Once, Steve Jobs was interviewed on TV. When asked why iPhones cannot be produced in the United States, he explained that this is an impossible task. Steve Jobs stated that "advanced electronic product production is unlikely to be brought back to China". Just like at that time, people now have a clearer understanding of why transferring production from China is not so easy.
To understand why it is difficult to shift chip manufacturing to the West, we must briefly review history.
How did they achieve such a level of development?
In the 1970s, during the Nixon era, negotiations on normalization of relations and possible cooperation had already begun. In 2001, China became a full member of the World Trade Organization, a process initiated by the United States. Although many American companies have been there before, 2000 and 2001 will be seen as turning points in China's industrial development.
American companies began investing in China in the early 1980s. Due to cheaper labor and greater opportunities for profit, they began to relocate for production. At that time, no one objected because everyone was very satisfied. A large portion of the population is beginning to lift themselves out of poverty.
After 2000, China concluded that they could better unleash their potential. So they began to develop an "ecosystem" strategy. For example, producing a cotton jacket not only requires cotton. There is also its processing, weaving, sewing, and procurement of necessary raw materials, such as buttons, zippers, ropes, etc. Therefore, they organized the manufacturing of these materials on their own land and in some areas of neighboring countries such as Bangladesh, Nepal, and Vietnam.
Is it possible to transfer production from China?
Now, the same situation has occurred with smartphones, computers, and all other advanced electronic products. The authorities have developed an industry strategy with interdependent supply chains. The production of all necessary components is organized in the region, so the cost is as low as possible. It is worth noting that this process actually began when China began opening up to the outside world in 1980.
Shenzhen is a good example. In the late 1970s, it was still a fishing village with a population of only 30000. Thirty years later, this number has exceeded 10 million. A correct decision can bring about such changes.
As time passed, Chinese industry began to progress. This is not just a problem with mobile phones. The key is telecommunications infrastructure. European companies such as Nokia, Siemens, and Ericsson do not consider this to be an issue. At the beginning, Chinese competitors did not represent competition in the field of network infrastructure production. Not long after, they reached the summit. The reason is simple, they are just more competitive. It has been proven that Huawei has won the global market, but not everyone likes it. Especially in the United States, it began with a movement to shift production from China. Not only infrastructure, but almost the entire industry is linked to advanced technology.
Later, a similar situation occurred in the mobile phone industry, where Huawei almost ranked first in terms of shipment volume. In 2018, Trump cited Section 3 of the 1974 Trade Act