The Manufacturing Sectors of the Future
Posted by Bert Maes on February 8, 2010
The U.S. manufacturing economy shifts away from heavy sectors, such as automobiles and basic chemicals, toward higher-tech products like super-fast computer chips.
The restructuring now under way offers insights into what kinds of goods the U.S. should produce, and in what volumes.
Semiconductor makers saw U.S. demand recover sharply as computer makers scrambled to catch up with a pickup in business investment toward the end of 2009.
Intel, which produces chips in Chandler, Ariz., Rio Rancho, N.M. and Hillsboro, Ore., boosted its capital investments to $1.08 billion in the fourth quarter, part of a two-year, $7 billion program to upgrade its U.S. plants.
Many companies still prefer to produce semiconductors in the U.S., particularly if their manufacturing is highly complex. Being close to the U.S.-based design centers of major chip users like computer maker Dell Inc. and consumer-electronics maker Apple Inc. also can be an advantage.
Texas Instruments Inc., the second-largest U.S. chipmaker will spend almost $1 billion this year to expand three factories and open a fourth to fill orders. The company is also hiring 250 workers to open a new chip-manufacturing plant in Richardson, Texas, that will eventually employ 1,000. (press-enterprise.com)
“This is a kind of manufacturing that will make sense to do in the U.S. for a long time to come,” said Tim Peddecord, chief executive of privately held memory-module producer Avant Technology, which recently opened a new 50,000-square-foot plant in Pflugerville, Texas.
Manufacturing in the U.S., Mr. Peddecord said, allows it to turn around U.S. orders in 24 hours, an advantage in an industry where demand is volatile and clients try to keep inventories low. In addition, the reduced freight costs, compared with shipping goods from China, can offset the added cost of U.S. labor, since labor accounts for less than a hundredth of his average sales price.
Source: The Wall Street Journal