The American Crisis: How can a country that doesn’t make bullets be safe?

Did you know that in a technology driven economy and military semiconductors are the “bullets” you fight an enemy with?

But the number of semiconductor bullets we manufacture in the United States continues to decline in relation to our needs.  In 2015, we imported  over $42 billion worth of semiconductors.

• Semiconductors U.S. imports 2002 2015 Statistic

In the eyes of a short sighted globalist the United States is not a desirable place to build a new semiconductor wafer fabrication (fab) plant. Such plants are massive, costing upwards of $8 billion and generating thousands of direct and indirect high-paying jobs, spinoff revenue for local communities and massive investments in research, equipment and materials.

Semiconductors sit at the top of the electronics industry pyramid. The United States invented the technology, but it’s become a small player as measured by global production.

In 2009, 16 fabs began construction throughout the world. One of them was in the United States, according to Daniel Tracy, senior director of industry research and statistics at Semiconductor Equipment Materials International. Seven of the fabs that began construction will produce light-emitting diodes, one of the most promising energy-saving technologies developed in 50 years. None of those fabs will be in the United States.

The only semiconductor fabrication plant that started construction last year in the United States is in Saratoga County, N.Y., a Global Foundries facility that will produce 40,000, 300-mm wafers per month (at 28 nanometers and below).

China led the world last year in new semiconductor factory construction, with six fabs, followed by Taiwan with five, and Korea, Japan, the European Union and Southeast Asia, all with one apiece.

As of 2009, the percentage of global semiconductor production capacity located in the United States was 14 percent, down from 25 percent in 2005 and 17 percent in 2007. Japan has the highest share of global capacity (at 25 percent), followed by Taiwan (18 percent, up from 11 percent in 2001), Korea (17 percent, up from 11 percent in 2001), Europe and the Middle East (11 percent), China (9 percent, up from 2 percent in 2001) and Southeast Asia (6 percent).

The United States does lead the world in one category, however: closures. In 2009, 27 fabs closed worldwide, with 15 of them in the United States (followed by four in Europe, four in Japan, two in China, one in Korea and one in Southeast Asia).

The number of closures last year almost doubled from the previous year, when 15 fabs were shut down worldwide, again, with the largest number in the United States (at four).

Our Eyes in the Sky are Owned by China

American dependence on China grows by the day. The latest news is that the United States has been reduced to leasing a Chinese satellite to handle communications with U.S. military bases in Africa. Surprising, isn’t it?

The nation that launched the world’s first communications satellite (I remember it well – it was called Telstar) has so lost its manufacturing mojo that it has to rely on its most formidable military adversary to provide the hardware for some of its most sensitive communications. This at a time when underlying unemployment rates among U.S. manufacturing workers remain at near-depression levels.

For those who have been keeping score, this is all part of an epochal pattern in which the manufacturing capabilities of even such ostensibly strong American companies as Apple AAPL and Boeing BA have become deeply hollowed out (with dire long-term implications not only for the companies concerned but for American living standards).

For more than half a century now, virtually every competent nation in the world has been extracting vital production technologies out of the United States. The American establishment’s attitude – lubricated by campaign contributions, consultancy fees, university chair endowments, think-tank subventions, and speakers’ honoraria – has been, “Come and get it.”

China has been a latecomer to the party but has been making up for lost time. First it offered itself as a low-wage location for labor-intensive manufacturing. Then it began to squeeze corporate America to transfer ever more advanced production processes and know how.

 

 

 

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