SAN FRANCISCO — President Biden and many lawmakers in Washington are worried these days about computer chips and China’s ambitions with the foundational technology.
But a massive machine sold by a Dutch company has emerged as a key lever for policymakers — and illustrates how any country’s hopes of building a completely self-sufficient supply chain in semiconductor technology are unrealistic.
The machine is made by ASML Holding, based in Veldhoven. Its system uses a different kind of light to define ultrasmall circuitry on chips, packing more performance into the small slices of silicon. The tool, which took decades to develop and was introduced for high-volume manufacturing in 2017, costs more than $150 million. Shipping it to customers requires 40 shipping containers, 20 trucks and three Boeing 747s.
The complex machine is widely acknowledged as necessary for making the most advanced chips, an ability with geopolitical implications. The Trump administration successfully lobbied the Dutch government to block shipments of such a machine to China in 2019, and the Biden administration has shown no signs of reversing that stance.
Congress is debating plans to spend more than $50 billion to reduce reliance on foreign chip manufacturers. Many branches of the federal government, particularly the Pentagon, have been worried about the U.S. dependence on Taiwan’s leading chip manufacturer and the island’s proximity to China.
A study this spring by Boston Consulting Group and the Semiconductor Industry Association estimated that creating a self-sufficient chip supply chain would take at least $1 trillion and sharply increase prices for chips and products made with them.
Moore’s Law, named after Gordon Moore, a co-founder of the chip giant Intel.
In 1997, ASML began studying a shift to usingextreme ultraviolet, or EUV, light. Such light has ultrasmall wavelengths that can create much tinier circuitry than is possible with conventional lithography. The company later decided to make machines based on the technology, an effort that has cost $8 billion since the late 1990s.
The development process quickly went global. ASML now assembles the advanced machines using mirrors from Germany and hardware developed in San Diego that generates light by blasting tin droplets with a laser. Key chemicals and components come from Japan.
a final report to Congress and Mr. Biden in March, the National Security Commission on Artificial Intelligence proposed extending export controls to some other advanced ASMLmachines as well. The group, funded by Congress, seeks to limit artificial intelligence advances with military applications.
Mr. Hunt and other policy experts argued that since China was already using those machines, blocking additional sales would hurt ASML without much strategic benefit. So does the company.
“I hope common sense will prevail,” Mr. van den Brink said.
In the story of how the modern world was constructed, Toyota stands out as the mastermind of a monumental advance in industrial efficiency. The Japanese automaker pioneered so-called Just In Time manufacturing, in which parts are delivered to factories right as they are required, minimizing the need to stockpile them.
Over the last half-century, this approach has captivated global business in industries far beyond autos. From fashion to food processing to pharmaceuticals, companies have embraced Just In Time to stay nimble, allowing them to adapt to changing market demands, while cutting costs.
But the tumultuous events of the past year have challenged the merits of paring inventories, while reinvigorating concerns that some industries have gone too far, leaving them vulnerable to disruption. As the pandemic has hampered factory operations and sown chaos in global shipping, many economies around the world have been bedeviled by shortages of a vast range of goods — from electronics to lumber to clothing.
In a time of extraordinary upheaval in the global economy, Just In Time is running late.
“It’s sort of like supply chain run amok,” said Willy C. Shih, an international trade expert at Harvard Business School. “In a race to get to the lowest cost, I have concentrated my risk. We are at the logical conclusion of all that.”
shortage of computer chips — vital car components produced mostly in Asia. Without enough chips on hand, auto factories from India to the United States to Brazil have been forced to halt assembly lines.
But the breadth and persistence of the shortages reveal the extent to which the Just In Time idea has come to dominate commercial life. This helps explain why Nike and other apparel brands struggle to stock retail outlets with their wares. It’s one of the reasons construction companies are having trouble purchasing paints and sealants. It was a principal contributor to the tragic shortages of personal protective equipment early in the pandemic, which left frontline medical workers without adequate gear.
a shortage of lumber that has stymied home building in the United States.
