Categorized | Technology, Trade

Optical Manufacturing in the US


Reposted from Jeff Ferry’s blog: Thoughts on marketing, economics, & technology

My article Global Optical Manufacturing Rebalances is now out in this month’s OPN Magazine. (The full report is here.)

Global Optical Manufacturing Rebalances looks at the migration of virtually the whole of US optical component manufacture to Asia in the last ten years, and the recent steps by a few companies to bring some manufacturing back to the US. But it’s still only small moves back. And meanwhile, R&D activities are moving to Asia, not a good sign for the health of the US industry.

At the OFC show this week, I visited companies from Germany and Sweden that are growing and keeping their manufacturing at home. Why? Well, for them high labor costs don’t matter much because labor cost is a very small part of the total cost of making components. And higher production costs are outweighed by the advantages of having the product engineering and manufacturing capability co-located.  One executive at a larger US components company told me: “In the US, we are driven by Wall Street and once anything reaches significant volume of production, everybody’s first thought is to move it to Asia. Until the industry reaches strong, sustainable levels of profitability, that will continue to be the norm.”

Meanwhile, Asian manufacturers continue to export low profit margins, backed up by government support.

The US industry needs a new approach to the problem. More to come on this in the future….



One Response to “Optical Manufacturing in the US”

  1. Mo says:

    Countries in Asia create money out of thin air to back their manufacturers while the US prints new money out of thin air to fund things like outsourcing and derivative bets.

    Every state in the US should follow North Dakota’s lead and have their own state banks. North Dakota takes funds collected in taxes and deposits them in their own bank where they can make loans and create credit to fund industrial activity. Instead of states keeping their money in banks that make loans to faciliate outsourcing; state banks could be used to fund real economic activity within the state, region, county, etc.


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