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Comment by Workaccount2 | Hacker News Reader

That's part of it for sure, but really the killers are that China has an insane electronics pipeline from component manufacturing to distribution, insane investment in electronics manufacturing R&D, and a supply a fresh young heads to keep things moving forward. They also do insane volume and can buy everything in quantity 10 billion (exaggeration- sort of, but economies of scale to the max).

The US has basically no domestic component manufacturing, no central hubs of electronics parts distribution, no young talent entering the field, and no new shops entering the market with cutting edge automation/capabilities. And it doesn't make much sense from a financial POV either. A team of one writing an AI wrapper "electronic parts picker" SaaS app will pull more money than a team of 50 building a board house, and they don't need $50 million upfront for capex.

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If having everything efficiently in one spot was the key factor, industry would all still be located in the places the industrial revolution happened.

Shipping is extremely cheap these days. You can move any manufacturing you want, if you're determined to do so.

One spot is a key factor in the sense of the common jurisdiction and culture, and also access to shipping routes. Hence Shenzhen.

> places the industrial revolution happened

It's still very much there on the map of Europe: https://en.wikipedia.org/wiki/Blue_Banana

> Shipping is extremely cheap these days. You can move any manufacturing you want, if you're determined to do so.

Sure, this works when you know exactly what you want. If you're prototyping or looking for a replacement component, those who can walk/drive to visit 10 potential suppliers' factories in a day have a competitive advantage versus waiting 10 business days for the samples to arrive.

Having a concentration of jobs in one place also results in having a concentration of domain experts in that place; forming a self-sustaining ecosystem. A lot of local governments the world over have tried and failed to replicate Silicon Valley, but without the critical mass of academia, technologists and VCs. Trying to replicate Shenzen without the machinists and injection mold greybeards is equally fruitless.

Again, if this was such an advantage, there would be little manufacturing in Asia at all. It would have never been economical.

Manufacturing in Shenzen was economical, just not as maximally profitable as it is now. Economies of scale are a thing.

Apple, and Google could have been formed anyway on earth, but there were advantages of being in Silicon Valley that compounded the growth into the behemoths they are now without worrying about where to source talent.

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