that they hate. Terrajules of energy to create a single piece of electronics designed to break in less than 2 years. Massive manufacturing of throw away disposable items. The list goes on.
This is Hacker news. Que's Computer Users Dictionary 5th edition defines hack:
"An inordinately clever rearrangement of existing system resources that results, as if by magic, in a stunning improvement in system performance - or an equally stunning prank."
We need to wisely use what we already have.
I think it was fear of lost of the memory business to Japanese companies. It worked out for the US in that Intel switch to and dominated the CPU business and you had the rise of fabless.
The article is very interesting in describing the origin of EUV and the company making it and the source of the research.
Lockheed Martin. Boeing. Raytheon. General Dynamics. Northrop Grumman. Huntington Ingalls. United Technologies.
With that said, I wish stats like that were a little more clear about whether they mean that broader definition of the manufacturing industry, or if it is strictly the economic output of actual factories.
This has quite thoroughly been criticised in the past, repeatedly, for the way the data is adjusted.
That's why it's so politicized. Manufacturing is about 12% of GDP. That 12% used to go to a lot of people. Now it goes to the few people who own all the factories and the robots inside them.
It's both yes or no for USA:
1. Fever businesses at all in the sector
2. USA has an extremely strong slant towards expensive capital goods, in very entrenchable industries: aerospace, defence, weapons, medical, industrial vehicles, and machinery
3. All of the above is increasingly made with imported, off the shelf parts
4. USA has "industrial" companies who manage to report giant manufacturing outputs in accounting statements, but known to not have a single running manufacturing plant.
Job losses in manufacturing have sent millions of people from middle class to poverty in the span of a single generation.
Manufacturing is also directly tied to national security, regardless of how many choose to ignore this.
imo it hasn't been politicized enough.
It is mostly due to outsourcing the labor-intensive parts to cheaper labor markets.
The hypothetical robots are people working elsewhere.
This is very common misconception. The US has not deindustrialized other sectors have grown faster. US is the second largest country by industrial output. Third largest if you count EU as comparable unit.
Industrial era is over in all advanced economies. We live in post-industrial societies.
As I said elsewhere in the thread, chip manufacturing is a special category as well, and Intel has the only US-based fabrication that is competitive with the state of the art.
It should be as important to protect that capacity as other industrial sectors, like Boeing.
Germany and Japan have stagnant economies. South Korea and the US grow at similar rates but the US has a massive base to grow on.
America's economy grows at 2.9% every year. The largest in the world and it's still growing at this rate.
I take this trade every single time. It's why Americans are so wealthy in general.
Outsourcing your safety net to the government is the classic move of a well-functioning society.
> Outsourcing your safety net to the government is the classic move of a well-functioning society.
Are you watching the same news as the rest of us? where is this well-functioning society you speak of?
Yeah, it's their fault for not expecting and being prepared for the government banning the majority of commerce.
I think we should arrive for a society where it's citizens can earn enough on their own to at least have a small safety net.
We talk about a race to the bottom irt. companies but it might be wise to apply the same thinking to society at large as well.
Companies have been criticized(rightly imho) over their lack of reserves to handle the corona virus and shutdown. The defense of the companies is that by keeping cash on hand instead of spending it, they are at a competitive disadvantage.
This holds true for individuals as well, abet in a more abstract manner. If you are young and trying to attract a mate, wearing old/unfashionable clothes is detrimental. In some circles, what car you drive and it's age is important.
This thinking also extends to non-tangible things as well. What TV shows do you watch? Subscription to cable or even streaming is expensive but it is something we often feel we have to have, not only for our entertainment but also to be connected culturally with our peer group.
These pressures and factors are not new, the phrase "Keeping up with the Joneses" came from a comic in 1913. It has been argued that social media is making these pressures even greater, as people share(and reward the sharing of) the positive aspects of lives but leave out the negative aspects. This creates a sort of perverse view of the world where you see people taking vacations, going out to eat and buying new gadgets where it all runs together and does not show the effort, hardships and sacrifices made to obtain those things.
If we as a society do not value having savings then why should we expect anyone to save? Especially is the reward for doing so is not visible?
Actually no, they build phones in Vietnam and India. They just avoid China.
