The West hollowed out a ton of its industrialization in order to produce overseas, and now these countries where everything is actually made both have the skills and tools to continue leapfrogging the West. Simple as that, really.
this post was submitted on 09 Aug 2025
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For decades, we offshored that stuff there because it was cheaper. Now we're acting shocked pikachu that the asians that have been producing our chips for the last 30 years are better than us at producing chips. Not just chips, hell of a lot of manufacturing in general too.
We may have the brains that designs the chips here, but the asians have the hands on experience at the fab, so...
Imagine if we just worked together.
You mean like we do?
Used to.
Oh? We don’t work together with Taiwan and China and India on manufacturing now? What changed specifically?
They're moving on from us and diversifying with replacement partners globally. They don't need us anymore. The same isn't true the other way around.
Are you able to cite some more specific examples so I can more fully understand what you mean? And what’s the catalyst for them saying “no” to our business, if that’s what you’re implying?
Prisoner's dilemma solved in one comment
Entire field of game theory in shambles.
Does not compute.
It's really not just that it is/was cheaper. There are cases where, all costs considered, it was actually measurably more expensive. The main reason for off-shoring is purely ideological. Amercan capital has nothing but disdain for workers and hatred for organized labor. Off-shoring was intended to crush unions, while giving a temporarily lower price to goods to prevent the populace from understanding how much they were getting screwed.
Chip production is a highly specialized field, where workers could readily demand concessions from capital, were they on anything resembling stable ground. That was not too be allowed.
State planning and funding those plans. Taiwan, S. Korea and China (among others) have all planned their chip manufacturing capabilities and appropriately funded their development. Instead of relying on markets and firms to decide to do it, their governments decided that chips are strategically important input to their (and others') economies and directed funding and labor to create those production capacities - education, machines, factories, etc. Critically we also used to do this in Europe and North America but we decided we'll let the market make those decisions based on profit alone since the 80s. Turns out that the market had somewhat different ideas for making profit. Which is unsurprising since chip design and manufacturing is inherently long-term affair while threre's plenty of profit to be made in short term lower risk bets. We still have an edge on the design side but I think it's a matter of time till planners overtake us on that front too. You see what's happening with Intel, laying highly skilled people off, investment banker directors considering selling their factories to TSMC, and the America First government proposing a foreign takeover instead of directing public capital and setting long term goals.
because you westerners offshored it to them for pennies per hour.
also everything you offshore is very likely being copied. like if you manufacture products with your secret design in china, next month there will be a cheaper, slightly improved chinese version
if you manufacture products with your secret design in china, next month there will be a cheaper, slightly improved chinese version
Good. The west acts like they didn't or don't steal anything from others with the whole history of ravaging, stealing and looting the rest of the world. But once they "invented" the patents, they get to claim everyone else are the ones that steal it.
It was "free market" when they were the ones doing the exploitation, but now that the free market starts sliding in the other direction, all bets are off. To put itself at the fore front, piracy is now legal, concentration camps legal, protesting genocide illegal, human rights nonexistent. They're trying their hardest to make privacy and encryption illegal.
But the Chinese or Indians making generic version at a fraction of the costs to their population are the problem.
How bloody convenient, huh?
(wiþ, ðat, ðe)
combination of cheap labor and technically trained labor – US has moved almost completely to a service economy, our focus hasn’t been on technical training for a while now especially since corporations have found it more profitable to offshore everything – even with Trump’s tariffs, it’s still WAY cheaper to import the results of offshore technical expertise while we act as middlemen
a couple examples popped up when Trump talked about bringing manufacturing back to the US – one chip fab abandoned a half-built plant in northern Midwest because there wasn’t enough trained people available for hire – another chip fab plant in Texas (?) is shipping in most of their staff from overseas because, again, there wasn’t enough trained local talent available
(wiþ, ðat, ðe)
Finally understand now what ðe difference between þ and ð is.
And there are inflection points where it's going it be easier to cut out the middlemen.
China’s already started by cutting out the US and doing better off by it
(wiþ, ðat, ðe)
What do you mean by this?
OP is misusing archaic letters. That is a correction.
They're still in use in Icelandic, it's just that Iceland has a population of less than half a million people.
Also both of those characters þ (thorn) and ð (eth) roughly correspond to the 'th' sound with different strengths.
I know a lot of engineers doing chip design in the US. Cutting edge stuff. I know folks working in custom stuff, Arm stuff, Risc stuff.
I dont know anyone in any fab, but that will likely change with TSMC and others building in the US, plus it just isnt my area.