Suez Canal this year, closing the primary channel linking Europe and Asia.
“People adopted that kind of lean mentality, and then they applied it to supply chains with the assumption that they would have low-cost and reliable shipping,” said Mr. Shih, the Harvard Business School trade expert. “Then, you have some shocks to the system.”
An Idea That Went ‘Way Too Far’
presentation for the pharmaceutical industry. It promised savings of up to 50 percent on warehousing if clients embraced its “lean and mean” approach to supply chains.
Such claims have panned out. Still, one of the authors of that presentation, Knut Alicke, a McKinsey partner based in Germany, now says the corporate world exceeded prudence.
“We went way too far,” Mr. Alicke said in an interview. “The way that inventory is evaluated will change after the crisis.”
Many companies acted as if manufacturing and shipping were devoid of mishaps, Mr. Alicke added, while failing to account for trouble in their business plans.
“There’s no kind of disruption risk term in there,” he said.
Experts say that omission represents a logical response from management to the incentives at play. Investors reward companies that produce growth in their return on assets. Limiting goods in warehouses improves that ratio.
study. These savings helped finance another shareholder-enriching trend — the growth of share buybacks.
In the decade leading up to the pandemic, American companies spent more than $6 trillion to buy their own shares, roughly tripling their purchases, according to a study by the Bank for International Settlements. Companies in Japan, Britain, France, Canada and China increased their buybacks fourfold, though their purchases were a fraction of their American counterparts.
Repurchasing stock reduces the number of shares in circulation, lifting their value. But the benefits for investors and executives, whose pay packages include hefty allocations of stock, have come at the expense of whatever the company might have otherwise done with its money — investing to expand capacity, or stockpiling parts.
These costs became conspicuous during the first wave of the pandemic, when major economies including the United States discovered that they lacked capacity to quickly make ventilators.
“When you need a ventilator, you need a ventilator,” Mr. Sodhi said. “You can’t say, ‘Well, my stock price is high.’”
When the pandemic began, car manufacturers slashed orders for chips on the expectation that demand for cars would plunge. By the time they realized that demand was reviving, it was too late: Ramping up production of computer chips requires months.
stock analysts on April 28. The company said the shortages would probably derail half of its production through June.
The automaker least affected by the shortage is Toyota. From the inception of Just In Time, Toyota relied on suppliers clustered close to its base in Japan, making the company less susceptible to events far away.
‘It All Cascades’
In Conshohocken, Pa., Mr. Romano is literally waiting for his ship to come in.
He is vice president of sales at Van Horn, Metz & Company, which buys chemicals from suppliers around the world and sells them to factories that make paint, ink and other industrial products.
In normal times, the company is behind in filling perhaps 1 percent of its customers’ orders. On a recent morning, it could not complete a tenth of its orders because it was waiting for supplies to arrive.
The company could not secure enough of a specialized resin that it sells to manufacturers that make construction materials. The American supplier of the resin was itself lacking one element that it purchases from a petrochemical plant in China.
One of Mr. Romano’s regular customers, a paint manufacturer, was holding off on ordering chemicals because it could not locate enough of the metal cans it uses to ship its finished product.
“It all cascades,” Mr. Romano said. “It’s just a mess.”
No pandemic was required to reveal the risks of overreliance on Just In Time combined with global supply chains. Experts have warned about the consequences for decades.
In 1999, an earthquake shook Taiwan, shutting down computer chip manufacturing. The earthquake and tsunami that shattered Japan in 2011 shut down factories and impeded shipping, generating shortages of auto parts and computer chips. Floods in Thailand the same year decimated production of computer hard drives.
Each disaster prompted talk that companies needed to bolster their inventories and diversify their suppliers.
Each time, multinational companies carried on.
The same consultants who promoted the virtues of lean inventories now evangelize about supply chain resilience — the buzzword of the moment.
