Skip navigation

Zibb

The Sandbox

Ann Steffora MutschlerWhat's happening behind the scenes in the semiconductor manufacturing industry? Read this blog by Senior Editor Ann Steffora Mutschler to find out - and chime in with your thoughts and questions.



   Advertisement

Profile

RSS Feed

  • Add this blog to your RSS newsreader!

Recent Posts

Recent Comments

Most Commented On

Archives

By Category

Blog

Tuesday, February 13, 2007

Made in the USA still works for Japanese companies. Why doesn’t it work for U.S. companies?

Feb 13 2007 9:54AM | Permalink |Comments (19) |


Semico Research Corp.'s Joanne Itow, Managing Director of Manufacturing Research wonders if manufacturing in the U.S. is still viable. What do you think? Please comment or add your own questions.

China seems to be getting most of the headlines, but it’s not the only location for expansion of semiconductor manufacturing for mature process technologies. This week, NEC Electronics America, a wholly owned subsidiary of NEC Electronics Corp., showcased a unique fab expansion project in the United States.

The project is located in Roseville, Calif., even though California is reputed to be one of the most expensive states to maintain manufacturing facilities.

How—or why—did NEC expand and upgrade a U.S. fab that is more than 20 years old while most U.S. fabs are closing or being sold off ?

NEC officials cited several reasons.

First, the company’s VP of manufacturing operations credits the fab success and efficiency to his employees. He has been at the Roseville fab for 23 years. Our tour guide was a 14-year veteran of the fab. Clearly there is value in experience and stability in your workforce. Second, having a U.S. fab is more convenient for European and U.S. customers to visit. I’m sure there was an automotive customer that required multiple manufacturing sites to ensure a more reliable source. And third, Roseville was attractive because that the infrastructure already existed.

This upgrade wasn’t without its challenges. NEC installed 8-inch equipment alongside the 6-inch operations while still maintaining 6-inch production. That requires a commitment from all the people involved to make it work.

But this effort also begs the question, ‘Is manufacturing in the U.S. still viable?’ It certainly appears to be. Maybe our workforce talent just needs to be utilized differently. Or maybe this industry needs to reconsider the value of property and equipment. Either way, it sure would be nice to see fewer empty fab shells in the U.S. 

Reader Comments



at 2/13/2007 12:58:15 PM, IronHand said:
Maybe we need to get back to our roots. Globalization is only good for the third world country you're going to and the people making the money. The common man in the USA will save on cheap electronics in the short run, but in the long run he is not only going to lose his job, but his freedom as well. The USA is founded on the principle that the individual is important because God made him. Other countries don't see it that way. We need to protect that way of life with TARIFFS. I know that's a dirty word, but only because the Globalists are in charge. The Globalists don't give a rip about anyone's freedom but their own as long as they make their buck or manipulate people's lives or whatever megalomaniacal tendency they are trying to satisfy. They don't care that men are endowed by their Creator with inalienable rights.



at 2/13/2007 1:12:19 PM, SlimTim said:
I absolutely agree with the above statments! However, tariffs will never be used to limit our imports because that could level the field, and the globalists who run things will not let that happen.



at 2/13/2007 1:15:32 PM, WorkingMan said:
No, the problem is that we have these grossly overpaid CEO's. They want to outsurce everything they can while they continue to plunder the company and the American economy.

Nobody is worth that kind of money, and if they paid them what they are really worth, then the company could then be competitive and maintain jobs in the USA.

We also need to get labor and management to work together and not be bitter enemies. Afterall, we should be working for the common good.

Management also needs to get up to date with what customers are requesting. Detroit built cars with planned obsolescence for so many years, and people started buy japanese cars because they had so much less maintenance. Deming and Juran are the ones that taught the Japanese about quality, yet they are Americans and no one would listen to them here.

