The push to bring manufacturing back to the U.S. is gaining momentum, driven by tariffs, national security concerns, and global supply chain vulnerabilities. However, reversing the trend of offshoring, particularly in electronics, is an immensely difficult and long-term endeavor. The road to rebuilding the kind of manufacturing capacity the U.S. once had will take decades, akin to China’s rise in manufacturing.

This week, we’ll delve into why this reshoring effort faces such formidable challenges, tracing its roots back to the breakup of RCA in the 1940s, when manufacturing was relegated as a low government priority.

The Complexity of Reshoring US Manufacturing

The desire to “bring manufacturing back” resonates deeply with Americans, driven by nostalgia for a perceived golden age of manufacturing, along with the aforementioned security and supply chain concerns. However, reshoring complex electronics manufacturing to the U.S. faces substantial hurdles. These challenges are multifaceted and deeply embedded, shaped by decades of global economic shifts, strategic investments by competing nations, and fundamental differences in infrastructure, workforce, and policy.

Why China Remains a Dominant Force in Electronics Manufacturing

China’s rise as the world’s manufacturing hub didn’t happen by chance; it was the result of decades of strategic planning and deliberate investments. These key advantages are difficult for the U.S. to replicate, at least in the short term.

Labor Dynamics and Scale

The labor cost argument, often cited in the past, has become more nuanced. While Chinese labor costs have risen, the scale of the workforce and years of experience in electronics manufacturing have allowed China to maintain an unmatched level of efficiency and flexibility. The creation of massive manufacturing ecosystems like Foxconn City in Shenzhen, which employs hundreds of thousands of workers, exemplifies the scale of China’s advantage. The U.S. simply lacks comparable facilities of this magnitude.

Purpose-Built Infrastructure

China didn’t just build factories — it constructed entire logistical ecosystems to support them. From modern ports and high-speed rail networks to manufacturing zones with reliable utilities, China’s infrastructure supports rapid production scaling. In contrast, U.S. infrastructure, geared toward consumer logistics, lacks the specialized density needed for electronics manufacturing. Recreating such an integrated infrastructure in the U.S. would require massive investment and decades of development.

Robotics and Automation Adoption

China has also embraced robotics and automation, investing heavily in these areas to offset rising labor costs and enhance manufacturing precision. With an advanced and scalable mix of manual labor and high-tech automation, China can compete across a broad range of manufacturing complexities. While the U.S. excels in automation, its implementation within integrated manufacturing ecosystems lags behind China.

Aggressive Government Support

The Chinese government has consistently treated manufacturing as a national priority, providing substantial financial support through subsidies, tax incentives, low-interest loans, and research funding. This long-term, coordinated backing has helped Chinese manufacturers grow rapidly with reduced financial risk. In contrast, U.S. policies around manufacturing have fluctuated, creating uncertainty and dissuading investment.

The Slow Erosion of U.S. Manufacturing

China’s rise coincided with a slow, steady decline in U.S. manufacturing, particularly in electronics assembly. The focus shifted to higher-margin areas like design and software, while factories closed, equipment was scrapped, and skilled labor moved into other sectors. The loss of institutional knowledge and expertise in running complex production lines is another challenge. Rebuilding this ecosystem won’t be quick or easy, and it will take decades to regenerate the skilled workforce and supplier networks that once existed.

The Immense Hurdles of Rebuilding U.S. Manufacturing

Even with serious efforts to reshore manufacturing, the practical challenges are daunting.

Time and Investment

Building a modern manufacturing facility, especially for advanced technologies like semiconductor fabrication plants (fabs), is a multi-year process that involves substantial investment. Each fab can cost upwards of $15–$20 billion and take three to five years to complete. To restore a significant portion of U.S. electronics manufacturing, dozens of such facilities would be needed, alongside a network of smaller suppliers. This is a monumental task that will take decades to complete.

Policy and Incentive Stability

Building such facilities requires consistent, long-term incentives. Policy volatility in the U.S., particularly regarding tariffs and trade agreements, poses a significant risk. The unpredictability of such incentives makes it difficult to ensure a reliable return on the massive investments required for reshoring.

Skilled Labor Shortage

The U.S. faces a significant skills gap in electronics manufacturing. While the country excels in design and engineering, the workforce lacks sufficient technicians trained in the specialized skills needed for modern manufacturing. China, in contrast, produces far more engineers and technicians annually, many specifically trained for manufacturing roles.

Rebuilding the U.S. workforce to meet this demand will require long-term investment in vocational training and a cultural shift in how manufacturing careers are perceived.

Workforce Participation

Despite public support for reshoring manufacturing, a significant disconnect exists between sentiment and willingness to work in factories. Only a small percentage of people would consider working in manufacturing roles, which reflects changing career aspirations and perceptions of factory work. Attracting and retaining workers for these jobs, especially when competing with higher-paying tech and service sector positions, is a substantial challenge.

The High Cost of Reshoring

China’s dominance in manufacturing was built on massive, sustained investments, which the U.S. must match if it is to close the gap. Achieving competitiveness in electronics manufacturing would require not just factory construction but substantial investments in workforce development, supply chains, and infrastructure.

This level of investment would require a long-term commitment, politically and fiscally, which has historically been difficult to achieve in the U.S.

Conclusion

While the desire to reshore electronics manufacturing is understandable, the practical realities present immense challenges. China’s advantages in labor, infrastructure, government support, and automation make it a formidable competitor. Rebuilding U.S. manufacturing will take decades and requires unprecedented levels of investment and policy stability.

While targeted initiatives like the CHIPS Act are a step in the right direction, the wholesale reshoring of electronics manufacturing remains a long-term aspiration rather than an immediate possibility. It will take a marathon effort, not a sprint, requiring consistent national commitment and strategic investment.