Simply expanding warehouses may not provide the fix, said Richard Lebovitz, president of LeanDNA, a supply chain consultant based in Austin, Texas. Product lines are increasingly customized.
“The ability to predict what inventory you should keep is harder and harder,” he said.
Ultimately, business is likely to further its embrace of lean for the simple reason that it has yielded profits.
“The real question is, ‘Are we going to stop chasing low cost as the sole criteria for business judgment?’” said Mr. Shih, from Harvard Business School. “I’m skeptical of that. Consumers won’t pay for resilience when they are not in crisis.”
When Jeffrey Epstein gave The Times columnist James Stewart a tour of his apartment a few years ago, he boasted of his expansive Rolodex of billionaires — and the dirt he had on them. A year and a half after the financier’s death by suicide in a New York jail, the fallout for those in the registered sex offender’s orbit, and increasingly those a step or two removed from it, continues to spread.
For example, the latest management reshuffle at Apollo, as we reported yesterday, can be linked back to Epstein. Tracing all the resignations and reshuffles directly and indirectly tied to the scandal will take a while (we’re working on it), but here’s a tally of some so far:
The Apollo co-founder Leon Black said in January that he would resign as C.E.O. but stay on as chairman, after an internal inquiry found he had paid $158 million to Epstein for tax advice. He unexpectedly quit both posts in March, and later stepped down as chairman of the Museum of Modern Art. Josh Harris, a fellow co-founder who had unsuccessfully pushed Black to quit immediately, said yesterday that he was stepping back from Apollo after failing to become the next C.E.O.; Marc Rowan, Apollo’s third co-founder and Black’s pick as successor, now leads the firm.
When the details of meetings between Epstein and Bill Gates burst into public view in late 2019, the billionaire’s wife, Melinda French Gates, hired divorce lawyers. The couple’s split, announced this month, could upend their numerous investments and philanthropic ventures
Les Wexner announced last February that he would step down as C.E.O. of the Victoria’s Secret parent company L Brands, under pressure from multiple internal investigations about his close ties to Epstein. Earlier this year, he and his wife, Abigail Wexner, said they would not stand for re-election to the L Brands board this month. (The company is now in the process of spinning off Victoria’s Secret.) Mr. Wexner was Epstein’s biggest early client and, a Times investigation found, the original source of the financier’s wealth.
Prince Andrew of Britain gave up his public duties last November, days after a disastrous interview with the BBC centered on his relationship with Epstein. At least 47 charities and nonprofits of which he was a patron have since cut ties to the prince.
Joi Ito resigned as the director of the M.I.T. Media Lab, a prominent research group, in 2019 and as member of several corporate boards (including The New York Times Co.), after acknowledging that he had received $1.7 million in investments from Epstein.
Alexander Acosta resigned as Donald Trump’s labor secretary in 2019, amid criticism of his handling of a 2008 sex crimes case against Epstein when he was a federal prosecutor in Miami.
HERE’S WHAT’S HAPPENING
Morgan Stanley sets up its C.E.O. succession competition. The Wall Street firm gave new roles to four top executives, marking them as candidates to take over from James Gorman: Ted Pick and Andy Saperstein were named co-presidents; Jonathan Pruzan was named C.O.O.; and Dan Simkowitz was named co-head of strategy with Pick.
The U.S. endorses a global minimum tax of at least 15 percent. The proposal, which was lower than some had expected, is closely tied to the Biden administration’s plans to raise the corporate tax rate. Global coordination would discourage multinationals from shifting to tax havens overseas.
Treasury officials said they could capture at least $700 billion in additional revenue. That would involve hiring 5,000 new I.R.S. agents, imposing new rules on reporting crypto transactions and other measures.
U.S. customs officials block a Uniqlo shipment over Chinese forced labor concerns. Agents at the Port of Los Angeles acted under an order prohibiting imports of cotton items produced in the Xinjiang region.
