FOXCONN moving fabs?

[lakonic]

Summary

Hardware manufacturer redistributes its production  out of china.

 

Quote

Taipei – Foxconn, the world’s largest contract manufacturer, says it plans to move more of its production outside China under the impact of the trade war between the world’s two largest economies.

 

Electronics Supply Chains Splitting Between China and U.S.

By Alan Patterson  08.19.2020

https://www.eetimes.com/electronics-supply-chains-splitting-between-china-and-u-s/#

 

My thoughts

Why is this even an issue? The rest of the world doesn't revolve around the US. ? Why would Foxconn spend resources to accommodate the US when this is nothing but a temporary political atmosphere. In the long run it shouldn't matter but in the short term i.e. consumer price will be driven up. This will slow any recovery from current market stress.

 

Edited August 24, 2020 by Spotty
Added link to source & quote box to comply with guidelines

[Bombastinator]

2 hours ago, lakonic said:

Summary

Hardware manufacturer redistributes its production  out of china.

 

Taipei – Foxconn, the world’s largest contract manufacturer, says it plans to move more of its production outside China under the impact of the trade war between the world’s two largest economies.

 

This post originated on EETimes website

 

Electronics Supply Chains Splitting Between China and U.S.

By Alan Patterson  08.19.2020

 

My thoughts

Why is this even an issue? The rest of the world doesn't revolve around the US. ? Why would Foxconn spend resources to accommodate the US when this is nothing but a temporary political atmosphere. In the long run it shouldn't matter but in the short term i.e. consumer price will be driven up. This will slow any recovery from current market stress.

 

Because it makes them a true multinational. America is a random choice pushed by the American government.  It probably could have been anywhere.  Likely would have been Taiwan because language and culture convienience  but there might be a different problem. 

[kakik09]

11 hours ago, lakonic said:

Summary

Hardware manufacturer redistributes its production  out of china.

 

 

Electronics Supply Chains Splitting Between China and U.S.

By Alan Patterson  08.19.2020

https://www.eetimes.com/electronics-supply-chains-splitting-between-china-and-u-s/#

 

My thoughts

Why is this even an issue? The rest of the world doesn't revolve around the US. ? Why would Foxconn spend resources to accommodate the US when this is nothing but a temporary political atmosphere. In the long run it shouldn't matter but in the short term i.e. consumer price will be driven up. This will slow any recovery from current market stress.

 

Because at worse, they can just pass the additional expense to their clients and at best they've ensured that they've mitigated, at least somewhat, the impact of a future trade war. 

[Bombastinator]

I have noticed companies talk about creating tangible presences in the US a lot more than they actually do it.   Some words were offered that make hay for the US administration and which the Administration will pay actual value for.  Will it actually happen though or is it just “I will gladly pay you Tuesday for a hamburger today”?  FoxCon got a hamburger today most likely.  Paid out of the US treasury in some backwards fashion.  That hamburger may have been merely a “we won’t do this thing”. They may get hamburgers from lots of places and not actually go anywhere. Let’s see if something actually gets built and where it gets built. Saying is not doing. The next step is to request more hamburgers from various states and cities. It hasn't even gotten that far yet. 

 

FoxCon batted it’s eyes at the US. There seems to be all this “why did they bat their eyes at that country?! Why did they not bat their eyes at my country?”  It’s just eye batting, and it’s possible the US paid handsomely for it in some fashion.

[xtroria]

Generally it's smarter not to rely on one source, especially with the current geopolitical climate

[Bombastinator]

18 minutes ago, xtroria said:

Generally it's smarter not to rely on one source, especially with the current geopolitical climate

Point. “Moving fabs” wouldn’t be accurate.  “Adding fabs” might be. The US has a lot of old fab capacity that might be easy to get rolling.  Might possibly be cheapest.   I suspect it’s a situation where the us administration paid foxCon in some way using US assets (monetary is unlikely but political isnt) to simply look at it. The administration gains and it got to buy something for itself using other people’s assets.  Whether it’s real or not doesn’t matter.  The problem the US has at the moment is it’s administration only works to better the situation of its membership, and that membership is VASTLY smaller than it pretends to be. This can sometimes include  betterment of the position of the nation but that’s coincidental.  Crumbs from the table.  The statement has material value to the administration because it helps with an upcoming election.  It doesn’t actually have to BE anything as far as the administration is concerned.

