Breaking the Bottleneck | Issue 24
[9/18/2023] Manufacturing Market Map, Semiconductor Export Controls, Industrial Metaverse, & Oral History of PowerPoint Creator
Breaking the Bottleneck is a weekly manufacturing technology newsletter with perspectives, interviews, news, funding announcements, and a startup database. For an older version of a discrete and continuous manufacturing market map click the link here!
Content I Enjoyed This Week 🏭🗞️🔬
Continuous Manufacturing Market Map Update!
News:
UAW Goes on Strike Against GM, Ford and Stellantis [WSJ]
The United Auto Workers (UAW) union has initiated a strike against all three major Detroit car companies - General Motors (GM), Ford, and Stellantis (formerly Fiat Chrysler) - for the first time in its history. The strike is expected to have a limited initial financial impact, but its impact could grow the longer the work stoppages continue. The targeted assembly factories build some of the companies' highly profitable pickup trucks and SUVs. The main sticking points in the negotiations include wage increases, cost-of-living adjustments, and retiree medical benefits. The companies had offered wage increases of 17.5% to 20% over more than four years, which fell short of the union's mid-30% demand. Economists are assessing the potential fallout from a labor disruption at GM, Ford, and Stellantis, which produce roughly half of the 15 million vehicles made in the U.S. annually.
How Off-the-Shelf Tech Can Make Factories More Profitable [HBR]
55% of companies with revenues under $500 million a year said technological change is happening too fast for them to keep up; just 24% of larger companies said the same. However, mid-sized manufacturers can implement smart factory solutions more affordably and quickly than previously thought. Today many manufacturers underutilize readily available data, such as labor hours, which can be analyzed to improve efficiency. For example, a commercial bakery realized $1.5 million in annual savings, which increased EBITDA by 4.8%, through targeted smart factory solutions centered on three business issues. The company installed digital scales and sensors on the existing manufacturing line, to catch waste and reduce scrap by 25%. A homemade labor visibility and utilization dashboard provided a real-time view of labor to track behavior reducing overtime by 50%. Finally, by installing IoT sensors and connecting data feed with existing systems to monitor utility consumption, annual utility spending was cut by 5% because, among other things, it revealed when the equipment was being run unnecessarily.
Tesla Close to New Gigapress Breakthrough [Verge]
Tesla is reportedly working on a new manufacturing process that involves die-casting almost the entire vehicle underbody as a single piece, as opposed to the conventional method that uses around 400 separate parts. This process, known as "gigacasting," is expected to make use of 3D printing and industrial sand to create the molds for casting. The process allows Tesla to cast the entire vehicle underbody in one piece, eliminating the need for welding multiple parts together thus reducing costs and increasing production efficiency. However to make the transition Tesla requires more powerful and larger "gigapresses" and at higher pressures, the 3D-printed sand core technique may face limitations, potentially slowing down the manufacturing process. The goal is for the new process to play a critical role in the company's upcoming $25,000 electric car, among others.
Modi Wants to Make India a Chip-Making Superpower. Can He? [NYTimes]
India is pursuing an ambitious plan to establish a semiconductor manufacturing industry from scratch. The government, led by Prime Minister Narendra Modi, aims to make microprocessor chips entirely within India. The government is offering substantial subsidies to attract private companies to invest in the sector, but the challenges are substantial. Though India has a strong presence in semiconductor design, it lacks the infrastructure and workforce needed for chip fabrication. Building a semiconductor industry takes decades and significant capital investment, and India is entering a highly competitive field dominated by countries like Taiwan. Nonetheless, the effort reflects India's determination to play a significant role in advanced technology manufacturing and reduce its reliance on imports, particularly from China.
Research:
China AI & Semiconductors Rise: US Sanctions Have Failed [SemiAnalysis]
Great breakdown of the ineffectiveness of October 2022 initiated semiconductor export controls imposed by the United States on China to limit China's access to advanced computing chips and AI. A great example is Huawei's Kirin 9000S Chip. The performance and power consumption profile in a variety of tests bring it on par with 1 to 2-year-old Qualcomm chips, the integrated modem is on par with Qualcomm’s best, and it is all domestically produced. However most notably SMIC's N+2 (7nm) process technology used to create the chip is effectively on par with Samsung’s process with significantly better yield and this is all with the existing EUV, IP, & export controls. This highlights gaps in the controls in numerous ways. First SMIC and other firms are pursuing process technologies that sell to US companies and can therefore continue to import whatever tools. Second, equipment companies such as Applied Materials, Lam Research, etc. are selling basically every tool they offer to China under the guise that they are being used for 28nm. In reality the Chinese use these tools for 7nm and even 5nm because most deposition, etch, metrology, cleaning, coaters, etc. tools can be used for both. Finally, the restrictions have just catalyzed China to focus its greater pool of technical talent on AI for EDA, microarchitectures, and system design to drive a more rapid transformation of the software layer.
Deloitte and MLC Study on the Industrial Metaverse [Deloitte]
The conducted study interviewing 350 senior executives in the US manufacturing industry explores the industrial metaverse and its applications in manufacturing. Broadly there is optimism around the technology’s adoption over the next five years with manufacturers on average piloting greater than 6 industrial metaverse use cases across production, supply chain, & customer ecosystems. Furthermore when deployed at scale manufacturing executives expect a 12%-14% improvement in across sales, throughput, productivity, & quality.
Podcasts:
The Impact of UAW Strike on Manufacturing [Garage Logic]
Path of High-Volume Manufacturing of Next-Gen Batteries [Journey to Scale]
GE Sensiworm Robot for More Accurate Inspection and Repair of Jet Engines
Chart of the Week:
The US tariff on EVs coming from China completely wipes out the 20% to 25% cost advantage China has because of lower labor costs, local suppliers, and vertical integration. In Europe, the tariff on Chinese EVs is 9%.
Track the Clean Manufacturing Factories Being Built Across the US
Manufacturing Deals
Lyten - A manufacturer of materials used in lithium-sulfur batteries for the automotive, aerospace and defense companies
$200 million [Series B] - Led by Prime Movers Lab and joined by Stellantis, FedEx Corporation, Honeywell, and the Walbridge Aldinger Company
FloLive - A company building advanced 5G network solutions, both privately and over the cloud
$47 million [Series C] - Led by Greenfield Partner & 83North and joined by Qualcomm Ventures, Dell Technologies Capital, Saban Ventures, and Hazelnut Partners
Prewitt Ridge - A requirements management and digital thread startup focused on discrete manufacturing
$4.1 million [Seed] - Led by Squadra Ventures and joined by Stage Venture Partners, Aurelia Foundry, Wonder Ventures, Haystack, Acequia, TechStars, and GC&H
Weekly Planned Downtime
Oral History of the Man Who Created PowerPoint
Hey Aditya, when I attempted accessing the older maps, the URL seems to hang while loading. Tried on Edge and Firefox with no luck on either. Might require a fix.