The Asian Invasion

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skeptic 12/5/2012 | 12:34:51 AM

re: The Asian Invasion
But has it really been worth it for component vendors to make the move East? So far, it looks as if the jury's out.
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The component vendors don't really have a choice.
They have to move production to the lowest cost
places or they will be wiped out.

Its not typically going to improve their
financial situation in the long run. In fact,
the constant downward pressure on prices is
destroying the fundementals of the business.
The volumes on many of these things are not
sensitive to price.

The odd thing is that the flight to china/asia
is creating a bubble of sorts because its allowing
the companies to avoid a necessary
and painful downsizing of the component space at
least for a while.
There are way too many people in the space for
the amount of business thats available. If you
move the business to asia, it doesn't change
that.

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Xiang_Qi 12/5/2012 | 12:34:49 AM

re: The Asian Invasion From what I see, it is not an Asian Invasion but an Asian Assimilation. Asia has half the world's population, has the fastest growing economies, turns out more optics engineers than anywhere else in the world, and is redefining communications services and how they are used. LightReading: where is your Chinese language addition?

That said, innovation and entrepreneurship can only happen in open societies. China and Vietnam - both communist in policy - in practice have the most dynamic market economies in the world. As NAM/EUR fasten on increasingly restrictive measures in light of post 9/11, Asia might even spur on a renaissance of the Tang or Ming eras.

As far as DowsLake goes, they don't have the critical mass for any survivor to trust them with volume purchases and the technology does not seem to be cutting edge. Their best bet is to hunker down, ride out the depression, and come out with something new in 2004.

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B2Itried 12/5/2012 | 12:34:48 AM

re: The Asian Invasion Hey they do it for clothes manufacturing why not optics.....

Hope something small like a war in these countries does't affect your ol' mighty stock exchange losses (oh you didnt think of the risk of war in these hick towns).

Hope the shareholders get there buck because after the sweatshops (and poorer quality products) what have you left... nothing next thing you will find it at your local electonics shop (wait for the "knock offs" just like bay blades).

B2

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OptixCal 12/5/2012 | 12:34:46 AM

re: The Asian Invasion I'm interested in why you believe DowsLake doesn't seem ot have the cutting edge technology? The products on their site SEEM to be on the cutting edge...at least to me. As for the critical mass comment...I'm not sure ANYONE in this current telecom winter has any critical mass. Just a comment from an interested on-looker.

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zettabit 12/5/2012 | 12:34:44 AM

re: The Asian Invasion If one looks at the skill set and resources required in the optical space, one sees that:

- some of the best software engineers come from Indian universities. Until recently many were working under H-1 visas in CA. Otherwise that skill set costs $30,000/yr in India. Long-term there is no reason that prevents India from becoming a premier s/w development center.

- optical component assembly & testing requires qualified engineers and technical workers - not PhD's. Chinese universities groom thousands of qualified optical engineers (again, until recently many were getting hired in the USA under H-1s). So there is no reason why optical assembly and testing cannot be done at significantly lower cost in China.

Over time, the same arguments can apply to hardware & system engineering, ASIC design, etc....

It will thus become harder and harder for the USA to use technical expertise as the means of maintaining a competitive advantage. Thus the real competitive advantage for the USA will be innovation - developing new and better ways to do things - combined with the financial system to fund new innovation, and finally a social-cultural-economic environment that attracts the best and brightest to our lands, instead of staying in theirs.

The "glass half full" view says that the unique university, work force, VC, and corporate cultures that enable still exist and thrive in the US and Canada in places like Silicon Valley, San Diego, Boston, Ottawa.

The "glass half empty" view notes that key industry leaders such as Vinod Khosla, Jayshree Ullal, the ASIC team at Cerent, and many others are not American, and are all here based on the PAST opportunities. In the future, why couldn't innovation leadership also come from Asia?