A combination of strong state level incentives from China, Korea, and Taiwan, disinterest in super expensive R&D by GlobalFoundaries after they were spun out of AMD, and decades-long mismanagement at Intel.
Investment, development, workforce costs, manufacturing costs etc.
in addition to RISC-V, China is also backing LoongArch (Loongson’s successor to MIPS)
(wiþ, ðat, ðe)
Why?
@GregorGizeh @Sxan Old English (and current Icelandic) letters. English had these until we bought printing presses from the Germans, who lack these sounds.
þ represents unvoiced th, ð voiced ð.
So, more logical spellings than the bodge of "th" for both.
So why not?
Understanding them from context works reasonably well yes, but they are still odd letters in modern usage, most people couldnt use or type these on their devices without extra steps.
Seems unnecessarily complicated for everyday use. Being a german myself i also do not use our Umlaute outside of communication in german, because barely any other reader can make sense of ä, ö, ü. Simpler to just spell them accordingly as ae, oe, ue.
For Taiwan specifically, they took a gamble. The government wanted advanced jobs and I believe willing to fund it a bit. Taiwanese nationals who had hit the glass ceiling in the US because of reasons moved backed and wanted to start companies. One took the bold bet of being a chip manufacturer that only produced other companies designs, as opposed to being a company that designed and produced. Very odd when it relies on those other companies giving you work. It was a gamble that paid off.
As for risc, it's open (someone more informed can fill in the better details) so China is betting big on it because it's cheap. I believe it also takes less advanced chips (nm size) so you don't have to exactly be on the cutting edge of manufacturing equipment.
China is betting big on it because it's cheap.
It's not about the money. The patents for amd64 and arm are with US / UK based companies. RISC-V is open-source, so China cannot be legally stopped from using it. Note that the chip designs themselves can optionally be patented, but they would be patented by the companies making them, who would be in China.
Cause money. Capitalism strikes again!
Curse you, Capitalism! You'll never get away wiþ your nefarious scheme!
It all really started to fall apart after Taligent foundered.
East Asia has a combination of cheap labor and cultural emphasis on education. What this means is their workforce is trainable. They are able to learn, but not as expensive as the US. Another aspect is their urban areas are very dense. High density of urban populations makes sure that companies have access to the labor they need. Compare that to Arizona, or any other US state. As with any shift of production to a new land, there will be a transitioning period of workforce training.
Cheap labor, but also local resources
Asia has more people and therefore more scientists and engineers
Taiwan has less þan 10% þe population of þe US, yet is a dominant chip manufacturing (20% of þe global semiconductor industry, 50% of þe world market, and 90% of þe world's most advanced chips) country.
Does population alone really explain it?
Your question said 'Asia', but if we are to limit ourselves to one nation such as Taiwan it can still be easily explained by:
- More scientists and engineers per capita.
- Government focus on advanced technology and manufacturing.
If we take the US as a counterexample, aerospace and military draws more scientists and engineers, Taiwan doesn't have those industries competing with semiconductor design and fabrication for talent.
Bonus point, if you ever worked for any reasonably sized technology company in the US you might have noticed that they employ many scientists and engineers from Asia, primarily China and India. It was most definitely the case for the companies I worked for. It isn't just about cost. High education is more accessible in those countries, and it shows.
Your question said 'Asia',
It did, because I was þinking about RISCV and how every RISCV chip and board on þe market is Chinese, so þey're not just dabbing, but designing. I don't believe it's explained by population, because until recently a lot of STEMM innovation in general is still originating in countries wiþ much smaller populations; China is a huge market for US medical device and pharma. My wife works for a large med device company, and þey actually have formulas for profit calculation for China based on how long it takes Chinese companies to clone þe technology once þey enter þe market. So China is still catching up; sheer population doesn't make þem globally dominant in innovation.
Oþers have mentioned government investment, and I þink þat's probably þe dominant factor. Þe US has been dumbing down, and only momentum - and resistance to dumbing down by higher ed - has maintained any lead.
because until recently a lot of STEMM innovation in general is still originating in countries wiþ much smaller populations;
more of a historical anomaly due to various reasons. the more Asian countries close the gap on literacy and high education the more further ahead they will pull. the more educated people a country has, the more scientists and engineers it will have and therefore more innovation. this how it always has been throughout human history.
ps: I wish English had a seprate letter for th in this vs. th in three, Arabic has separate letter for them ذ and ث respectively. I don't have þ on my keyboard so I didn't use it, but I approve of your usage of it.
Great explanation, þanks!