Bush Administration Suppresses Outsourcing Report

According to an article by Manufacturing & Technology News, the Bush administration suppressed an outsourcing report that contains a long section on the shift of the U.S. semiconductor industry to offshore locations. The report concludes the U.S. risks losing high-end R&D and design jobs because, as semiconductor fabs move to Asia, high-skilled jobs move with them. The design centers that U.S. companies are rapidly creating in Asia do not support local customers but support the home office with lower-cost designers. The cost of employing a design engineer in Ireland, Taiwan, China or India has been estimated to be 50 to 90 percent lower than in the United States.

According to estimates by the Semiconductor Industry Association, the number of engineers employed offshore by U.S. semiconductor companies rose by more than 10,000 between 2000 and 2003, while engineers employed in the United States dropped by 4,000 during the same period.

With fewer companies investing in new wafer manufacturing in the United States, process R&D co-located with leading edge facilities may also decline, resulting in fewer high-skill jobs for U.S. graduates. Offshoring of design work can also impose downward pressure on U.S. wages and reduce the demand for U.S. design engineers. As the number of overseas design centers increases, it may draw foreign talent from the United States.

Source: Manufacturing & Technology News