The first step would be to fire the CEO's and the board of directors, saving each company enough money to instantly show large profits.



at 2/13/2007 1:56:31 PM, HomeGrown said:
There are other fabs in CA expanding too. AMD's old SDC which is now part of Spansion, just completed a conversion to 12". And all of Maxim, Micrel, and Linear Technology have fabs in the Bay Area that either are in the midst of expansions, or have undergone some kind of expansion in the last 2 years. Luckily, some companies still do see the benefit of manufacturing in the U.S. in general, and California and the Bay Area specifically.




at 2/13/2007 1:57:37 PM, TradeWorks said:
In an era of expanding markets and opportunities, tariffs and other protectionist measures are precisely what the US cannot afford. We are the world leaders in innovation and design and have the most to gain by increasing international trade. The more agile and flexible we are, the better we'll do. Our greatest competitive advantage is that American workers are smart and capable and the more we take advantage of that flexibility the better off we will all be. No one can beat us at this and we should welcome increased globalization with open arms. We need policies to protect companies and workers through the change to come but pretending we can avoid change is not a strategy for success. The alternative to free trade is to kill off existing markets and that will raise costs for US consumers and cost hundreds of thousand of jobs.



at 2/13/2007 4:01:16 PM, HumptyDumpty said:
Kudos to IronHand and WorkingMan! They''''re on the right track. When did anybody ever hear concerns for the existing workforce expressed in a Board meeting? At least with any hint of a tone of sincerity. TradeWorks is off the mark-of course American workers are smart. So are Chinese workers, Japanese workers, and workers in every country in the world. The only chance the American Middle Class has is for American industry to stay on the cutting edge while exporting "mature" American jobs. This means our educational institutions have to be made available to the working class through other than athletic scholarships. Have our national priorities been in line with the needs of our citizens for at least the last 40 years or so? Think about it.



at 2/13/2007 9:40:13 PM, The BIG Q said:
There is a curious lack of concern for the well being of workers in American companies. The managements are so hung up on eliminating inefficiencies that they don't realize that their workforce needs experience to achieve the efficiencies they are seeking. Foreign companies generally work with their American workers not squelching them like American companies.



at 2/26/2007 7:56:52 PM, Ann Steffora Mutschler said:
There are a lot of good points raised here. Would an anonymous poll give a good indication of how workers - i.e. fab workers and design engineers - feel they are being treated? Thanks to all for your comments, and please keep commenting!



at 3/5/2007 8:17:44 AM, Bandini said:
What do the critics think globalization is all about? It''s about bringing the rest of the World UP to our standard of living in a far more efficient, effective, and permanent way than the old "foreign aid" programs of simply giving money to developing nations, the latter very regressive. We hear demands to increase minimum wages when few jobs pay at that minimum anyway, because of competition for good employees, a healthy situation. Lower tier folks also benefit from globalization by having access to more goods that support our advanced ways of life. (a fantastic model for all countries). CEO and Board pay, as a percentage of total company cash flow, is minuscule, and nothing more than a false distraction. They should be paid well for maintaining tens of thousands of secure jobs that most of their critics could not do if it were handed to them on a silver platter. Work hard, be dependable, and count your USA blessings!



at 4/4/2007 3:12:39 PM, ArizonaRep said:
When you consider the loss of jobs in just about every manufacturing sector of this country it creates many challenges we must face. Assuming that most of these jobs will not return in our lifetime and the taxes generated, profits created by the companies who invested in R&D and managed to thrive will probably decrease or disappear one of the many challenges is-- how does the U.S. maintain the standard of living we have enjoyed for the past few decades. Certainly, as previously mentioned in the previous blogs or comments, our ability to create new ideas, markets and products and protect these ideas will be critical to the future economic viability of this country. With the number of misguided elected or appointed politicians and officials on the Federal and local level, the importance of demanding improved allocation of monies to support much more effective educational systems, less waste on “pork” projects that do not improve our ability to compete, effective copyright or patent protection..worldwide that assist in our ability to penetrate markets throughout the world is critical. There is a chance for this country to enter into a new “industial revolution” which involves a host of new energy sources for transportation and power generation but that time is finite and we must demand a plan similar to the “Marshall Plan” to allow and force this revolution to begin….immediately. If this comment appears to be too political or rhetorical I apologize…perhaps, with over 45 years in the electronics industry I have become a bit frustrated.



at 4/25/2007 2:08:49 PM, Roberts said:
Bandini lives in a tree house. It surely is about bringing the rest of the world up to our standard, as he says. But at whose expense? Why do we owe Mexicans a living; China our technology and Japan our tax abatements to build here? Why do we owe India our jobs, also our technology and our tax dollars? Our industries built this country and I sincerely doubt that globalists give a damn that they're "do-gooder" attitude will destroy us.



at 5/9/2007 1:38:11 PM, Ampman said:
Globalization etc are all about greed to the detriment of general well-being of the rest.

