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Thread: weekend commentary - outsourcing Silicon Valley

  1. #1
    Banned Melonie's Avatar
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    Default weekend commentary - outsourcing Silicon Valley

    (snip)"High Tech Research Moves From U.S. To China

    Goodbye Silicon Valley, hello Xi’an China. Applied Materials will do new cutting edge research on solar panels in Xi’an.

    Please consider China Drawing High-Tech Research From U.S.


    XI’AN, China — For years, many of China’s best and brightest left for the United States, where high-tech industry was more cutting-edge. But Mark R. Pinto is moving in the opposite direction.

    Mr. Pinto is the first chief technology officer of a major American tech company to move to China. The company, Applied Materials, is one of Silicon Valley’s most prominent firms. It supplied equipment used to perfect the first computer chips. Today, it is the world’s biggest supplier of the equipment used to make semiconductors, solar panels and flat-panel displays.

    In addition to moving Mr. Pinto and his family to Beijing in January, Applied Materials, whose headquarters are in Santa Clara, Calif., has just built its newest and largest research labs here. Last week, it even held its annual shareholders’ meeting in Xi’an.

    It is hardly alone. Companies — and their engineers — are being drawn here more and more as China develops a high-tech economy that increasingly competes directly with the United States.

    A few American companies are even making deals with Chinese companies to license Chinese technology.

    Xi’an — a city about 600 miles southwest of Beijing known for the discovery nearby of 2,200-year-old terra cotta warriors — has 47 universities and other institutions of higher learning, churning out engineers with master’s degrees who can be hired for $730 a month.

    On the other side of Xi’an from Applied Materials sits Thermal Power Research Institute, China’s world-leading laboratory on cleaner coal. The company has just licensed its latest design to Future Fuels in the United States.

    The American company plans to pay about $100 million to import from China a 130-foot-high maze of equipment that turns coal into a gas before burning it. This method reduces toxic pollution and makes it easier to capture and sequester gases like carbon dioxide under ground.

    Future Fuels will ship the equipment to Pennsylvania and have Chinese engineers teach American workers how to assemble and operate it.

    Small clean-energy companies are headed to China, too.

    Locally, the Xi’an city government sold a 75-year land lease to Applied Materials at a deep discount and is reimbursing the company for roughly a quarter of the lab complex’s operating costs for five years, said Gang Zou, the site’s general manager.

    The company has taken measures, including sealing its computers’ ports here, to prevent the easy use of flash drives to record data. Employees are not allowed to take computers from the building without special permission, and an elaborate system of computer passwords and electronic door keys limits access to certain technological secrets.

    But none of that changes the sense that tectonic shifts are under way.

    When Xie Lina, a 26-year-old Applied Materials engineer here, was asked recently whether China would play a big role in clean energy in the future, she was surprised by the question.

    “Most of the graduate students in China are chasing this area,” she said. “Of course, China will lead everything.”

    There is much more in the article and slideshow that is worth a look. Here is one key sentence from above "Xi’an has 47 universities and other institutions of higher learning, churning out engineers with master’s degrees who can be hired for $730 a month."

    Think that is not deflationary?

    Mike "Mish" Shedlock

    from

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    Default Re: weekend commentary - outsourcing Silicon Valley

    This seems to be the trend, it was India now it is China. India only hires if you move to India, and then you are making around $500.00 USD. Though one lives like a king in India for that amount of money there are still numerous problems with the Social Democracy, and living in a Social Democracy that is still evolving.
    A police officer in Mumbai raped a girl in broad daylight because she was wearing jeans and a t-shirt. Though the Sari is sexier any day IMHO, it is still culturally unacceptable to some while others accept the Western Influence.
    How many American Engineers or Bio-Engineers are going to accept employment and move to communist China? When will our Government start taxing companies for taking high tech jobs outside the United States leaving many educated and extremely capable people sitting on the sidelines wondering why they went to College in the first place. This is the reason I started dancing, I am lucky, my male co-workers don't have the option and many are still unemployed or under employed to this day.


    Quote Originally Posted by Melonie View Post
    (snip)"High Tech Research Moves From U.S. To China

    Goodbye Silicon Valley, hello Xi’an China. Applied Materials will do new cutting edge research on solar panels in Xi’an.

    Please consider China Drawing High-Tech Research From U.S.