Go to the mall/shopping center, and try to find something made in the US that isn't a bulk chemical product, or something so low value in relation to its weight that its still made in the US (paper). If you go back ~30 years it was the complete opposite. If you found something manufactured overseas it was unusual. So in just a couple decades we went from pretty much 100% of consumer electronics, clothing, furniture, general home appliances, cookware, toys, etc made in the US to a tiny fraction. Even in areas where we still manufacture things, its rare that 100% of the products in a particular segment are produced here. Sure, you can buy American made tires, AC units, etc, but most of the volume isn't made here. But even in the case of AC units its frequently assembled of foreign made compressors/etc where the 4 bolts, two pipes and 4 wires that need to be connected (by $15/hour labor in basically warehouses) get more value add than the actual hi tech parts made in high capex factories. All for the purposes of computing "made in America".
Please don't use anecdotes and personal experiences when discussing economics.
You lament about US not manufacturing low value added products. You can't have personal experience that would give you a good view.
You must use statistics and data to argue.
Show me the statistic that say how many shoes/sandals/boots were sold in the US last year. Now show me what percentage of those shoes were made in the US of foreign components and what percentage of them were made beginning to end of US sourced components.
Many of these companies can't even keep their internal supply chain logistics in order enough to report what country something was actually manufactured in, much less reporting hard volume/etc numbers sufficiently to do anything but obfuscate.
Put another way, if the "economic" numbers weren't so cooked they might be a reasonable basis for argument, but time and time again when you dig into something you quickly hit a dead end because no one actually collects such detailed statistics across the entire economy. Sure you can tell me how many planes Boeing made in each of the past 30 years, but good luck as you move down the supply chain, or for less valueable goods like refrigerators.
If you look at the computer industry you frequently can't even tell how many units a company sold in the US because they want to obfuscate their declining volume. To be more specific, can you tell me how many zseries mainframes IBM sold each year for the last 10 years? The last couple times I looked at this, the closest you can get is "installed capacity" which is IBM multiplying the machines by their theoretical capacity which is measured using some proprietary IBM metric and doesn't even represent actual sales because they have "capacity on demand" which allows them to sell/install a machine with capacity X but only charge and provide the customer with a fraction of X. So, each generation of machines is some larger multiple of X, which allows them to sell fewer machines (and capacity), and claim more installed capacity.
You will get a more realistic view going to your local target, and standing in the sock isle counting what people are buying than you will get from the target sales numbers.
(socks are another one of those areas where its actually possible to buy US manufactured textiles if you look, because they are the kind of garment that is easily automated. Its likely even US cotton, but whether it was shipped overseas for processing first, good luck..)
This is yet another misconception that only manufacturing is real.
Share of services as the value of manufactured products is also increasing. In developed countries it's usually 40-50%.
China produces low value added products. Producing what China does in the US would reduce value added in the US economy. The US would become poorer.
It's "deindustrialization" when US has slid down from "#1 by far" to "#3".
Not to mention we would never have the federal government sending a police force into cities that don’t want them.
The US is not exactly a “light on a shining hill”.
The UK has vast swathes of poverty in the deindustrialised north of England and other areas. Former mining and heavy industry towns that even today almost 40 years on from deindustrialisation are dominated by insecure, unskilled work and unemployment
>US is almost unique in our mass deindustrialization. Japan, Germany and South Korea have avoided this.
yup, I wouldn't necessarily include SK in that list but I'm very displeased at our deindustrialization process. Most/all of it does not make sense outside a tenuous abstract global finance system.
We are losing knowledge and control every time and every day factories are allowed to leave the country.
Entire Central Europe (Poland, Slovakia, Hungary etc.) is filled with German manufacturing plants. The Germans have done plenty of deindustrialization themselves.
Related to the dollar being global reserve currency, which encourages a trade deficit. The US has a deficit equal to the next 15 biggest deficits combined. On the other hand, Germany, Japan and South Korea are top 5 trade surpluses.
What has increased in pace, though, is capacity per person, so manufacturing _jobs_ have decreased. It's less of a geopolitical issue and more of a domestic employment issue.
