Comments by "Louis Giokas" (@louisgiokas2206) on "China Will Soon Lose the Title of "World's Manufacturer" || Peter Zeihan" video.

  1. I have witnessed the rise of the semiconductor foundry business since the beginning. As the cost of making semiconductors rises with ever finer lithography it made sense to pay someone else to build the factory and make the chips. Modern high end semiconductor plants can cost upwards of $10B. That is the repetitive, high-volume part of the process. It is also not sensitive to the design or eventual use of the devices. Those are the high value parts of the business. A good example of this is the automotive industry. For example, in the very early days Ford (while Henry Ford was running it) basically received all the raw materials into their factories and made everything themselves. I am talking about receiving coal, iron ore (or perhaps pig iron) and even rubber. Henry Ford at one time even tried to make rubber production more efficient by creating rubber plantations using modern agricultural techniques. He failed, by the way. Over time it became more efficient to buy steel and tires and glass from others, who could make the same for lots of companies and thus gain advantage from scale. There is nothing magic about the foundry itself. It is the machines in the foundry and the designs that make it what it is.
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  2. We are already seeing the shift in the US as far as the labor force is concerned. A lot of that has to do with our experience with the massive move to higher education. What studies have found is that at least 50% of college grads are in jobs that do not require their degree. We also have the problem that many of the degrees people are getting are basically useless. By the way, the Chinese are finding exactly the same thing. It is worse in China. What Peter leaves out is automation. Just an example is a company that makes pens and rubber products. They moved the pen manufacturing to the US and built an automated plant. I even have some battery powered lawn tools that are made by a Chinese company. The majority are made in Vietnam, and when I looked up the company, I found that they have opened a plant in the US. It is their most modern and automated.
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