    XI’AN, China — For years, many of China’s best and brightest left for the United States, where high-tech industry was more cutting-edge. But Mark R. Pinto is moving in the opposite direction.

    Mr. Pinto is the first chief technology officer of a major American tech company to move to China. The company, Applied Materials, is one of Silicon Valley’s most prominent firms. It supplied equipment used to perfect the first computer chips. Today, it is the world’s biggest supplier of the equipment used to make semiconductors, solar panels and flat-panel displays.

    In addition to moving Mr. Pinto and his family to Beijing in January, Applied Materials, whose headquarters are in Santa Clara, Calif., has just built its newest and largest research labs here. Last week, it even held its annual shareholders’ meeting in Xi’an.

    It is hardly alone. Companies — and their engineers — are being drawn here more and more as China develops a high-tech economy that increasingly competes directly with the United States.

    A few American companies are even making deals with Chinese companies to license Chinese technology.

    Xi’an — a city about 600 miles southwest of Beijing known for the discovery nearby of 2,200-year-old terra cotta warriors — has 47 universities and other institutions of higher learning, churning out engineers with master’s degrees who can be hired for $730 a month.

    On the other side of Xi’an from Applied Materials sits Thermal Power Research Institute, China’s world-leading laboratory on cleaner coal. The company has just licensed its latest design to Future Fuels in the United States.

    The American company plans to pay about $100 million to import from China a 130-foot-high maze of equipment that turns coal into a gas before burning it. This method reduces toxic pollution and makes it easier to capture and sequester gases like carbon dioxide under ground.

    Future Fuels will ship the equipment to Pennsylvania and have Chinese engineers teach American workers how to assemble and operate it.

    Small clean-energy companies are headed to China, too.

    Locally, the Xi’an city government sold a 75-year land lease to Applied Materials at a deep discount and is reimbursing the company for roughly a quarter of the lab complex’s operating costs for five years, said Gang Zou, the site’s general manager.

    The company has taken measures, including sealing its computers’ ports here, to prevent the easy use of flash drives to record data. Employees are not allowed to take computers from the building without special permission, and an elaborate system of computer passwords and electronic door keys limits access to certain technological secrets.

    But none of that changes the sense that tectonic shifts are under way.

    When Xie Lina, a 26-year-old Applied Materials engineer here, was asked recently whether China would play a big role in clean energy in the future, she was surprised by the question.

    “Most of the graduate students in China are chasing this area,” she said. “Of course, China will lead everything.”

    There is much more in the article and slideshow that is worth a look. Here is one key sentence from above "Xi’an has 47 universities and other institutions of higher learning, churning out engineers with master’s degrees who can be hired for $730 a month."

    Think that is not deflationary?

    Mike "Mish" Shedlock

    from http://globaleconomicanalysis.blogsp...rom-us-to.html

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    Default Re: weekend commentary - outsourcing Silicon Valley

    How many American Engineers or Bio-Engineers are going to accept employment and move to communist China?
    well, obviously, the answer is virtually none ... especially when the US federal gov't is willing to keep extending unemployment benefits so the don't NEED to find work that badly.


    When will our Government start taxing companies for taking high tech jobs outside the United States leaving many educated and extremely capable people sitting on the sidelines wondering why they went to College in the first place
    Unfortunately, in today's globalized world, not all of the companies capable of producing high tech products ( thus offering high tech jobs ) are American based such that they would subject themselves to such a tax. And for those American companies that were unable to avoid such a tax, the absence of an equivalent tax on their foreign competitors would place the American companies at the same economic disadvantage as if they hadn't tried to reduce production costs by going offshore in the first place. In both cases, the foreign competitor 'wins' and American high tech jobs are lost. Thus the only real difference would be that investors in the American company would benefit from the offshore scenario but lose money under the 'remain in America and die a slow death' scenario.

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    Banned Melonie's Avatar
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    Default Re: weekend commentary - outsourcing Silicon Valley

    I'll also add another chapter ...

    (snip)"Many of my daughter's friends who are graduating college this year plan on beginning their careers in other countries.

    The schools they are graduating from include Harvard Business School, MIT, Colorado School of Mines, St. John's College and Stanford.

