Breaking the Bottleneck | Issue 21
[8/14/2023] China & Brazil, TSMC vs Unions, Robot Adoption, & Building a Road
Breaking the Bottleneck is a weekly manufacturing technology newsletter with perspectives, interviews, news, funding announcements, and a startup database. For a high-level market map on discrete and continuous manufacturing click the link here! I'd love to talk if you know anyone looking to chat about manufacturing tech!
Content I Enjoyed This Week 🏭🗞️🔬
News:
Ford’s Shutdown in Brazil Cedes US Territory to China [Bloomberg]
Ford's plant on Brazil's east coast, covering an area larger than New York's Central Park, shut down two years ago, leaving many jobless. Allison Barreto Sousa, a long-time Ford maintenance technician, couldn't bring himself to dismantle the equipment he had once installed and maintained. The plant's revival now depends on China's BYD Co., the country's largest electric-vehicle maker. Negotiations are underway for BYD to purchase the factory, representing the ambitions of Brazil's President Lula for an industrial renaissance. Lula seeks China's support, in contrast to the US's strategy of maintaining technological advantages over China. China's investments in Brazilian infrastructure, such as a $1.3 billion bridge and electric monorail, signify its growing influence in emerging markets like Brazil.
US Union Fights TSMC’s Taiwanese Worker Plan [South China Morning Post]
A US workers' union, Arizona Pipe Trades 469, has launched an online petition against Taiwan Semiconductor Manufacturing Company (TSMC) due to setbacks faced by its $40 billion Phoenix plant. The petition calls for American lawmakers to deny visas for Taiwanese workers that TSMC wants to import to expedite the construction of the plant. The union accuses TSMC of disrespecting American workers, prioritizing profits over worker safety, and misrepresenting the skills of Arizona's workforce, despite receiving financial breaks under the Chips and Science Act. The plant, announced under the Trump administration, is part of President Biden's efforts to compete with China. TSMC has faced challenges finding skilled workers to install advanced machinery, leading to a delay in its production plans. TSMC's chairman mentioned sending skilled technicians from Taiwan to train local workers in the US to address this issue. The union opposes this plan, asserting that it contradicts the purpose of the Chips Act.
Tech Transfer Experts Relieved Over White House Order [Science]
President Joe Biden has signed an executive order to ensure that technologies developed through federally funded research are manufactured in the United States to a greater extent. The order instructs federal research agencies to consider extending existing manufacturing requirements for U.S. manufacturers to a broader range of licensing deals. This move has been welcomed by tech transfer experts, who had been concerned that the Biden administration might enforce more restrictive licensing requirements, similar to those imposed by the Department of Energy (DOE) two years ago. The executive order addresses concerns about licensing, manufacturing, and waivers for nonexclusive licenses. It aims to standardize and improve the waiver process when a domestic manufacturer cannot be found, while also considering factors such as working conditions and unionization status of overseas factories. The extent of expanding domestic manufacturing requirements remains uncertain, but tech transfer experts emphasize that stricter licensing won't necessarily reverse the loss of U.S. manufacturing capabilities.
U. S. Steel Aims and Google Cloud’s Generative AI [Business Wire]
United States Steel Corporation (U. S. Steel) and Google Cloud have announced a collaboration to utilize Google Cloud's generative artificial intelligence (gen AI) technology to enhance efficiencies and improve employee experiences in the largest iron ore mine in North America. The first application to be launched as part of this collaboration is called MineMind™, aimed at simplifying equipment maintenance by offering optimal solutions for mechanical issues, thus enhancing productivity. Powered by Google Cloud's AI technology, MineMind™ is expected to improve the maintenance team's experience and save costs through efficient use of technicians' time and better maintenance of trucks. The initial phase will begin in September and impact over 60 haul trucks at U. S. Steel's Minnesota Ore Operations facilities.
Automation in Garment Manufacturing [Fibre2Fashion]
The fashion industry is experiencing a shift towards automation due to changing trends and the need for fast production. While traditionally labor-intensive, garment manufacturing is increasingly adopting automation for improved efficiency and quality. Developing countries like China, Bangladesh, Vietnam, Turkey, Germany, Japan, the United States, and India are investing in automation to remain competitive. They are applying automation across the various stages like production planning, cutting, sewing, embroidery, printing, finishing, inspection, and order management and relying on unique technology from companies like Eton Systems, Vibemac, Thermotron, Gerber AccuMark, Lectra Vector, and Eastman Eagle. So far the benefits include increased productivity, improved quality control, cost reduction, flexibility, faster time-to-market, integrated workflows, data analysis, and enhanced safety.
Research:
Geographic Distribution of Robotic Hubs in US Manufacturing [Axios, NBEU]
Iowa, Michigan, Kansas, Wisconsin, and Minnesota are the top five states using robots in manufacturing, according to a new report from the National Bureau of Economic Research. Three-quarters of America's robots are clustered in just 10% of U.S. regions (as defined by the Office of Management and Budget), while the bottom 50% have almost no robots. Other insights from the report include that companies mainly view "Robots as mostly complements to production workers, not substitutes for them" and companies with robots tend to have more human workers than those without, but they often pay their workers less. There's also a robot cluster effect where companies are more likely to use robots if others nearby use them and if they're located in manufacturing hubs.
Boosting Machinery Sector Profitability via Digitization [McKinsey]
The report emphasizes the advantages of using large cloud hyper scalers, to seamlessly integrate with partners' solutions, providing support from system integrators and independent software vendors during implementation. The report recommends industrial companies take a holistic approach to realize significant impact across various business dimensions. Cloud-enabled digital transformation can improve a machinery manufacturer's EBIT by five to eight percentage points, leading to greater efficiency, productivity, communication, and customer satisfaction.
Podcasts/Video:
Additive Manufacturing at GE [Materialism]
The World’s Misguided Manufacturing Policies [Economist]
Chart of the Week:
Impact of the Clean Air Act in 1975
Manufacturing Deals
Birdstop - A remote sensing company providing detailed imagery on physical assets and locations
$2.3 million [Series Seed] - Led by Lerer Hippeau and joined by Anorak Ventures, Correlation Ventures, Data Tech Fund, Graph Ventures, and more
Saeki - A company building fully automated plants with robots and 3D printing technology to create components like aircraft wings & construction site intallations
$2.3 million [Series Seed] - Led by Wingman Ventures and joined by Vento Ventures, Getty Capital, and angel investors
Tractian - A company offering CMMS, EAM, and PdM software to predict when machines need maintenance
$45 million [Series B] - Led by General Catalyst and Next 47
Weekly Planned Downtime
Building a Road Across America