The estimated manufacturing cost of a pair of Nike shoes in Asia is around $25-$50, according to a breakdown by a supposed industry insider. This includes roughly $12-16 for materials, $8-10 for labor, $2-3 for factory overhead, and $3-5 for freight/shipping. These figures are presented as educated guesses based on experience and don't account for research and development, marketing, or other business expenses which significantly contribute to the final retail price. The author emphasizes the difference between manufacturing cost and the retail price, highlighting the significant markup driven by brand value, marketing, and other factors.
ASML CEO Peter Wennink warns that Europe risks falling behind in the global semiconductor race due to slow and complex regulations. While supportive of the EU Chips Act's aims to boost domestic chip production, Wennink argues that excessive bureaucracy and delayed funding disbursement hinder the rapid expansion needed to compete with heavily subsidized American and Asian chipmakers. He emphasizes the urgency for Europe to streamline its processes and accelerate investment to avoid losing out on crucial semiconductor manufacturing capacity and future innovation.
Hacker News users discuss the potential negative consequences of export controls on ASML's chipmaking equipment, echoing the CEO's warning in the linked Economist article. Some argue that such restrictions, while intended to hinder China's technological advancement, might incentivize them to develop their own indigenous technology, ultimately hurting ASML's long-term market share. Others express skepticism that China could replicate ASML's highly complex technology easily, emphasizing the company's significant lead and the difficulty of acquiring the necessary expertise and supply chains. Several commenters point out the delicate balance Europe must strike between national security concerns and economic interests, suggesting that overly aggressive restrictions could backfire. The geopolitical implications of these export controls are also debated, with some highlighting the potential for escalating tensions and a technological "cold war."
Arabic gum, a crucial ingredient in products like Coca-Cola and M&M's, is being smuggled out of war-torn Sudan, enriching armed groups and potentially prolonging the conflict. The gum arabic trade, largely controlled by Rapid Support Forces (RSF)-aligned militias, sees the valuable commodity moved through illicit routes bypassing official customs and depriving the Sudanese state of much-needed revenue. This smuggling operation funds the RSF's war efforts, hindering peace prospects and exacerbating the humanitarian crisis. Despite international efforts to promote ethical sourcing, the opaque nature of the supply chain allows this exploitation to continue.
Hacker News users discussed the complexities of supply chains and due diligence, questioning how difficult it truly is to trace the origins of gum arabic. Some pointed out that alternatives to gum arabic exist and wondered why companies don't switch, speculating about cost or performance differences. Others noted the inherent difficulties in verifying sourcing in conflict zones, highlighting the potential for corruption and exploitation. Several commenters also touched upon the ethical dilemma consumers face, acknowledging the near impossibility of completely avoiding products touched by conflict. Finally, there was skepticism about the Middle East Monitor as a source, with some suggesting potential bias in their reporting.
Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chip maker, is expected to announce a massive $100 billion investment in advanced semiconductor manufacturing facilities in the United States over the next three years. This substantial commitment aims to boost domestic chip production and reduce U.S. reliance on foreign suppliers, particularly in light of escalating tensions with China and growing concerns about semiconductor supply chain security. The investment includes plans for multiple new factories, potentially creating thousands of jobs.
HN commenters are skeptical of TSMC's purported $100B investment, questioning whether it will fully materialize and expressing concern over the high cost of US chip fabrication. Several point out that TSMC's Arizona fabs are smaller and less advanced than their Taiwanese counterparts, suggesting the investment figure may include long-term operational costs rather than solely construction. Others discuss the geopolitical motivations behind the move, viewing it as a US strategy to secure its chip supply chain amidst rising tensions with China. Some highlight the challenges TSMC faces in the US, including higher labor and operating expenses, and potential difficulties attracting and retaining skilled talent. Finally, a few commenters raise concerns about the environmental impact of these large-scale fabs and the potential strain on local resources.
Drone delivery offers significant advantages for defense logistics, enabling faster, more flexible, and cost-effective resupply of critical items to troops, especially in austere or dangerous environments. By bypassing traditional supply chains reliant on vulnerable convoys and complex infrastructure, drones can deliver essential supplies like ammunition, medical equipment, and spare parts directly to the front lines. This improves responsiveness to rapidly changing battlefield needs, reduces the risk to personnel involved in transportation, and minimizes the logistical footprint required for sustainment. The post highlights the growing maturity of drone technology and its increasing adoption within defense organizations as a key element of future logistics strategies.