[porina]

13 hours ago, lakonic said:

Why is this even an issue? The rest of the world doesn't revolve around the US. ?

We live in a complicated interconnected world. It is difficult to not have any connection to the US. The current US Gov stance of "you're with us or against us" is divisive. At the end of the day, it is often less pain to comply with the US gov wishes than not.

[Bombastinator]

16 minutes ago, porina said:

We live in a complicated interconnected world. It is difficult to not have any connection to the US. The current US Gov stance of "you're with us or against us" is divisive. At the end of the day, it is often less pain to comply with the US gov wishes than not.

Or at least pretend to.   It is important I think at this point to differentiate at least to some degree the US and the US administration.  It is useful to the US administration though actively damaging to the US, for a group such as Foxcon to pretend to comply because of election timeframe.  

[Pickles von Brine]

15 hours ago, lakonic said:

Summary

Hardware manufacturer redistributes its production  out of china.

 

 

Electronics Supply Chains Splitting Between China and U.S.

By Alan Patterson  08.19.2020

https://www.eetimes.com/electronics-supply-chains-splitting-between-china-and-u-s/#

 

My thoughts

Why is this even an issue? The rest of the world doesn't revolve around the US. ? Why would Foxconn spend resources to accommodate the US when this is nothing but a temporary political atmosphere. In the long run it shouldn't matter but in the short term i.e. consumer price will be driven up. This will slow any recovery from current market stress.

 

There is also the fact so many companies have their stuff in China. If the china trade war really gets going, things could get dicey for a lot of companies. Then, there is the fact COVID was a thing. It ended up affecting the whole world, but what if something similar happened but only affected China again? Many many companies had to shut down manufacturing for that. Having all your eggs in a single basket isn't a good thing. 

[Bombastinator]

Yah. I don’t think they’ll be reducing production in China no matter what.  This is merely an indicator that they might build something in the US as well.  The US election is so close though that it can’t be trusted as anything but marketing fluff.  The current administration is desperate to produce anything seemingly positive from the trade war thing.  So far it has done massive damage and produce no tangible positive results.  Even a false word would have value to it, since such a thing would last till the election if no longer.  That they would build in another country as well is reasonable, even smart. Whether it is in fact the US though I wouldn’t put any solid credence in until things are much farther along than they could be by November. 

[thorhammerz]

16 hours ago, lakonic said:

Why is this even an issue? The rest of the world doesn't revolve around the US. ?

For the past 75 years, it arguably has (to the chagrin of everyone, often including the Americans). Or more to the point, it has revolved around the world order ("Bretton Woods", not the monetary agreement, but the broad-based geopolitical & trading network) built by, maintained by, and now being abandoned by, the Americans.

 

The Americans are on their way out (whether one believes the narrative they are going home by choice, or the narrative they are being kicked home, is irrelevant to the core fact that they are going home). That means countries must begin to look after their own interests once again. Many of them will cease becoming countries (in all but name), and little more than subservient vassals pumping domestic nationalist propaganda while bending the knee to their local hegemon on all issues of substance.

 

The last few times this happened (that is, countries looking out for themselves), we got the various iterations (Imperial, Nazi) of the German Empire, the Soviet Union, the imperial Japanese Empire, the Western-European maritime empires, and all the wars the came along when their interests (or spheres of influences) began to conflict or overlap.

 

Just food for thought.

[Bombastinator]

2 minutes ago, thorhammerz said:

For the past 75 years, it arguably has (to the chagrin of everyone, often including the Americans). Or more to the point, it has revolved around the world order ("Bretton Woods", not the monetary agreement, but the broad-based geopolitical & trading network) built by, maintained by, and now being abandoned by, the Americans.

 

The Americans are on their way out (whether you believe the narrative they are going home by choice, or the narrative they are being kicked home). That means countries must begin to look after their own interests once again. Many of them will cease becoming countries (in all but name), and little more than subservient vassals pumping domestic nationalist propaganda while bending the knee to their local hegemon.

 

The last couple of times this happened (that is, countries looking out for themselves), we got Nazi Germany, the Soviet Union, and the imperial Japanese Empire. Just food for thought.

