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Comment by onepremise | Hacker News Reader

Seriously, why are we still outsourcing chip manufacturing to other countries? Sure it's cheaper, but we sacrifice a lot to have a society of corporate slaves build our tech. Security, core domain knowledge, capability, corporate secrets, patent rewards and enforcement, etc... All of it you throw away the minute you ship your manufacturing out of the country. I've seen enough board printing machines out there to start working on our own. As a country, we need to close this gap, more automation and capability and there will be no need to outsource circuit board printing and manufacturing. We will be much better off.

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Canadian steel is considered by this administration to be a national security risk. But Chinese made boards and chips installed in weapons systems and crucial data centers? No problem.

Let that sink in for a moment.

https://www.wsj.com/articles/dont-trust-the-chinese-to-make-...

I love a good Trump bashing moment as much as the next guy, but this is inaccurate. The DoD has stringent requirements and quality control procedures in place for their chip procurement. Not to say they couldn't be improved, but the DoD has been aware of this threat for a while, and seems to be mitigating the risk fairly well.

Also, as far as I understand the argument, it goes beyond "Canadian steel is a national security risk". A couple of years ago, Mexico was caught laundering $2B of Chinese aluminum to avoid US taxes.

http://fortune.com/2016/09/09/chinese-aluminum-giant-is-tied...

The theory, from the Trump crowd, is that Canada is also engaged in similar shady dealings with China. If true, that would put the US at risk.

Even if true, how does that make it a national security risk?

The concern was the depression in prices was cratering local high-quality smelting capacity.

However, the DOD issued a memo (penned by Mattis iirc) indicating that there was no supply related concerns. The lack of aluminum used to justify the tariffs was in fact just the result of the LME's anti-market-tampering rules creating an incentive for metals traders to stockpile the material in private stores rather than in LME warehouses.

There was a nice article about this yesterday, but I don't have the link.

It doesn't. They claimed that so they could enact the tariffs, otherwise it would be a WTO illegal tariff. I think Canada/others are arguing that it is not a security risk and therefore is indeed an illegal tariff. This is what I remember from some articles. Please correct/elaborate.

Their argument is that you need strong domestic steel industry to build tanks, ships, etc, in case of war. Not saying I'm agreeing with it just pointing out the stated rationale behind the tarrifs.

If the source is China, in a hostile period they might stop sending it. But according reportings I have read, the US DoD only uses about 0.5% of steel in the US, and only ~30% of US steel is imported.

Maybe because it undermines fundamental US business interests, and therefore wellbeing? If so it still seems like a stretch to me. Doubtful we'd have no where else to source steel if war or disaster struck.

The thing being called a national security risk is a lack of domestic production capability. No one is saying Canadian steel is sabotaged or something.

Yes, obviously- but one of our closest allies shorting us on steel supplies in a time of crisis has never happened, while espionage from China-produced tech is happening right now. Which should be our priority?

Though it is, because it happened with Kobe Steel. (Not saying Canada specifically.)

They faked the data on what it could handle; and with things such as aircraft, lives depend on that data.

That isn't a Japanese steel concern though, that's a steel manufacturing concern. U.S. Steel could do the same thing.

But they are saying that Canada would cut us off from their steel production in a time of need, which is a pretty absurd assessment of the situation.

Counterpoint: even if we ignored the fact that you cannot possibly produce the volumes of chips necessary at the price necessary in your country rather than in "we don't have to acknowledge all the human rights violations" countries, why would you believe this problem goes away if chip manufacturing were done in your own country, rather than another?

The moment the option of taking control of a production line of something _this important_ becomes available, your local specialized organized crime outfits will start to figure out ways to insert themselves into those production lines, learning the ins and outs, and figuring out a way to get something, anything, in there that won't be noticed but will give them a hook into millions of systems.

The law does not prevent crime. It just puts a price on it. While that price is typically too high for individuals, for organizations that have no business registration to revoke, and no CEO to drag to court, it is an entirely trivial cost.

>Counterpoint: even if we ignored the fact that you cannot possibly produce the volumes of chips necessary at the price necessary in your country rather than in "we don't have to acknowledge all the human rights violations" countries, why would you believe this problem goes away if chip manufacturing were done in your own country, rather than another?

