Comment by bluGill
15 hours ago
> There’s no economic sense to build a factory in the states…
That isn't how it works. Details matter.
A local factory can save a ton of money because it can be more just in time - you don't have to build excess because of shipping times. (shipping costs can also save a lot of money for a local factory).
The states have lots of cheap reliable power (not perfectly reliable, but close enough). If your production line is mostly automated (or could be) the states are cheaper - there isn't much labor anyway.
Production close to engineering makes for a lot of savings because when a part is designed you can get a prototype to testing faster.
there are lots of other factors, and most are not in the favor of local production but there are several that are. Where you fall is an optimization problem and there is no one right answer for everything.
> The states have lots of cheap reliable power (not perfectly reliable, but close enough).
Industrial electricity rates are pretty much the same in China and the US, from 8-9c/kWh. In both countries, however, electricity is going to face upward price pressure from AI datacenters.
> Production close to engineering makes for a lot of savings because when a part is designed you can get a prototype to testing faster.
This already exists in the US. In California, for example, there are many specialty prototype manufacturing companies that focus on this problem specifically. They are adjacent to the r&d firms designing the products.
That's not the type of manufacturing that the recent debate over reshoring is about. It's about production scale manufacturing - creating an American Shenzen with an equivalent amount of jobs - and very soon. But any such capability will be heavily automated, so it won't produce the equivalent jobs.