The Americans have needed to be on their way out since the 1970’s, at least according to US economic scholars in the 1970’s.  The concept was that a country either deflated like France and Britain did after WW2 or hollows out from the inside and collapses to nothing at all like the Ottoman Empire.  The big move for Regan in 1980 was to reject this and go the Ottoman route. Big military, Lots of projected power, etc..   It appears now the GOP is seeing the writing on the wall and following 40 years later.  The question is can it still be done? Time has become critically short.  Maybe too short.  They’re still lying about it of course.  “Make America Great Again” was in theory the claim that this is not happening though so far it seems it’s mostly about returning to partially eliminated racist systems with a little ideology thrown on top. 

[thorhammerz]

23 minutes ago, Bombastinator said:

at least according to US economic scholars in the 1970’s. 

Yes. But what most people overlook was that the system was never designed to economically benefit America. The alliance network (not "free trading network") was used to fight a continental superpower on the far side of the world. America may control the seas, but fighting a land war against the Soviets would mean outright occupying (to the tune of several million troops along the entire periphery) both sides of the Eurasian landmass. In contrast, the Americans "only" had to field several hundred thousand boots-on-the-ground per theatre during cold-war conflicts.

 

America had a few choices:

• Pay everyone (by subsidizing their economies and guaranteeing everyone access to resources and markets) to be on your side, to willingly fight in beside (or in front of) you.
• Overextend yourself and lose from attrition.
• Allow the Soviets to attain full continental primacy, and thus have the ability to field a transoceanic navy (remember that no power in the world can threaten America in the conventional sphere/axis/plane without first attaining a navy capable of global reach).

The reason we see such discontent among the Americans (with regards to global free trade) now, is that they have been paying for a system that no longer provides them with the security framework (quite literally guns for butter), for a whopping 3 decades (Soviets collapsed in the early 1990s).

 

No need for the world's guns = no need to subsidize the world (or guarantee energy supplies... yikes...).

[Bombastinator]

39 minutes ago, thorhammerz said:

Yes. But what most people overlook was that the system was never designed to economically benefit America. The alliance network (not "free trading network") was used to fight a continental superpower on the far side of the world. America may control the seas, but fighting a land war against the Soviets would mean outright occupying (to the tune of several million troops along the entire periphery) both sides of the Eurasian landmass. In contrast, the Americans "only" had to field several hundred thousand boots-on-the-ground per theatre during cold-war conflicts.

 

America had a few choices:

• Pay everyone (by subsidizing their economies and guaranteeing everyone access to resources and markets) to be on your side, to willingly fight in beside (or in front of) you.
• Overextend yourself and lose from attrition.
• Allow the Soviets to attain full continental primacy, and thus have the ability to field a transoceanic navy (remember that no power in the world can threaten America in the conventional sphere/axis/plane without first attaining a navy capable of global reach).

The reason we see such discontent among the Americans (with regards to global free trade) now, is that they have been paying for a system that no longer provides them with the security framework (quite literally guns for butter), for a whopping 3 decades (Soviets collapsed in the early 1990s).

 

No need for the world's guns = no need to subsidize the world (or guarantee energy supplies... yikes...).

It’s not overlooked and never was.  It’s factored in.  It’s merely that it’s a tiny and limited part of the issue.

further explanation about why this is not a Cold War thing and never was

Spoiler

 There seems to be this assumption that The Cold War still dictates world Policy.  It hasn’t for most of my life.  It only sort of ever did.  It did mask the cause of some problems though, and solving it didn’t fix them.  Worse, it caused others to be ignored. What is really dangerous right now is thinking that the Cold War and it’s remnants are the entirety of what is causing problems.  

Current structures were affected by Cold War events, but they weren’t created BY them.  Getting rid of the ideology stuff didn’t change the world. The Cold War was system ideology and economic boundaries at the same time. The system ideology thing is gone but the borders didn’t change.  The biggest headache the Carter administration had wasn’t wasn’t even the Soviet bloc. It was OPEC.  For the US the energy crunch was worse economically than Covid, and it had nothing to do with the Cold War.

 

 The Cold War was a drain and a worry but not an economy killer.  Detente was working. What became clear way back then is the Cold War was not just some anomaly that solving would make base problems go away. A problem but not THE problem.

