US President Barack Obama visited Intel’s factory in Hillsboro, Oregon in February. On the same day, he announced the nomination of Intel CEO Paul Otellini into the President’s Employment and Competitiveness Committee, and Intel announced 5 billion. USD new plant investment plan. The close contact and tacit interaction between the president and the chip giant make people think about it. What kind of policy tendency and industrial logic behind the “core government†is implied?
The president's troubles If you look at Obama's speech to the public on a weekday, you will find that "Jobs" is one of the most frequent words. Do not think that he is proud of Jobs. He is talking about Americans’ current concern: employment. After the financial crisis, although the US economy has gradually stabilized, the unemployment rate has remained high. It has been around 10% for a long time, and it has improved slightly recently, but it has remained at a high of 8.8%. Obviously, the American public is not satisfied with this. The online video titled "HopeisNotHiring!" has mocked Obama. This undoubtedly puts great pressure on Obama who will run for reelection next year.
In order to solve the employment problem, Obama almost tried his best and Intel's trip demonstrated his efforts in the high-tech industry. In the high-tech industry, chip manufacturing has become a key point, and Otellini has been invited to the president’s employment think tank. What makes Obama happy is that Intel will send a big gift in time. A new $5 billion factory will bring 4,000 jobs to the United States. In October last year, Intel announced that it would invest $6 billion to $8 billion in factories in Arizona and Oregon, creating a total of more than 8,000 jobs. As an industry leader, Intel has become a role model in creating jobs.
Industry's Appeal The president needs the industry to solve the urgent need, and the industry also wants to get the care of the government. Just a month before Obama’s visit to Intel, the press release issued by the Semiconductor Industry Association (SIA), the endorsement organization for the US semiconductor industry, emphasized the importance of the chip industry to the U.S. economic strategy and raised the demand of the chip industry for the government. Increase investment in basic R&D funds, avoid harsh environmental regulations, extend tax incentives, reform export control policies, encourage exporters, and support the introduction of talent.
These appeals cover almost every aspect that the policy can take care of. The craving for such policies may be interpreted as the challenges faced by the US chip industry, especially the chip manufacturing industry. In the past ten years, the share of US chip production in global total capacity has been declining. In 2000, the U.S. share was nearly 30%. According to the latest statistics of SEMI, it accounted for only 14.5% in 2010, and the share of advanced process capacity also showed a downward trend. In this situation, the industry thought of turning to the government. Last year, a message that was not widely considered was intriguing. The SIA headquarters moved from Silicon Valley to Washington, and the president was replaced by an industry lobbyist.
The “premium†manufacturing industry presidents who stay in the future hope that the chip industry will create jobs, while the industry hopes to regain its advantages under the support of the government. Looking back at the past decade, it has become commonplace for manufacturing industries to shift to lower-cost regions. Why does the United States have a soft spot for the chip manufacturing industry and love it?
Analysis of the characteristics of the chip manufacturing industry can be found out that it is different from the traditional manufacturing "quality" manufacturing. Traditional manufacturing is labor-intensive, has low technological content, and has low added value. The chip manufacturing industry has a high technical threshold and huge investment, which is intellectually intensive and capital-intensive. For industries, the added value obtained is very high and profits can be guaranteed. For the government, huge investments can boost the economy and employment. Although the price of local labor is relatively high, the labor cost of the industry's cost structure is not dominant, so industrial profits will not be affected much. Faced with such a "premium" manufacturing industry and the win-win situation created by it, the President and the industry made a tacit agreement to choose to stay. It can be predicted that for a long time to come, the newly-found fabs of American chip manufacturers will tend to be located in the United States.
In fact, traditional manufacturing industries are experiencing subtle changes. With rising labor costs in developing countries and rising logistics and transportation costs, manufacturing leaders in developed countries are considering redeployment. According to a report released by consulting firm Accenture, most US manufacturing owners are considering moving their factories away from Asia.
The “high-quality†manufacturing industry has chosen to remain, traditional manufacturing industries are brewing back, and economic globalization seems to have reversed.
The world is flat?
In 2005, the American American Thomas Friedman wrote "The world is flat." He believes that with the help of the Internet and other technologies, the world has become a flat arena, and economic activities have been carried out across the globe. The view of this book was really exciting in the context of the industrial transfer at that time. Many people began to believe in and devote themselves to the "flat world." They may not have imagined that globalization will reverse in just a few years.
From the point of view of information transmission, the world has become unobstructed, and it is indeed flattened and is becoming more and more flat. This kind of flattening has greatly promoted the development of globalization. But is this the root cause of economic globalization? Thomas has cited countless cases of global division of labor in the book. The vast majority of these cases have one thing in common: Some industries or industries shift to areas with low labor costs. In other words, the basic driving factor in the development of globalization in the past decade is the difference in labor costs. From this point of view, the fundamental reason for globalization is that “the world is uneven.†It is the inequality in the cost of labor that drives the flow of capital, just as water flows from high-lying areas to low-lying areas. This situation is unsustainable. The economic development in low-cost regions has gradually raised the price of labor, and the labor cost differential has gradually narrowed. When the manpower cost is not enough to offset the cost of circulation, this flow naturally ceases. In addition, the internal problems caused by the capital and industrial output of developed countries will also force policy makers to make some interventions to protect the industry and encourage backflow.
Globalization is undoubtedly the major trend of world economic development. However, the model driven by differences in human cost in the past is no longer effective. Globalization for sustainable development requires a new and longer-lasting new order. In this regard, global industries, including the chip industry, need to think. Now if you hear the following conversation, you don't have to be surprised. "Hey, Thomas, is the world flat?" "Um... We may need a new word. Let me think about it again, Mr. President."