U.S. steel prices are soaring. After years of job losses and mill closures, American steel producers have enjoyed a reversal of fortune: Nucor, for instance, is the year’s top-performing stock in the S&P 500. Credit goes to industry consolidation, a recovering economy and Trump-era tariffs. Unsurprisingly, steel consumers aren’t thrilled about it.
Oprah Winfrey to Blackstone, made its stock market debut yesterday, ending its first trading session with a valuation of about $13 billion. DealBook spoke with Oatly’s C.E.O., Toni Petersson, about the I.P.O. and what’s next for the company.
resignation letter offering both praise of SoftBank’s chief, Masa Son — and unusually pointed criticism of the company’s corporate governance.
Going out vs. staying in, charted
It’s been a while since we checked in on an alternative indicator of pandemic economic activity: the share price ratio of Clorox to Dave & Buster’s.
Wait, what? Nick Mazing, the director of research at the data provider Sentieo, came up with that metric to gauge the openness of the economy. The higher Clorox’s share price rises relative to Dave & Buster’s, the more people appear to be staying home and disinfecting everything than going out to crowded bars. By this measure, conditions have nearly returned to prepandemic levels — indeed, Dave & Buster’s recently lifted its sales forecast, as nearly all of its beer-and-arcade bars have reopened.
packed concert schedule, selling tickets to people who may have already binge-watched all of “Below Deck.” The second, however, suggests that people aren’t as eager to get back to huffing and puffing at the gym as they are content to exercise at home. As restrictions lift and people feel safer in crowds, drinking and dancing appear to be higher priorities.
new book, “Noise: A Flaw in Human Judgment,” the Princeton psychology professor and Nobel laureate Daniel Kahneman, along with co-authors Olivier Sibony and Cass Sunstein, argue that these inconsistencies have enormous and avoidable consequences. Kahneman spoke to DealBook about how to hone judgment and reduce noise.
DealBook: What is “noise” in this context?
Kahneman: It’s unwanted and unpredictable variability in judgments about the same situations. Some decisions and solutions are better than others and there are situations where everyone should be aiming at the same target.
Can you give some examples?
A basic example is the criminal justice system, which is essentially a machine for producing sentences for people convicted of crimes. The punishments should not be too different for the same crime yet sentencing turns out to depend on the judge and their mood and characteristics. Similarly, doctors looking at the same X-ray should not be reaching completely different conclusions.
How do individuals or institutions detect this noise?
You detect noise in a set of measurements and can run an experiment. Present underwriters with the same policy to evaluate and see what they say. You don’t want a price so high that you don’t get the business or one so low that it represents a risk. Noise costs institutions. One underwriter’s decision about one policy will not tell you about variability. But many underwriters’ decisions about the same cases will reveal noise.
WSJ)
An arm of Goldman Sachs has raised $3 billion from clients to invest in later-stage start-ups. (WSJ)
SPACs have raised $100 billion this year through May 19, a record, but new fund listings dropped sharply last month. (Insider)
Politics and policy
President Biden issued an executive order directing government agencies to expand efforts to analyze and mitigate the economic risks tied to climate change. (Axios)
“As Paycheck Protection Program Runs Dry, Desperation Grows” (NYT)
CNN said the prime-time host Chris Cuomo inappropriately advised his brother, Gov. Andrew Cuomo of New York, on how to respond to sexual harassment allegations. (NYT)
Tech
Paul Romer was one of the tech industry’s favorite economists; now he is criticizing Silicon Valley giants for being too big. (NYT)
Amazon was recently pushed to ban prominent electronics accessory makers by the F.T.C. over fake-review schemes. (Recode)
Best of the rest
Bill Gates and Warren Buffett got more than 200 billionaires to pledge half their wealth to charity. Some are falling short, but still getting massive tax breaks. (Insider)
FIFA, the global soccer governing body, secretly considered supporting the European Super League, before reconsidering amid public outcry about the now-failed competition. (NYT)
Five questions to ask before you panic about inflation. (NYT)
We’d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com.
Retail sales were flat last month after a buoyant March, the Commerce Department said on Friday, as Americans continued spending their latest round of government stimulus checks.
