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Shapiro Cites Alternatives To China’s Plants

Higher costs from Chinese factories — blamed on higher energy and raw material costs, higher salaries for workers and the Summer Olympics, among others — is still a concern for the industry as the year winds down.

Gary Shapiro, president/CEO of the Consumer Electronics Association (CEA), said during an interview with TWICE at the recent CEA Fall Forum held here, “Certainly I have raised the issue a number of times. It is not logical for an industry to have all of its eggs in one basket.”

While Shapiro conceded that the Chinese have been “the lowest cost manufacturer for years,” he noted that it is still “a communist country [and] it is subject to its own economic and political forces which make [the CE industry] vulnerable.”

He cited possible alternatives such as India, Vietnam, Cambodia, Thailand, Indonesia “and even back to Mexico and the U.S., where you have opportunities … [if] it makes sense.”

But CEA’s influence in this area is limited because “trade associations don’t decide this, individual companies do … based on long-term or short-term strategies.”

Shapiro noted that there is a “growing and significant manufacturing in the U.S.” when it comes to semiconductor chip facilities for instance. “In Virginia semiconductors is the biggest export vs. tobacco,” and cited Intel, AMD, HP, TI, Apple and Microsoft as “leaders in innovation.”

Shapiro is bullish on the U.S doing more manufacturing. “If we come up with a plan we can do a lot more [technology] manufacturing here, since we have the skills. But low-end manufacturing should be overseas. I don’t think Americans want to sit at an assembly line. But the higher-value stuff? We have the brains, the expertise to do it.”