If that's correct, then it's interesting: we're making few, valuable items now, rather than many, cheap items. It follows that automation isn't a drive towards cheaper production, but more a drive towards higher quality goods that simply require machines to make.
But it all takes me back to my point: from a geopolitical perspective, being good at highly-differentiated, tech-intensive, difficult-to-execute manufacturing is a great position. It's just a disaster from an employment perspective, because to get there, we traded away all our labor-intensive manufacturing.
Intel was the lynchpin of this lie. We are in a thread about Intel becoming non-competitive at highly-differentiated, tech-intensive, difficult-to-execute manufacturing.
No, that is not a great geopolitical position to be in.
Intel doesn’t have a “monopoly” in the processor space.
If China (PRC) was smart, it'd have invaded Taiwan two years ago as Trump's resolve to backup commitments to Taiwan, or pretty much any military commitments to any ally, with force is basically nil. Nearing the election it's less clear as retaliation and a standoff crisis might better suit his reelection bid under present circumstances (e.g. COVID-19 sentiment).
China missed its opportunity, but if Trump were to win re-election China would have much less to lose given their rejection of one country, two systems, the deterioration of trade ties, etc. In a lame duck Trump presidency invasion would have an even better cost+benefit profile for China.
It's the same thing with South Korea. The U.S. would likely agree to leave the Korean peninsula in a heartbeat if China agreed to regime change in North Korea, even if it was kept as a buffer state. Geopolitically it would be better for everybody involved. But senior Chinese military leadership feels honor bound as the protector of the North Korean regime, which also stands as living evidence of Chinese military superiority over the U.S. And so China defends the most egregious behaviors of North Korea, even when they openly defy China on the international stage, and even when North Korean policies cause domestic trouble in China.
A comparable mentality in the U.S. might be that regarding Cuba--completely and utterly irrational, driven by an antiquated historical narrative and unjustifiable sentiments. In some respects an even better example might be Israel, but it's exactly because it's an apt comparison that I can't actually make it--there's little room for nuance and too little good faith allowance in the domestic discourse.
There is only one company out there worth visiting in person for a man of his calibre.
I just learned about https://en.m.wikipedia.org/wiki/Hsinchu_Science_Park
Would this be to acquire, poach, invest, or relocate?
The murmur been that Intel gave up on 10nm, and wanted to do a tapeout at TSMC's fab as a stopgap measure until they can make a new process from scratch.
Those countries also have much higher trade barriers. The US is almost unique in how few trade trade restrictions they (used to) have.
This isn't true. Here's a comparison of the EU, several individual European countries, Japan and the US, and there isn't much difference tariffs or trade barriers.
Global trade-barriers have been reduced to virtually nothing among developed economies, the US isn't unique at all. This is a stale old meme that seems to be popular in the US because it frames the US as a sort of victim of global trade which is a popular political narrative but not evidence backed.
The real difference is in the overfinancialised, laissez-faire capitalism of the anglosphere (the UK suffers from the same issue of deindustrialisation, Australia as well), comopared to the industrial policy and state/big business dominated capitalism of Japan, Germany, France and so on.
UK did it as well, we let Arm be sold to foreign investors - I wonder if the French or German government would have allowed that sale.
The UK, Belgium did the same. The whole Communist Bloc also did it (for different reasons).
> invest into long term stability
Well, you have to choose one.
Correctness of this statement also depends on the type of chips.
Not everything needs the latest and greatest process node (which is predominately a fabless industry) except for advanced microprocessors, SoCs, or storage. On the other hand, 65 nm is perfectly fine for 90% of chips in existence, even 0.18 microns is still often used. You don't need EUV for a good LED driver, a serial port, or a battery charger controller. If we talk in this context, indeed, companies like Texas Instruments, NXP, ONSemi, Analog Devices, Microchip, etc, usually make chips in-house.
Intel is a publicly traded internationally-owned corporation, with no obligations to the long-term welfare of the United States.
If you'd like a chip manufacturer to make decisions based on what is good for the US, I would recommend bribing it, nationalizing it, or starting a government-backed competitor.
Any of those would be more effective at accomplishing this than hope and prayers. The free market itself is not necessarilly going to deliver the results you wish for, just because you wish for them.
Also I note you’ve raised carrot strategies when stick strategies exist also.