The pace for April was a slowdown from the prior month, when retail sales rose by 10.7 percent, as vaccinations increased and people became more comfortable outside their homes, spending more money on clothing, restaurants, bars and sporting goods. Retail sales, which experienced record drops just over a year ago at the onset of the pandemic, have been closely watched as monthly gauges of the health of the economy and the mind-set of consumers.
job growth slowed in April, a surprise to many economists, while the jobless rate rose slightly to 6.1 percent. The data served as a reminder of the fitful economic recovery and that stimulus money can only go so far.
“Labor market income will become increasingly important in sustaining consumer confidence and spending over the coming months,” the Morgan Stanley economists wrote in a May 7 note.
Retail sales increased in April in categories including restaurants and bars, which posted a 3 percent gain, as well as electronics and appliance stores and grocery stores. Declines were seen in a broad array of categories, including apparel, gas stations, sporting goods and book stores and department stores.
Still, the broader picture is sunny compared with April 2020. Spending at clothing and accessories stores was up more than 700 percent last month, compared with a year earlier, while furniture and home furnishing stores had gone up nearly 200 percent — staggering figures that were a reminder of just how devastating the pandemic was to many parts of the retail industry.
“What we need to remember is retail sales went up a crazy amount in March because of the stimulus, and it’s kind of like they’re stuck up there, so that’s good,” Mr. Frick said. “That means people have continued spending at that high rate.”
Patricia Fahy, a New York State legislator, celebrated when a new development project for the Port of Albany — the country’s first assembly plant dedicated to building offshore wind towers — was approved in January.
“I was doing cartwheels,” said Ms. Fahy, who represents the area.
Before long, however, she was caught in a political bind.
A powerful union informed her that most of the equipment for New York’s big investment in offshore windmills would not be built by American workers but would come from abroad. Yet when Ms. Fahy proposed legislation to press developers to use locally made parts, she met opposition from environmentalists and wind industry officials. “They were like, ‘Oh, God, don’t cause us any problems,’” she recalled.
Since President Biden’s election, Democratic politicians have extolled the win-win allure of the transition from fossil fuels, saying it can help avert a looming climate crisis while putting millions to work. “For too long we’ve failed to use the most important word when it comes to meeting the climate crisis: jobs, jobs, jobs,” Mr. Biden said in an address to Congress last month.
final approval of the nation’s first large-scale offshore wind project on Tuesday, called it an important step to “create good-paying union jobs while combating climate change.”
But there is a tension between the goals of industrial workers and those of environmentalists — groups that Democrats count as politically crucial. The greater the emphasis on domestic manufacturing, the more expensive renewable energy will be, at least initially, and the longer it could take to meet renewable-energy targets.
That tension could become apparent as the White House fleshes out its climate agenda.
“It’s a classic trade-off,” said Anne Reynolds, who heads the Alliance for Clean Energy New York, a coalition of environmental and industry groups. “It would be better if we manufactured more solar panels in the U.S. But other countries invested public money for a decade. That’s why it’s cheaper to build them there.”
There is some data to support the contention that climate goals can create jobs. The consulting firm Wood Mackenzie expects tens of thousands of new jobs per year later this decade just in offshore wind, an industry that barely exists in the United States today.
And labor unions — even those whose members are most threatened by the shift to green energy, like mineworkers — increasingly accept this logic. In recent years, many unions have joined forces with supporters of renewable energy to create groups with names like the BlueGreen Alliance that press for ambitious jobs and climate legislation, in the vein of the $2.3 trillion proposal that Mr. Biden is calling the American Jobs Plan.
recent report by the Center for Strategic and International Studies and BloombergNEF, an energy research group.
Batteries for electric vehicles, their most valuable component, follow a similar pattern, the report found. And there is virtually no domestic supply chain specifically for offshore wind, an industry that Mr. Biden hopes to see grow from roughly a half-dozen turbines in the water today to thousands over the next decade. That supply chain is largely in Europe.