 

The point, While not specifically wrong, is  largely irrelevant to the issue inside the US.  The dissolution of the soviet system removed only a small piece of the issue.  Not even a piece really, just a name. That it happened is true, and that it affected the situation is true, but that it was the whole of the situation is not.  A half truth.  Or more like a 10% truth. The deflation thing is unaffected. It’s still a base problem for the US and always was.  Sure the Cold War was a big deal, but it’s just one thing. the nature of the alliances between the EU and the US has changed several times in the last 40 years.  Back in the 70’s the US populace was looking primarily at the Soviet Situation, which is no longer there, but it wasn’t the only issue.  other different issues emerged.  US EU relations are not central to the concept, or even really related.  Even attempting to connect them is bizarre.  Looking for a reason to do such,  I suspect an argument is being attempted that the EU itself is all about the Cold War, and as such, should be dispensed with.   IMHO It’s just as dumb as thinking The American economy is only about the Cold War, but that doesn’t really matter. It’s separate to the US problem.

 

[thechinchinsong]

3 hours ago, thorhammerz said:

Yes. But what most people overlook was that the system was never designed to economically benefit America. The alliance network (not "free trading network") was used to fight a continental superpower on the far side of the world. America may control the seas, but fighting a land war against the Soviets would mean outright occupying (to the tune of several million troops along the entire periphery) both sides of the Eurasian landmass. In contrast, the Americans "only" had to field several hundred thousand boots-on-the-ground per theatre during cold-war conflicts.

 

America had a few choices:

• Pay everyone (by subsidizing their economies and guaranteeing everyone access to resources and markets) to be on your side, to willingly fight in beside (or in front of) you.
• Overextend yourself and lose from attrition.
• Allow the Soviets to attain full continental primacy, and thus have the ability to field a transoceanic navy (remember that no power in the world can threaten America in the conventional sphere/axis/plane without first attaining a navy capable of global reach).

The reason we see such discontent among the Americans (with regards to global free trade) now, is that they have been paying for a system that no longer provides them with the security framework (quite literally guns for butter), for a whopping 3 decades (Soviets collapsed in the early 1990s).

 

No need for the world's guns = no need to subsidize the world (or guarantee energy supplies... yikes...).

It's why the US has such as focus on their Navy and why the US Navy is indisputably the largest and most powerful in the world. Since so much of global trade is conducted by sea, and the global trade system for the past 70 years has been essentially implemented by the US against Soviet interests, the US has (or at least had) a vested interest in policing those sea lanes. I'm curious to see how a waning US interest in global trade will impact the foreign and military policy of other countries. You can already see this with how much China is investing in their Navy, as they know that a powerful navy is needed to conduct the trade that they so dependent on.

[Bombastinator]

17 minutes ago, rrubberr said:

"Hmm I wonder how long it will take for bizarre political platitudes to seep into a thread about Foxconn fabs..."

 

0 additional posts it seemed.  It started in the commentary at the start of the thread. 
 

 

5 minutes ago, thechinchinsong said:

It's why the US has such as focus on their Navy and why the US Navy is indisputably the largest and most powerful in the world. Since so much of global trade is conducted by sea, and the global trade system for the past 70 years has been essentially implemented by the US against Soviet interests, the US has (or at least had) a vested interest in policing those sea lanes. I'm curious to see how a waning US interest in global trade will impact the foreign and military policy of other countries. You can already see this with how much China is investing in their Navy, as they know that a powerful navy is needed to conduct the trade that they so dependent on.

well.. 70-40 years ago anyway.  After that it’s been more of a “policemen” thing.  Drug runners and pirates and stuff.  There were multiple attempts to reduce military spending.  It as a rule goes down during dfl administrations and up during gop ones.  Pretty reliably.  What is interesting is the current administration is reducing presence but not reducing spending.  Spending went up.  Getting less for more. 

[thechinchinsong]

6 hours ago, Bombastinator said:

well.. 70-40 years ago anyway.  After that it’s been more of a “policemen” thing.  Drug runners and pirates and stuff.  There were multiple attempts to reduce military spending.  It as a rule goes down during dfl administrations and up during gop ones.  Pretty reliably.  What is interesting is the current administration is reducing presence but not reducing spending.  Spending went up.  Getting less for more. 