Compounding the threat is the USA's new-found xenophobia about anything foreign, combined with its serious image problem in much of the world. Are the world's best & brightest still seeing AMerica as the place to be?

If George Bush is meant to be the shining example of what the American educational system can produce, I shudder to think of what the future brings.

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Fortunecookie 12/5/2012 | 12:34:43 AM

re: The Asian Invasion You forgot to mention almost every Engineering school (including Math, Applied Math., Physics, Applied Physics, Astronomy, Chemistry, etc) in any U.S. university is filled at least half India and Chinese students.

That's probably not too surprising to most people here. The recent trend is that more and more Chinese and Indians landed faculty positions after they got the education in the U.S.. Go to universities's homepage and you will find it out.

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st0 12/5/2012 | 12:34:38 AM

re: The Asian Invasion (1) USA can compete if the corp can put their act together to concentrate on R&D before it is too late. We are still the one with most of Nobel price winners. It need to compete at top level (top invention level due to the strong fundamental technical background).

(2) some of the university got change of face after Telecom bubble. Many staffed earlier, got the two kinds of people:
(a) late bubble stage, few guys do not want to go for industry... (direct grad from the school. never set a foot in industry... ) (b) early layoff of Telcom companies. I think it just like the early 90s downsize of electroinc industry. The university end up with some staff left from the industry.

(3) To say the company move to Asia for the cost advantage, partially true. The other half of the truth is TAX and gov. incentive: If you have a fab in Asia, you can avoid import tax. Besides, gov. give Duty free for the 1st import cap. equipment, Plus low corp tax for few years (some place up to 15 years). To some extreme case, the two year no corp tax, that led rather few companies pulled out just after two years when the tax free incentive dryed out.

(4) As for cost saving, the immediate cost is no saving for MFG company... great saving for low capex company. Your support structure is huge (translation, shipping, duty, many set of books...etc.). Good for large qty. items. For specialty product, it may not be so benefit due to the additional overhead required. Some gov will not let you in to the market UNLESS it was "made local"... It is market driven rather than cost driven to move to Asia.

(5) The situation is a result of corp try to make book "looks" better but hurting the overall competitiveness in the long run (how many CEOs care about long run nowadays?). Japanese economy is under the water, but R&D is still stronger than any country. US should follow the suit before it is too late. (when all the top notch R&D retire kick in next few years, the landscape is going to change completely).

(6) said the exactly the same thing before the ASIC move off the shore... no body really cares... It is Telecoms turn... possibly followed by Bio-medical, etc....etc. Down to the dark age.

-st

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Half-Inch Stud 12/5/2012 | 12:34:35 AM

re: The Asian Invasion As a Nation that builds-up other Nations. I suggest that our U.S.A. remains ahead of the rest.

Half-Inch Stud

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allidia 12/5/2012 | 12:34:35 AM

re: The Asian Invasion will be when Zettabit moves to China and tries to develop a new technology. Since we now have a courageous President in the USA they won't be able to swap campaign contributions for trade secrets anymore and Zettabit will undertand that the Chinese threat today will have the same result as the Japanese threat in the 80's. It's all about cheap labor. Has China and India landed men on the moon? Apparently that is the only thing Clinton didn't sell to them.

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netwizard 12/5/2012 | 12:34:29 AM

re: The Asian Invasion landing men on the moon does not land food on the table.

Manufacturing has been outsourced. IT/Tech services are being outsourced. so is there any industry that cannot be outsourced??? how many people can the defense industry feed??

U.S has recorded the highest trade deficit in its history and is pushing the maximum limit of 6.24T in borrowings. just in case nobody's noticed, a petition signed by 400 economists including 10 nobel laurettes indicates that the economic policy/tax cuts the current govt. has in plan will not work.

social security funds are in deficit to which the tax cuts will only add to. so, i'm guessing folks will have to work till they're 80 before they can reap anything off social security (if anything's left). so what advantage are we talking about here??

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