Many proponents of a greener economy say that importing equipment is not a problem but a benefit — and that insisting on domestic production could raise the price of renewable energy and slow the transition from fossil fuels.
“It is valuable to have flexible global supply chains that let us move fast,” said Craig Cornelius, who once managed the Energy Department’s solar program and is now chief executive of Clearway Energy Group, which develops solar and wind projects.
Those emphasizing speed over sourcing argue that most of the jobs in renewable energy will be in the construction of solar and wind plants, not making equipment, because the manufacturing is increasingly automated.
But labor groups worry that construction and installation jobs will be low paying and temporary. They say only manufacturing has traditionally offered higher pay and benefits and can sustain a work force for years.
Partisans of manufacturing also point out that it often leads to jobs in new industries. Researchers have shown that the migration of consumer electronics to Asia in the 1960s and ’70s helped those countries become hubs for future technologies, like advanced batteries.
thousands of employees in recent decades.
Around the same time, the state was close to approving bids for two major offshore wind projects. The eventual winner, a Norwegian developer, Equinor, promised to help bring a wind-tower assembly plant to New York and upgrade a port in Brooklyn.
“All of a sudden I focus on the fact that we’re talking about wind manufacturing,” said Bob Master, the communications workers official who contacted Ms. Fahy, the state legislator. “G.E. makes turbines — there could be a New York supply chain. Let’s give it a try.”
more offshore wind turbines than any other country by the start of this year but had manufactured only a small portion of the equipment.
2017 report indicated that the country manufactured well below 30 percent of its offshore wind equipment, and Mr. Roberts said the percentage had probably increased slightly since then. The country currently manufactures blades but no nacelles.
All of which leaves the Biden administration with a difficult choice: If it genuinely wants to shift manufacturing to the United States, doing so could require some aggressive prodding. A senior White House official said the administration was exploring ways of requiring that a portion of wind and solar equipment be American-made when federal money was involved.
But some current and former Democratic economic officials are skeptical of the idea, as are clean-energy advocates.
“I worry about local content requirements for offshore wind from the federal government right now,” said Kathleen Theoharides, the Massachusetts secretary of energy and environmental affairs. “I don’t think adding anything that could potentially raise the cost of clean energy to the ratepayer is necessarily the right strategy.”
Mr. Master said the recent legislation in New York was a victory given the difficulty of enacting stronger domestic content policies at the state level, but acknowledged that it fell short of his union’s goals. Both he and Ms. Fahy vowed to keep pressing to bring more offshore wind manufacturing jobs to New York.
“I could be the queen of lost causes, but we want to get some energy around this,” Ms. Fahy said. “We need this here. I’m not just saying New York. This is a national conversation.”
Patricia Fahy, a New York State legislator, celebrated when a new development project for the Port of Albany — the country’s first assembly plant dedicated to building offshore wind towers — was approved in January.
“I was doing cartwheels,” said Ms. Fahy, who represents the area.
Before long, however, she was caught in a political bind.
A powerful union informed her that most of the equipment for New York’s big investment in offshore windmills would not be built by American workers but would come from abroad. Yet when Ms. Fahy proposed legislation to press developers to use locally made parts, she met opposition from environmentalists and wind industry officials. “They were like, ‘Oh, God, don’t cause us any problems,’” she recalled.
Since President Biden’s election, Democratic politicians have extolled the win-win allure of the transition from fossil fuels, saying it can help avert a looming climate crisis while putting millions to work. “For too long we’ve failed to use the most important word when it comes to meeting the climate crisis: jobs, jobs, jobs,” Mr. Biden said in an address to Congress last month.
final approval of the nation’s first large-scale offshore wind project on Tuesday, called it an important step to “create good-paying union jobs while combating climate change.”
But there is a tension between the goals of industrial workers and those of environmentalists — groups that Democrats count as politically crucial. The greater the emphasis on domestic manufacturing, the more expensive renewable energy will be, at least initially, and the longer it could take to meet renewable-energy targets.