Whereever manufacturing goes, R&D will follow. The need for R&D is always proportional to manufacturing capability. Manufacturing leads to real profit by selling products that R&D develops. If there's more profit, businessmen will hire more engineers to cost-reduce products and/or develop related products. Therefore, exporting mfg will result in exporting other jobs as well.

Look around you. Who's making good money? Not the engineers, but the middlemen selling products imported from China, such as Walmart.

Retail giants now have more market power than manufacturers. They want to buy from the cheapest sources so they can make the most profit. As a result, their competitors are forced to source from the same off-shore sources too.

I make high end audio gears. To survive I have to go offshore too, otherwise retailers won't buy from me. It's a vicious circle once started by some companies going offshore.





at 5/11/2007 11:11:55 AM, Ann Mutschler said:
Thanks for the comment Ampman. I do have to wonder how our economy will look in 15 or 20 years as more and more jobs go overseas. Is it possible to bring jobs back to the U.S., or is the situation too far gone?



at 5/12/2007 4:38:26 AM, rameesh said:
"buy low, sell high" is the principle for all trade. After all, those who make most money are Americans, whether or not managers, or board of directors. They bring money home, and created more service jobs, and let low class Americans consume more affordable products than they did before. Living standard for them is better off. The unemployment today is low, in fact is lower than the time when globalization started 15 years ago. For most low class American people, manufacturing jobs, which is usually labor intensive, are not necessarily better than service jobs.



at 6/29/2007 12:49:20 PM, Dan Aquinas said:
Bandini said "CEO and Board pay, as a percentage of total company cash flow, is minuscule, and nothing more than a false distraction. They should be paid well for maintaining tens of thousands of secure jobs ..."

CEOs are TOO well paid. Consider following statement of CEO pay from article at: www dot startribune dot com/535/v-print/story/1220689 dot html

"According to the Economic Policy Institute, between 2000 and 2005 median CEO pay rose 84 percent to an inflation-adjusted $6.05 million. During the same period, median worker income fell 0.3 percent to $38,223.

Another metric, the ratio of average CEO compensation to average worker pay, rose from a multiple of 42 in 1980 to 411 in 2005."

While I am not against paying CEO's more than the average worker, I think they should be paid *fairly* and not getting their pay off the backs of the average employee. It certainly doesn't justify a CEO's increased pay if all they do is move job function "X" off-shore. That is a pretty easy kind of decision and hard to reward richly.



at 7/4/2007 10:54:38 AM, Uncle Sam said:
That is a great story. We need more news like that. Americans are great workers and have always taken pride in the work we do. It can be done, and we need to ask more companies to do it. Move back to the USA and market that fact. I always check the label and only buy from overseas when forced to because there are no American Made products to choose from. If you are looking for products made in the USA I found a good resource at a website named americansworking.com



at 5/9/2008 5:27:00 PM, Smith said:
When working at a large American owned semiconductor fab, I felt like I was treated like a number. No matter what I did, management never listed to my ideas until it directly affected them. Now I work at a small Japanese subsidiary in AZ (<50 people) and I am treated like a human being. Everyone works together to get things done. I love my job now!



at 8/8/2008 2:00:16 PM, tom said:
Americans have not always worked, and when allowed willingly taken on additional responsibilities. Pressures to offshore felt in the American business communities are in large part inertial, left over from the 1970's, even today I am reminded to never buy any American product made on a Monday, Tuesday, Thursday or Friday because the line workers are either hung over or getting drunk/high on those days. This is a reputation was earned over a long time and will take longer to out live, till then we must live and work as if we have something to prove, after all we do.



at 3/12/2009 7:21:28 PM, stabie said:
I'm not sure its tariff's needed for the specific china/us trade. The problem is china sets the exchange ratio. If we were to allow free markets (and china does not) then the exchange ratio would be significantly different, making us goods cheaper in china and chinese goods more expensive in the US. Hopefully we will find our backbone and force china to float their currency, with trade sanctions if they do not.

Post a comment



Display Name

Change Image
Before submitting this form, please type the characters displayed above.
Note the letters are NOT case sensitive.


ADVERTISEMENT

About Us   |   Contact Us   |   Free Email Newsletters   |   Free Magazine Subscription  |   Advertising   |   RSSRSS   

©1997-2009 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
Use of this Web site is subject to its Terms of Use | Privacy Policy

Please visit these other Reed Business sites