As Chip Shortages Plague the Embedded Computing Industry, OEMs Think “America First”

March 02, 2022


As Chip Shortages Plague the Embedded Computing Industry, OEMs Think “America First”

In the world of manufacturing for industrial and rugged applications, including robotics, and artificial intelligence, the Made in America moniker brings a lot of cache.

The descriptors that come to mind are high quality and a willingness to stand behind the product. Bringing manufacturing back to the U.S. is also a big part of the agendas of both the current and previous presidential administrations.

“Manufacturing” in the U.S., or any region for that matter, typically goes beyond just fabricating the product. A vendor that manufactures in the U.S. is likely to also handle all the integration and testing here as well. Having this process occur close to home makes it easier for manufacturers to scale the products (up or down) when they’re dealing with local suppliers.

(Image Credit: Example of localized computing system assembly, integration, testing, and logistics from Premio Inc in Los Angeles, CA)

Don’t Let Delays Become the Norm

Some delays from abroad are expected; you know approximately from experience how long it will take for your products to arrive from a given destination, having to pass through customs, and so on. It’s the unexpected delays that really cause problems. And problems tend to snowball, i.e., when one part is delayed, it causes delays in other parts of the production and assembly process. And lately, unexpected delays are becoming the norm. The pandemic has unfortunately accelerated the need for localized manufacturing by significantly disrupting the various supply chains.

Maintaining a Robust Economy

If you believe that a global trade deficit is right around the corner, and so many signs point to that phenomenon, Made in America is paramount. A deficit can lead to unsustainable borrowing and debt to other countries. At the same time, the negative federal budget deficit increases our national debt, putting an even bigger strain on the domestic economy. This snowball effect remains until the tide turns.

Alternatively, purchasing American-made products creates and encourages more exports, which should re-establish balance in American trade. In addition, the boost from supporting domestic businesses and the jobs they create puts more money into the national budget. Thriving domestic businesses means more jobs, thereby sending that “snowball” in the opposite (positive) direction.

Another reason OEMs enjoy doing business with U.S.-based manufacturers is that their trade secrets are more likely to remain secret. There’s also a “feel good” feeling that comes with localized manufacturing, namely we are helping to keep our fellow Americans employed. But that “feel good” only goes so far. It must come with the expected level of quality, or all bets are off.

Maintaining Your Time to Market

Premio is one solutions provider that believes that, through localized manufacturing and assembly, it can reduce its customers’ time-to-market and avoid being at the mercy of international disruptions, which are becoming more commonplace. Its products are aimed at the embedded and high-performance computing markets.

How Does Premio's Manufacturing Arm Benefit our Customer For Scale? - The Rugged Edge Media Hub

A great explanation of why you should either manufacture in America or purchase from someone who does is depicted in this latest episode of the Made in America video. The complete series can be found in Premio’s Rugged Edge Media Hub. The professional videos in the hub depict the various aspects on why OEMs should think America first, and then why Premio should be at the top of that list when it relates to embedded and high-performance computing technology.

How Does Having Localized Manufacturing Help Solve Some of the Supply Chain and Manufacturing Challenges That Premio May Face? - The Rugged Edge Media Hub

Premio operates a state-of-the-art facility in Los Angeles, California, and has been assembling its rugged edge products and solutions in America for more than 30 years. From that west-coast facility, the company is able to serve its global clientele, contribute to the U.S. economy, and grow the onshore ecosystem. While it’s nearly impossible to source every component in an advanced system through U.S. suppliers, the list of foreign devices required for Premio’s platforms is getting smaller.

The Computing Circle of Life - Corporate Video - The Rugged Edge Media Hub

The Chip Shortage Continues

We are now mired in a relatively significant chip shortage, which is having an effect on most walks of life, as those difficult-to-source semiconductors are in so many of devices today, with the automobile at the forefront. Most of those semiconductors involved in the shortage are manufactured abroad, mainly in Taiwan.

Through a partnership alliance with Intel, Premio is assured of getting the latest microprocessor technology released on the embedded roadmap. Representatives from Premio and Intel go into detail on how and why Made in America makes sense in this video.

Intel is currently increasing its manufacturing capacity in the U.S., announcing earlier this year its intentions to construct two new leading-edge chip factories in Ohio, with an initial investment of more than $20 billion. The company says that these facilities will boost production to meet the surging demand for advanced semiconductors. Construction of the first of the two fabs should commence before the end of the year. Production of the company’s advanced semiconductors is expected to come online some time in 2025.

Similarly, TSMC is in the process of constructing a $12 billion fab in Phoenix, Arizona, where the company will produce state-of-the-art 5-nanometer wafers. The fab should come on line in 2024, with the ability to produce 20,000 wafers per month.

The bottom line is that Made in America is more than just a cliché. It’s real for both the suppliers and consumers. It’s a formula that lets Premio rise to the top of the embedded computing supplier community in the United States of America.