That tension could become apparent as the White House fleshes out its climate agenda.
“It’s a classic trade-off,” said Anne Reynolds, who heads the Alliance for Clean Energy New York, a coalition of environmental and industry groups. “It would be better if we manufactured more solar panels in the U.S. But other countries invested public money for a decade. That’s why it’s cheaper to build them there.”
There is some data to support the contention that climate goals can create jobs. The consulting firm Wood Mackenzie expects tens of thousands of new jobs per year later this decade just in offshore wind, an industry that barely exists in the United States today.
And labor unions — even those whose members are most threatened by the shift to green energy, like mineworkers — increasingly accept this logic. In recent years, many unions have joined forces with supporters of renewable energy to create groups with names like the BlueGreen Alliance that press for ambitious jobs and climate legislation, in the vein of the $2.3 trillion proposal that Mr. Biden is calling the American Jobs Plan.
recent report by the Center for Strategic and International Studies and BloombergNEF, an energy research group.
Batteries for electric vehicles, their most valuable component, follow a similar pattern, the report found. And there is virtually no domestic supply chain specifically for offshore wind, an industry that Mr. Biden hopes to see grow from roughly a half-dozen turbines in the water today to thousands over the next decade. That supply chain is largely in Europe.
Many proponents of a greener economy say that importing equipment is not a problem but a benefit — and that insisting on domestic production could raise the price of renewable energy and slow the transition from fossil fuels.
“It is valuable to have flexible global supply chains that let us move fast,” said Craig Cornelius, who once managed the Energy Department’s solar program and is now chief executive of Clearway Energy Group, which develops solar and wind projects.
Those emphasizing speed over sourcing argue that most of the jobs in renewable energy will be in the construction of solar and wind plants, not making equipment, because the manufacturing is increasingly automated.
But labor groups worry that construction and installation jobs will be low paying and temporary. They say only manufacturing has traditionally offered higher pay and benefits and can sustain a work force for years.
Partisans of manufacturing also point out that it often leads to jobs in new industries. Researchers have shown that the migration of consumer electronics to Asia in the 1960s and ’70s helped those countries become hubs for future technologies, like advanced batteries.
thousands of employees in recent decades.
Around the same time, the state was close to approving bids for two major offshore wind projects. The eventual winner, a Norwegian developer, Equinor, promised to help bring a wind-tower assembly plant to New York and upgrade a port in Brooklyn.
“All of a sudden I focus on the fact that we’re talking about wind manufacturing,” said Bob Master, the communications workers official who contacted Ms. Fahy, the state legislator. “G.E. makes turbines — there could be a New York supply chain. Let’s give it a try.”
more offshore wind turbines than any other country by the start of this year but had manufactured only a small portion of the equipment.
2017 report indicated that the country manufactured well below 30 percent of its offshore wind equipment,and Mr. Roberts said the percentage had probably increased slightly since then. The country currently manufactures blades but no nacelles.
All of which leaves the Biden administration with a difficult choice: If it genuinely wants to shift manufacturing to the United States, doing so could require some aggressive prodding. A senior White House official said the administration was exploring ways of requiring that a portion of wind and solar equipment be American-made when federal money was involved.
But some current and former Democratic economic officials are skeptical of the idea, as are clean-energy advocates.
“I worry about local content requirements for offshore wind from the federal government right now,” said Kathleen Theoharides, the Massachusetts secretary of energy and environmental affairs. “I don’t think adding anything that could potentially raise the cost of clean energy to the ratepayer is necessarily the right strategy.”
Mr. Master said the recent legislation in New York was a victory given the difficulty of enacting stronger domestic content policies at the state level, but acknowledged that it fell short of his union’s goals. Both he and Ms. Fahy vowed to keep pressing to bring more offshore wind manufacturing jobs to New York.