Hacker News users discussed the practicality and implications of drone delivery in defense. Several commenters questioned the touted cost savings, pointing to the potential expenses associated with maintenance, training, and infrastructure. Skepticism arose regarding the drones' vulnerability to enemy fire and their limited payload capacity compared to traditional methods. Some highlighted the ethical concerns of autonomous weapons systems, while others saw potential benefits in resupply missions and medical evacuations in hazardous environments. The discussion also touched on the regulatory hurdles and the potential for misuse of this technology. A compelling argument centered around the notion that the true value might not lie in direct combat applications, but rather in logistical support and intelligence gathering.
Apple announced a plan to invest over $500 billion in the US economy over the next four years. This builds on the $430 billion contributed over the previous five years and includes direct spending with US suppliers, data center expansions, capital expenditures in US manufacturing, and investments in American jobs and innovation. The company highlights key areas like 5G innovation and silicon engineering, as well as supporting emerging technologies. Apple's commitment extends beyond its own operations to include investments in next-generation manufacturing and renewable energy projects across the country.
Hacker News commenters generally expressed skepticism about Apple's announced $500B investment. Several pointed out that this is not new spending, but a continuation of existing trends, repackaged as a large number for PR purposes. Some questioned the actual impact of this spending, suggesting much of it will go towards stock buybacks and dividends rather than job creation or meaningful technological advancement. Others discussed the potential influence of government incentives and tax breaks on Apple's decision. A few commenters highlighted Apple's reliance on Asian manufacturing, arguing that true investment in the US would involve more domestic production. Overall, the sentiment leaned towards viewing the announcement as primarily a public relations move rather than a substantial shift in Apple's business strategy.
DigiKey's tariff resources page provides information to help customers understand and navigate the complexities of international trade tariffs. It offers explanations of common tariff terms, links to official government resources like the Harmonized Tariff Schedule (HTS), and guidance on how to classify products correctly for tariff assessment. The goal is to empower customers to accurately calculate landed costs, ensuring they are aware of potential import duties and fees when purchasing electronic components from DigiKey.
Hacker News users discussed DigiKey's tariff resource page, mostly focusing on the complexities and frustrations of navigating international trade. Several commenters pointed out the absurdity of tariffs and the negative impact on small businesses and consumers. One compelling comment highlighted how these resources, while helpful, underscore a broken system where companies need dedicated guides to navigate convoluted regulations. Another user questioned the actual impact of tariffs, suggesting that the costs are ultimately passed down to consumers, negating any intended benefits. The discussion also touched upon the difficulty in accurately calculating landed costs, with one commenter mentioning how unexpected fees and fluctuating exchange rates often lead to surprises.
Acer CEO Jason Chen stated that US tariffs on Chinese imports have led to a 10% increase in laptop prices in the United States. Chen explained that while Acer has shifted some production to other countries like Mexico and Taiwan to mitigate the impact, these locations are more expensive than China, resulting in the price hike. He believes that the tariffs ultimately harm American consumers and hopes the situation can be resolved, potentially through regional trade agreements.
HN commenters largely discuss the dubious nature of blaming tariffs for the price increase, pointing out that Acer's profits have increased and questioning whether the tariffs are truly the primary driver. Some suggest the price hike is simply opportunistic, leveraging current economic anxieties and inflation. Others note that component shortages and general inflation likely play a larger role. A few commenters mention that Acer laptops aren't particularly desirable, potentially necessitating price adjustments due to market forces. Several also point out the self-serving nature of the CEO's statement, as it deflects blame from the company itself.
TSMC is reportedly in talks with Intel to potentially manufacture chips for Intel's GPU division using TSMC's advanced 3nm process. This presents a dilemma for TSMC, as accepting Intel's business would mean allocating valuable 3nm capacity away from existing customers like Apple and Nvidia, potentially impacting their product roadmaps. Further complicating matters is the geopolitical pressure TSMC faces to reduce its reliance on China, with the US CHIPS Act incentivizing domestic production. While taking on Intel's business could strengthen TSMC's US presence and potentially secure government subsidies, it risks alienating key clients and diverting resources from crucial internal development. TSMC must carefully weigh the benefits of this collaboration against the potential disruption to its existing business and long-term strategic goals.
