LEDs at Forefront of Reshoring Movement – EE Times

Reshoring is a thing now. It’s the opposite of offshoring. Last year, as many manufacturing jobs returned to the US as left.

Sister publication Design News has a summary of the manufacturing reshoring movement to date. Since the term was first used in 2010, something like 80,000 jobs have returned to US factories from overseas, 61% of those from China, according to the Reshoring Initiative, which keeps track of such things. Ten years ago, we were losing a net 160,000 jobs a year, but now we’ve achieved parity.

What has changed since 30 years ago, when offshoring started in earnest, or 10 years ago, when the bleeding became a hemorrhage? Labor rates in once-cheap offshore destinations have been rising. Wages in China are rising at nearly 20% per year now. In the last 13 years, US wages have barely budged, rising 2%, about as much as productivity. Transportation has gotten far more expensive. Energy in the US, led by cheap natural gas, costs 40% less than in many overseas markets. Companies have had plenty of experience with the downsides of offshoring — those factors that often weren’t considered when offshoring decisions were first made. Among these are sub-par quality control, high rework and product failure rates, long lead times, and fragile supply chains.

LED companies early in the game

A Boston Consulting Group study in 2011 identified seven “tipping-point” industries for which the economics of reshoring often makes sense: computers and electronics, appliances, furniture, machinery, fabricated metals, rubber and plastics products, and transportation goods.

This article continues on All LED Lighting.

— Keith Dawson, Editor-in-Chief, All LED Lighting