How hard for a trillion dollar company to build their own infrastructure in the U.S. and do it relatively cost effective?
I'm pretty sure that with a large enough investment Apple could make phones in the US for cheaper than they do in China (including the entire supply chain). The problem is big public companies live quarter to quarter.
There's definitely knowledge and IP to do this. I worked for a company that moved some manufacturing to China about 15 years ago. Everything about how to build the thing came from our engineers including redesigns based on materials/components that were more readily available in China. It would be no problem (but wouldn't make economic sense) to move production back here (Canada in this case) just as fast as it was moved to China (years ;) ).
I guess what I am getting at is that it's the only place on earth with such centralized infrastructure for making nearly anything, nothing is hard, nothing is far away, nothing is "not stocked here", it just makes for a much more convenient way to build products.
My experience "being there" was that I don't think you can replicate it easily. It has its own vibe, culture and way of Just Getting Shit Done that just feels unique.
Even today- I'm not in a real tech hub by any means but there are many injection molding places within a drive distance from me. There are also plenty of machine shops with CNCs. In the industrial area near where I live there are some major car parts manufacturers, they build yachts and more. Again, this isn't a major tech hub but you can probably make anything here, it's just gonna be very expensive.
I've heard a lot about Chinese manufacturing and I do get what you're saying. Yes it's pretty amazing today (which isn't just because of China's entrepreneurs, it's also western entrepreneurs helping create this ecosystem). But I think it's not impossible to replicate. It wouldn't be the same, we can move things relatively easily in North America, we don't need one dense city that does everything with workers living in factories. But we do need a lot more automation to replace humans.
I've never seen manufacturing in China in person but I have seen large scale manufacturing in Taiwan. A lot of that was designed/built by western companies.
In terms of costs ofcourse they're lower when you pay people less, when the living conditions are worse, when there's no worker protection, environmental or health and safety requirements...
While I'm rambling ;) another thing that we need to consider is just making better quality goods that last longer. Then "cheap" is less of a factor.
No matter where you live it almost certainly doesn't have anywhere close to the same density and variety of manufacturing hubs in China!
There's also the culture aspect, arguably more important. It can't be overstated. People get shit done in the order of minutes. We are talking as low as 30 minutes to go from factory to factory. There's a hustle and "get shit done" culture that simply isn't replicated in the West.
It's like asking, why does Silicon Valley exist in the Bay Area? Why can't it exist in Kansas, which also has people? - There's a unique culture and concentration of knowledge in the Bay Area. Offices for big tech companies are within minutes of each other, etc.
I recommend you go and see for yourself. It's really something that is very difficult to comprehend until you see it in person.
The irony of automation [1]: "the more sophisticated we make that automation, the more we become dependent on a highly skilled human operator"
A single company can move back but if all companies leave China, how do they get the skilled operators?
I think that's a bit of a myth. Apple should (and probably does) have the longterm view on this, I'd hope. And I'm pretty sure proper accounting would present the requisite massive investments in a light that shareholders do not disapprove of.
> I'm pretty sure that with a large enough investment Apple could make phones in the US for cheaper than they do in China (including the entire supply chain).
That I am not so sure. The infrastructure and resources available in China are tremendous.
A similar order would have taken about a month from Germany, at about twice the cost. Most of the US manufactures don't even take custom orders at our small scale.
Note that this isn't Ford, or GM that did it.. but rather Ford and GM and hundreds of smaller companies that supplied the raw materials to a company to make the parts that were used by companies that supplied the parts to the auto makers.
And so, yes, you could - but its not something that one company can do - or for that mater even has the competency to do for the same reason that Ford doesn't run steel mills.
The hard problem is economically rerouting the supply chain for the diverse set of parts and materials that go into these devices.
The challenge isn’t just building a factory.
Yes, TSMC 4nm is more complex from an electronics standpoint. But from a supply chain process standpoint, automotive is way more complex.
All of the best consumer electronic manufacturing sequencing and tooling is in China though, hence the problem we have today.
Tim Cook is a supply chain guy though, so I'm curious how he will approach and solve this problem.
Only other option would be a huge surge of immigration into the U.S. and I don’t think even $1 trillion can buy that kind of policy shift.