    They will be starting their careers in New Zealand, France, South Africa, Canada, Brazil and England. Even my daughter's job choice will probably have her traveling to Italy and Germany on a regular basis.

    It was startling to see that many bright young people so willing to leave this country. I don't know how many of those young men and women will actually retain their U.S. citizenship. Some really didn't seem to care one way or the other.

    From my conversations with them, it is my understanding that they are very aware of what is happening in this country, as well as the world, and just wish to keep their options open.

    This anecdotal observation, combined with conversations with other parents and articles that I've read, leads me to believe that the U.S. is about to encounter a "brain drain" of the next generation.

    Very concerned about the ramifications of current U.S. policies"(snip)

    and

    (snip)"This is Great Depression II papered over by programs created in Great Depression I so that the government's GDP figures hide the fact. Wake Up America! Silicon Valley's lust for indentured servants, H1-Bs, has morphed into the mechanism to transfer Silicon Valley to China and India.

    The train has left the station and anyone paying on an $800,000.00 mortgage on a $1,000,000.00 Silicon Valley house will in as little as five years see themselves 50% underwater and their wages declining.

    We need to immediately give a green card to every H1-B worker and end the H1-B program. If we need them, why should we ask them to leave? We either need them or we don't need them. As for foreign hard science Masters candidates, a green card, as for foreign hard science PhD candidates, a fast track to citizenship. But let us end this "indentured servitude" that harms the American worker and the H1-B worker. I don't want them to leave, I want them to be free to stay and not be exploited. This would take away the corporation's ability to cheat and game the system. Many of the successful start-ups in Silicon Valley were started by former (that is green card carrying) H1-Bs who latter became citizens.

    The incentives today are for them to go "home" and start businesses there. We need to reverse that trend. For those of you not familiar with Applied Materials, they are the ones who make the secret sauce that transforms a silicon wafer into a product that drives technology. There are two firms that hold the keys to this kingdom: Applied Materials and KLA-Tencor. Now with Applied Materials moving to China, we have at most 5 years to fix things before it is "Game Over"."(snip)

    from

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    Default Re: weekend commentary - outsourcing Silicon Valley

    Silicon Valley was over five years ago. I went back in 2003 and there were for rent and for lease signs on every block with wide open parking lots. From what I hear from the people still there, it is not getting better - but worse. (Given California's disdain for capitalism I wouldn't doubt it.)

    When the schools have to start firing instructors and reducing their options to simply adjunct, there are going to be some new ideas about how grand this globalization is to wealthier nations.

    Unfortunately, as I have said before, I don't think enough will get it until we are up to our necks in problems (and recognize them as problems!)

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    Banned Melonie's Avatar
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    Default Re: weekend commentary - outsourcing Silicon Valley

    Unfortunately, as I have said before, I don't think enough will get it until we are up to our necks in problems
    Well, the last time such problems were acknowledged to exist, the US was in a position to protect domestic industries ( via Smoot Hawley tariffs ) because those domestic industries still existed. If something similar were to be attempted today, and if foreign countries again retaliate, the US could in fact find itself without access to many products because no domestic industry remains to produce them !!! Yes domestic production could eventually be reconstituted, but probably resulting in retail prices that are double the 'world market' prices available today. After all, somebody has to 'subsidize' US minimum wage labor costs, US mandatory employee benefit costs, US worker safety and environmental compliance costs, US business tax rates etc. and in one sense it is more fair to do so by across the board retail price increases as opposed to gov't redistribution of increased tax revenues derived from newly enacted tax increases on the middle class and the 'rich' ( to the extent that the 'rich' are unable to avoid such new taxes).

    However, the 'gold foil hat' crowd would tell you that such problems are already recognized, and that steps are already being taken to address the problem from a different angle ... i.e. restoring America's world market competitiveness via a major devaluation of the US dollar's exchange rate. While this approach avoids the direct fallout of the Smoot-Hawley approach, it would also result in both major price increases for all remaining imported items ( most importantly oil / energy ) as well as a huge loss of 'purchasing power' re the existing savings and investments of working class Americans.

    See the 'jungle drums' thread ! Or better yet which is much more focused on US versus China trade realities / possibilities.

    ~
    Last edited by Melonie; 03-21-2010 at 04:57 AM.

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    Default Re: weekend commentary - outsourcing Silicon Valley

    ^^^ That's the choice.

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