It is an extensive article with substantive data, trends and arguments. The question is not its relevance, but achievability in the current climate of economic reality and trend to globalization. From the perspective of the US power supply industry this will not only be difficult,  but may not be workable. The US power supply industry has "Crossed the Rubicon" a long time ago.

Power supplies are probably one of the first products to migrate its manufacturing from the US to cheaper locations - first to Mexico and then to Asia. Initially this was mainly due to the high direct labor content in magnetics (transformer winding) and manual soldering of varied components. The non-standard nature of these products along with the relatively high labor content made the migration of power supply manufacturing from high cost countries to low cost countries not only attractive but inevitable.

In 1984, the United States produced about 36% of the entire worldwide merchant power supplies in the world. By 2009, twenty five years later, production fell to less than 10% of the total worldwide merchant power supplies. Over the past 25 years, the US production of power supplies declined by 25% - an average of about one percentage point decline per year.  This trend is more startling because many of the formerly captive power supply companies, which included large power supply manufacturing divisions of equipment companies such as IBM and AT&T, turned to the merchant market for their embedded power supplies during that period. Many of these companies no longer have the capacity to manufacture their own power supplies.

Regardless of any incentives or disincentives, this trend is unlikely to change significantly for a number of reasons:

• One of the most important reasons is the rise of Asian power supply companies themselves. Over the past 25 years many Taiwan-based power supply companies, such as Delta, Lite-On, Chicony Power, FSP and Phihong have emerged and are very significant suppliers in the global market. These companies never had any significant US-based manufacturing to begin with, and are unlikely to start such manufacturing unless stringent protectionist measures are undertaken.
• Most electronic equipment manufacturers have also moved their manufacturing operations to Asia and the power supply companies have followed them for easy product shipment and customer service.
  
• Engineering, even analog engineering, is highly valued in Asia and thus manufacturing engineers are easier to find and retain. Relative to its size, the United States graduates very few power engineers and the data suggests that most of these have joined power semiconductor companies and not the power supply companies.

Does that mean that no power supplies are manufactured in the US? That is simply not the case and there are many companies that continue to manufacture power supplies in the US. The most prominent among them is Vicor, which has developed a highly automated state of the art manufacturing facility. Vicor started manufacturing its products in 1984 in Andover, MA and has continued to do so. Interestingly, they have a higher gross margin than most power supply companies that make products in low labor cost areas.  This suggests that gross margin is based not only on the manufacturing location, but also on the company's business model.

In addition to Vicor, SynQor also makes its power supplies, dc-dc converters and ac-dc switchers in Boxborough, MA. Many other power supply manufacturers serve the military power supply markets and, as a group, have not moved to off-shore locations.

Interestingly Power-One recently announced that it was looking for a US site to manufacturer its renewable energy products, mainly PV inverters. This is quite extraordinary in the power supply industry, where most announcements are about closing the US facility and moving to an offshore location, mainly China. However, to date, Power-One is an exception for a US-based company.

So despite Mr. Grove's economic, business, technical and social arguments, it does not appear that wide scale power supply manufacturing will be coming back to the United States. The industry has become Asia-centric.

The views expressed in this article are solely of Mohan Mankikar's alone. They do not represent view of PSMA. Mohan Mankikar has been a part of the power supply industry for over twenty years, has been an active member of PSMA since its founding, and has been on the Board of PSMA and currently acts as an advisor.

Provided by Mohan Mankikar, President, Micro-Tech Consultants

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