Yeah, I'm just interested in how much other nations are going to develop their navies to fill in where the US might pull out of. The US has been suffering from a military industrial complex for decades, but you can't deny that US presence basically reduced military demands for many nations even nominally aligned with the US.

[Bombastinator]

36 minutes ago, thechinchinsong said:

Yeah, I'm just interested in how much other nations are going to develop their navies to fill in where the US might pull out of. The US has been suffering from a military industrial complex for decades, but you can't deny that US presence basically reduced military demands for many nations even nominally aligned with the US.

Did.  There were bitter complaints.
 

reminicing about being a child in the Cold War in the Midwest 

Spoiler

The whole German “you keep the nukes protecting us in your back yard” thing was particularly offensive.  I grew up in North Dakota.  There were nukes at the local airport. Big red circles on the tarmac with b1s in them, and if you stepped in the red circle they shot you. No questions, just bang you’re dead.   I remember waking up one morning to a red sun. Whole bedroom was glowing orange.  Common enough occurrence.  Dust in the air.  I thought the local airport had been hit and I sat there hyperventilating in bed stumbling over “the Lord’s Prayer” waiting for the blast wave to hit and blow my house away like matchsticks. A 12 year old waiting to die.  In a nuclear war everywhere is the front line and the only difference. Between the front and the rear most echelon is you get to die more horribly in the back.

 

[Joduko]

On 8/23/2020 at 7:11 PM, lakonic said:

 

Why is this even an issue? The rest of the world doesn't revolve around the US. ? 

[Bombastinator]

19 minutes ago, Damprol said:

Lenin maybe not the most trustable source.  He was despised by a lot of the more erudite marxists.  Marxism is famously flawed in that it’s proposed solutions to the problems of capitalism rather famously didn’t work well.  His descriptions of those problems can be worth looking at though. It’s much easier to describe a problem than it is to solve it after all.  Some pretty good and very different solutions were proposed by FDR.  They’ve all been pretty much tossed aside in the name of convenience though. 

[thorhammerz]

8 hours ago, thechinchinsong said:

I'm curious to see how a waning US interest in global trade will impact the foreign and military policy of other countries.

Each major power will begin looking after their own interests once again. Many are either out-of-shape (Turkey / Germany), out-of-breath (Great Britain), out-of-people (Russia / soon-to-be-Germany), or some combination of the above. Which is to say, the next conventional hot war is likely to be limited to "only" Eastern Europe / Middle East / East Asia (which in itself will be pretty bad, considering a cut of some 10-20 mbpd oil would result in countries having their lights turned off, or at worst consigning their people to starvation).

Quote

You can already see this with how much China is investing in their Navy, as they know that a powerful navy is needed to conduct the trade that they so dependent on.

Best of luck to them - the great thing about having a long-range navy (e.g. Japan's) is that you can cut off an enemy's supply routes from half-way around the world. If China thinks they can "print" maritime tradition into existence (a process that typically takes upwards of a century), they're going to see a lot of their toys at the bottom of the ocean (or more likely, at the bottom of their port harbours). The Chinese boast about their Area-of-Denial zone stretching out from the Chinese coast... what many forget is that you don't need to place anything remotely near said coast to disrupt their supply lines to Europe / ME / Africa (most of their oil is transported by oil tanker... those Eurasian rail lines are indisputably ambitious, but they can neither run on fumes, nor can they replace the gargantuan tonnages cargo ships bring in any meaningful degree). 

 

8 hours ago, Bombastinator said:

After that it’s been more of a “policemen” thing.  Drug runners and pirates and stuff.

The ironic part is that the American navy is no longer even properly equipped for sea-lane control beyond operations in the Caribbean / Gulf of Mexico (super-carrier formations typically being "smash something really really far away, really really hard and GTFO the next day"). 

[Bombastinator]

3 minutes ago, thorhammerz said:

Each major power will begin looking after their own interests once again. Many are either out-of-shape (Turkey / Germany), out-of-breath (Great Britain), out-of-people (Russia / soon-to-be-Germany), or some combination of the above. Which is to say, the next conventional hot war is likely to be limited to "only" Eastern Europe / Middle East / East Asia (which in itself will be pretty bad, considering a cut of some 10-20 mbpd oil would result in countries having their lights turned off, or at worst consigning their people to starvation).