The president's troubles If you look at Obama's speech to the public on a weekday, you will find that "Jobs" is one of the most frequent words. Do not think that he is proud of Jobs. He is talking about Americans’ current concern: employment. After the financial crisis, although the US economy has gradually stabilized, the unemployment rate has remained high. It has been around 10% for a long time, and it has improved slightly recently, but it has remained at a high of 8.8%. Obviously, the American public is not satisfied with this. The online video titled "HopeisNotHiring!" has mocked Obama. This undoubtedly puts great pressure on Obama who will run for reelection next year.
In order to solve the employment problem, Obama almost tried his best and Intel's trip demonstrated his efforts in the high-tech industry. In the high-tech industry, chip manufacturing has become a key point, and Otellini has been invited to the president’s employment think tank. What makes Obama happy is that Intel will send a big gift in time. A new $5 billion factory will bring 4,000 jobs to the United States. In October last year, Intel announced that it would invest $6 billion to $8 billion in factories in Arizona and Oregon, creating a total of more than 8,000 jobs. As an industry leader, Intel has become a role model in creating jobs.
Industry's Appeal The president needs the industry to solve the urgent need, and the industry also wants to get the care of the government. Just a month before Obama’s visit to Intel, the press release issued by the Semiconductor Industry Association (SIA), the endorsement organization for the US semiconductor industry, emphasized the importance of the chip industry to the U.S. economic strategy and raised the demand of the chip industry for the government. Increase investment in basic R&D funds, avoid harsh environmental regulations, extend tax incentives, reform export control policies, encourage exporters, and support the introduction of talent.
These appeals cover almost every aspect that the policy can take care of. The craving for such policies may be interpreted as the challenges faced by the US chip industry, especially the chip manufacturing industry. In the past ten years, the share of US chip production in global total capacity has been declining. In 2000, the U.S. share was nearly 30%. According to the latest statistics of SEMI, it accounted for only 14.5% in 2010, and the share of advanced process capacity also showed a downward trend. In this situation, the industry thought of turning to the government. Last year, a message that was not widely considered was intriguing. The SIA headquarters moved from Silicon Valley to Washington, and the president was replaced by an industry lobbyist.
The “premium†manufacturing industry presidents who stay in the future hope that the chip industry will create jobs, while the industry hopes to regain its advantages under the support of the government. Looking back at the past decade, it has become commonplace for manufacturing industries to shift to lower-cost regions. Why does the United States have a soft spot for the chip manufacturing industry and love it?
Analysis of the characteristics of the chip manufacturing industry can be found out that it is different from the traditional manufacturing "quality" manufacturing. Traditional manufacturing is labor-intensive, has low technological content, and has low added value. The chip manufacturing industry has a high technical threshold and huge investment, which is intellectually intensive and capital-intensive. For industries, the added value obtained is very high and profits can be guaranteed. For the government, huge investments can boost the economy and employment. Although the price of local labor is relatively high, the labor cost of the industry's cost structure is not dominant, so industrial profits will not be affected much. Faced with such a "premium" manufacturing industry and the win-win situation created by it, the President and the industry made a tacit agreement to choose to stay. It can be predicted that for a long time to come, the newly-found fabs of American chip manufacturers will tend to be located in the United States.
In fact, traditional manufacturing industries are experiencing subtle changes. With rising labor costs in developing countries and rising logistics and transportation costs, manufacturing leaders in developed countries are considering redeployment. According to a report released by consulting firm Accenture, most US manufacturing owners are considering moving their factories away from Asia.
The “high-quality†manufacturing industry has chosen to remain, traditional manufacturing industries are brewing back, and economic globalization seems to have reversed.
The world is flat?
In 2005, the American American Thomas Friedman wrote "The world is flat." He believes that with the help of the Internet and other technologies, the world has become a flat arena, and economic activities have been carried out across the globe. The view of this book was really exciting in the context of the industrial transfer at that time. Many people began to believe in and devote themselves to the "flat world." They may not have imagined that globalization will reverse in just a few years.
From the point of view of information transmission, the world has become unobstructed, and it is indeed flattened and is becoming more and more flat. This kind of flattening has greatly promoted the development of globalization. But is this the root cause of economic globalization? Thomas has cited countless cases of global division of labor in the book. The vast majority of these cases have one thing in common: Some industries or industries shift to areas with low labor costs. In other words, the basic driving factor in the development of globalization in the past decade is the difference in labor costs. From this point of view, the fundamental reason for globalization is that “the world is uneven.†It is the inequality in the cost of labor that drives the flow of capital, just as water flows from high-lying areas to low-lying areas. This situation is unsustainable. The economic development in low-cost regions has gradually raised the price of labor, and the labor cost differential has gradually narrowed. When the manpower cost is not enough to offset the cost of circulation, this flow naturally ceases. In addition, the internal problems caused by the capital and industrial output of developed countries will also force policy makers to make some interventions to protect the industry and encourage backflow.
Globalization is undoubtedly the major trend of world economic development. However, the model driven by differences in human cost in the past is no longer effective. Globalization for sustainable development requires a new and longer-lasting new order. In this regard, global industries, including the chip industry, need to think. Now if you hear the following conversation, you don't have to be surprised. "Hey, Thomas, is the world flat?" "Um... We may need a new word. Let me think about it again, Mr. President."
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