Hacker News commenters discuss the potential TSMC-Intel collaboration with skepticism. Several doubt Intel's ability to successfully utilize TSMC's advanced nodes, citing Intel's past manufacturing struggles and the potential complexity of integrating different process technologies. Others question the strategic logic for both companies, suggesting that such a partnership could create conflicts of interest and potentially compromise TSMC's competitive advantage. Some commenters also point out the geopolitical implications, noting the US government's desire to strengthen domestic chip production and reduce reliance on Taiwan. A few express concerns about the potential impact on TSMC's capacity and the availability of advanced nodes for other clients. Overall, the sentiment leans towards cautious pessimism about the rumored collaboration.
Taiwan Semiconductor Manufacturing Co (TSMC) has started producing 4-nanometer chips at its Arizona facility. US Commerce Secretary Gina Raimondo announced the milestone, stating the chips will be ready for customers in 2025. This marks a significant step for US chip production, bringing advanced semiconductor manufacturing capabilities to American soil. While the Arizona plant initially focused on 5-nanometer chips, this shift to 4-nanometer production signifies an upgrade to a more advanced and efficient process.
Hacker News commenters discuss the geopolitical implications of TSMC's Arizona fab, expressing skepticism about its competitiveness with Taiwanese facilities. Some doubt the US can replicate the supporting infrastructure and skilled workforce that TSMC enjoys in Taiwan, potentially leading to higher costs and lower yields. Others highlight the strategic importance of domestic chip production for the US, even if it's less efficient, to reduce reliance on Taiwan amidst rising tensions with China. Several commenters also question the long-term viability of the project given the rapid pace of semiconductor technology advancement, speculating that the Arizona fab may be obsolete by the time it reaches full production. Finally, some express concern about the environmental impact of chip manufacturing, particularly water usage in Arizona's arid climate.
Summary of Comments ( 45 )
https://news.ycombinator.com/item?id=43631543
HN commenters discuss the complexities of calculating the true cost of Nike shoe production. Several point out that the $20 figure cited by the original Twitter thread likely only represents direct labor and material costs, neglecting significant expenses like R&D, marketing, shipping, tariffs, and retail markup. Some commenters with manufacturing experience suggest a factory cost closer to $30-40, while others argue the true cost, including all associated expenses, could be much higher. The thread also touches upon the difficulties in accurately assessing factory conditions and worker treatment based solely on cost estimates. Finally, some commenters express skepticism about the overall business model of high-priced athletic shoes.
The Hacker News post "How much do you think it costs to make a pair of Nike shoes in Asia?" generated a fair number of comments discussing the cost breakdown of manufacturing Nike shoes. Several commenters focused on differentiating between manufacturing costs and other associated expenses.
One compelling line of discussion revolved around the distinction between manufacturing cost (materials and labor) and landed cost (which includes manufacturing, shipping, import duties, and other fees). A commenter estimated the manufacturing cost in the $10-20 range, while acknowledging that the landed cost could be significantly higher. Others agreed with this assessment, emphasizing that factors like tariffs and shipping could easily double the cost.
Another commenter highlighted the different tiers of shoe quality and corresponding manufacturing costs. They suggested that a basic, simple running shoe would likely have a lower manufacturing cost than a more complex design involving advanced materials and construction techniques. This introduced nuance into the conversation, suggesting the impossibility of a single definitive answer to the original question.
Several users discussed the markup on Nike shoes, comparing the estimated manufacturing cost to the retail price. They pointed to the high profit margins enjoyed by brands like Nike, attributing this to factors such as marketing, research and development, and brand recognition. This thread touched upon the value consumers place on branding and the economics of the athletic footwear market.
A few commenters also mentioned the potential variations in manufacturing costs across different countries in Asia. They alluded to differences in labor costs, materials sourcing, and factory overhead, suggesting that the specific location of production within Asia could influence the final cost.
Finally, one commenter offered a more detailed breakdown, suggesting a $5 figure for materials, $3 for labor, and $2 for factory overhead, arriving at a $10 total manufacturing cost. While not definitively verifiable, this provided a more granular perspective on the potential cost components.
Overall, the comments section provided a lively discussion of the various factors influencing the cost of producing Nike shoes in Asia. While no definitive figure was established, the comments offered valuable insights into the complexities of global manufacturing, cost breakdowns, and the economics of the athletic footwear industry.