It's certainly easier to enforce laws and observe manufacturing processes at domestic factories than it is at factories thousands of miles away in a country that actively encourages IP theft and other wrongdoings, don't you think?

Not really, no. Why do you think it be easier to police? In concrete terms: who do you expect to do the policing? Because this is the kind of work that requires an expert, to catch an expert, messing with a product created by people 100% ignorant of _what_ they're making. Just _that_ they're making them. Where are you going find enough experts to check the work of even a single production line?

Because "thousands of miles away in a country that actively encourages IP theft and other wrongdoings". It makes perfect sense. If you don't think that, try to run any business in another country. It's just obvious that it would be easier to do domestically. You just list other set of problems. Those problems only get compounded if we'are talking about another country.

Not all societies are equally corrupt.

But no societies are free from organized crime. And last time I checked, no western country was free from card skimmers either.

You can prosecute someone in your home country and even change policies with enough political support. Best of luck doing this in China without getting 're-educated'.

But note that as always: that's too late. By then, the damange has already been done, and the person you take out of the system is simply replaced by anyone else. Card skimmers sure as hell haven't gone away just because we wised up to them: we now just pay A LOT MORE on law enforcement, and all that gets us is law enforcement now at least staying in lockstep with the skimmer's increased sophistication.

Now imagine how much it'll cost to stay in lockstep when the level of sophistication becomes "a single component the size of half a grain of rice".

"Free", no. Much less affected, yes. Organised crime in Mexico and Italy is a much greater problem than in, say, the UK or Germany.

You're letting the perfect become the enemy of the good here

Not really: I'm letting the practical dictate the process. Catching this kind of inflitration requires experts to scrutinise the work of people who know nothing about what they're making, to catch experts with a much more vested interest in success, and you aren't going to find enough experts to take that job, at a good pay, to check the output of even a single plant. Let alone an entire industry.

If the question is "why don't we move chip production to the US, so this doesn't happen" the answer is "because you might be able to do that for one or two plants. And it'll probably drive up the price by an order of magnitutde, so they'll go out of business soon after. And you sure as hell can't move the entire industry because of prohibitive cost and shortage of manpower to do the bit that you want tacked on that can't be trusted to be done abroad".

It's hard to compete domestically against low prices caused by China's completely different standards for wages and human rights for laborers. Plus, here we don't like the idea of manufacturing industries being subsidized by the government (except in the case of "defense" of course...), while China obviously has no qualms with doing so.

> except in the case of "defense" of course...

Well, this thread is exactly the reason we subsidize the defense industry to make sure things are produced in the US.

>Seriously, why are we still outsourcing chip manufacturing to other countries?

I actually agree it might be better for the Americans to manufacture things in America - especially things used in critical government systems.

But this seems like a human problem - if all the factories were moved to America, couldn't those factory managers etc also be bribed?

American manufacturing in the 60s was rife with unions w/ ties to organized crime.

Business culture is different in the US and China. If you tamper a chip in China and go unnoticed you are considered smart & the winner. If you do so here you'll be getting a more negative reaction.

Western manufacturers have a tendency to buy from the cheapest supplier, even if it isn't physically possible to manufacture at that price point without cutting massive corners or making profit off of some externality. However, when Chinese manufacturers build their own brand, you'd be surprised how the business culture suddenly creates a different set of incentives.

Trust alignment of incentives, as opposed to hey-they-promised-an-actually-impossible-pricepoint-on-paper.

I think I saw this on another thread. You're saying if someone bids that they can do something for a price that's not reasonable, it's my fault for believing their mischaracterization? "Fool me once, shame on me."

I much prefer the other mode of operation: "Fool me once, shame on you. Fool me twice, shame on me."

> Sure it's cheaper

That's enough, full stop, say no more. The other costs are real yet they're either not marginal, are borne by others, or both.

You're conflating a few things there. Whilst companies like to make noises occasionally about saving the planet, doing the right thing, making (your country goes here) great etc, it's just horseshit. They exist to make money. That's it.

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