Best of luck to them - the great thing about having a long-range navy (e.g. Japan's) is that you can cut off an enemy's supply routes from half-way around the world. If China thinks they can "print" maritime tradition into existence (a process that typically takes upwards of a century), they're going to see a lot of their toys at the bottom of the ocean (or more likely, at the bottom of their port harbours). The Chinese boast about their Area-of-Denial zone stretching out from the Chinese coast... what many forget is that you don't need to place anything remotely near said coast to disrupt their supply lines to Europe / ME / Africa (most of their oil is transported by oil tanker... those Eurasian rail lines are indisputably ambitious, but they can neither run on fumes, nor can they replace the gargantuan tonnages cargo ships bring in any meaningful degree). 

 

The ironic part is that the American navy is no longer even properly equipped for sea-lane control beyond operations in the Caribbean / Gulf of Mexico (super-carrier formations typically being "smash something really really far away, really really hard and GTFO the next day"). 

China had a serious maritime tradition once. It was killed completely and would have to be rebuilt though.  It predates European maritime tradition and included some really impressive brown water stuff.   I doubt China is seriously interested in trade routes.  Their thing has always been “we got everything we need, go fuck yourselves” which was actually more or less true.   They did stake out way more than their share of the South China Sea and that’s probably the only area they’re interested in. 

[thorhammerz]

9 minutes ago, Bombastinator said:

China had a serious maritime tradition once. It was killed completely and would have to be rebuilt though.  It predates European maritime tradition and included some really impressive brown water stuff.

Yep yep (well, assuming we're ignoring the Venetians, who for a city state did quite well for itself, before they started burdening themselves with mainland European issues).

Quote

 I doubt China is seriously interested in trade routes.

Their efforts (however effective, or more likely futile) on their string-of-pearls (I think it was called?) project indicates otherwise. After all, if they wanted a "wider" funnel with which to export their surplus production (arguably the entire basis of their BRI project), they might as well just pave over every square foot of Mongolia in concrete .

Quote

Their thing has always been “we got everything we need, go fuck yourselves” which was actually more or less true.

They say one thing, and they do quite another. Flying pigs over by air from Europe was quite amusing.

Quote

They did stake out way more than their share of the South China Sea and that’s probably the only area they’re interested in. 

South-China-Sea is merely step 0.5 (not even step 1...) if they want trade route security. They would outright need to secure ports in either the Philippines or Vietnam (heh, good luck convincing the Vietnamese of that) to properly project power out to the Strait of Malacca.

[mr moose]

Foxconn don't want to lose apple as their client and apple don't want to piss of the US government.

 

If TMSC is willing to ditch 20% of it's sales (regardless if they have other customers to fill the void or not) in order to appease the US you know its a big deal.

 

 

 

 

[Bombastinator]

Re: venetians

nope.  Before even them. Perhaps later than the Vikings. Not sure though.  Might have been concurrent or even predate them.  They found chinese stone anchors off the coast of California and dated em.  Not sure if they were AD or BC.

 

re: pigs

yeah they buy a lot of American soya beans too.  I did say “was”.

 

re: paving

you do realize Mongolia is bigger than any European country and it’s one of their more out-of-the-way provinces.  China is not small.  It’s like North Dakota on a hill except it’s a lot bigger.  They grow a lot of Durham wheat, sugar beets, and sunflowers in North Dakota.

 

re: south China sea

why would they bother?  The attitude has been “drop on by and we’ll decide if we want any.”  China does have an issue in that a lot of farming there is medieval era subsistence stuff. Rice paddies with water buffalo and wooden hand tools fergawdsake.  They want to fix that they can. They could throw up a tractor factory pretty quick. 
 

There’s this great worry that China will cut off Taiwan. What people don’t understand is Taiwan is basically a big rock. There isn’t much IN Taiwan except Chinese people and a bit of coal, and China has more than it really wants of both.  This was the whole thing behind the Nixon two chinas thing.  The only reason China wants Taiwan is because factories and tech, which they would lose anyway if they invaded. Meanwhile it’s becoming pretty clear that they can make factories and tech for themselves. That China would discover that Taiwan is what it always was before the revolution: a backwater with no real value.   Taiwan begging to become part of mainland China and China being kind of “meh” about it is a foregone conclusion that just hasn’t happened yet. 

Edited August 25, 2020 by Bombastinator