“I could be the queen of lost causes, but we want to get some energy around this,” Ms. Fahy said. “We need this here. I’m not just saying New York. This is a national conversation.”
jobs report Friday morning. Forecasters surveyed by Bloomberg estimate that payrolls grew by 978,000 last month and that the unemployment rate fell to 5.8 percent from 6 percent.
As coronavirus infections ebb, vaccinations spread, restrictions lift and businesses reopen, the labor market has been healing. The March gain, subject to revision on Friday, was 916,000.
“Recovery in employment will come in fits and starts,” said Diane Swonk, chief economist at the accounting firm Grant Thornton. “But we’re going to see a lot of strong gains this year.”
Mall traffic has picked up, Ms. Swonk said, but manufacturing may be hobbled by bottlenecks in the supply chain. Restaurants, hotels and travel are coming back online, she said, but it is unclear whether the job increases in those industries will exceed the seasonal gains typical at this time of year.
The economy still has a lot of ground to recover before returning to prepandemic levels. In March, there were roughly 8.4 million fewer jobs than in February 2020, and the labor force has shrunk.
Employers, particularly in the restaurant and hospitality industry, have reported scant response to help-wanted ads. Several have blamed what they call overly generous government jobless benefits, including a temporary $300-a-week federal stipend that was part of an emergency pandemic relief program.
But the most solid evidence of a real shortage of workers, many economists say, would be rising wages. And that is not happening in a sustained way. As Jerome H. Powell, the Federal Reserve chair, said at a news conference last week: “We don’t see wages moving up yet. And presumably we would see that in a really tight labor market.”
Millions of Americans have said that health concerns and child care responsibilities — with many schools and day care centers not back to normal operations — have kept them from returning to work. Millions of others who are not actively job hunting are considered on temporary layoff and expect to be hired back by their previous employers once more businesses reopen fully.
The good news, said Robert Rosener, a senior U.S. economist at Morgan Stanley, is that the choppiness in the labor market that results from successive rounds of openings and closings seems to be easing. “People are going back to work and are more likely to stay at work,” he said.
Employers say supplemental unemployment benefits are making it difficult to hire. But some former food-service workers are shifting to warehouse jobs or work-from-home positions.Credit…Sarah Rice for The New York Times
This week the Republican governors of Montana and South Carolina said they planned to cut off federally funded pandemic unemployment assistance at the end of June, citing complaints by employers about severe labor shortages.
That means jobless workers there will no longer get a $300-a-week federal supplement to state benefits, and the states will abandon a pandemic program that helps freelancers and others who don’t qualify for state unemployment insurance. (Montana will, however, offer a $1,200 bonus for those taking jobs.)
“What was intended to be short-term financial assistance for the vulnerable and displaced during the height of the pandemic has turned into a dangerous federal entitlement, incentivizing and paying workers to stay at home,” declared Gov. Henry McMaster of South Carolina.
But that view is just one piece of a broad debate about the impact of temporarily enhanced unemployment benefits during the pandemic.
Gail Myer, whose family owns six hotels in Branson, Mo., says the $300-supplement is indeed a barrier to hiring. “I talk to people all over the country on a regular basis in the hospitality industry, and the No. 1 topic of discussion is shortage of labor,” he said.
Before the pandemic, Mr. Myer said, there were about 150 full-time employees at his six hotels. Now, staffing is down about 15 percent, he said. Jobs at Myer Hospitality for housekeepers, breakfast attendants and receptionists are advertised as paying $12.75 to $14 an hour, plus benefits and a $500 signing bonus.
Worker advocacy groups offer a different perspective. “The shortage of restaurant workers we are seeing across the country is not a labor-shortage problem; it’s a wage-shortage problem,” said Saru Jayaraman, president of One Fair Wage, a minimum-wage advocacy group.
In surveys of food service workers by One Fair Wage and the Food Labor Research Center at the University of California, Berkeley, three-quarters cited low wages and tips as the reason for leaving their jobs since the coronavirus outbreak. Fifty-five percent mentioned concerns about Covid-19 as a factor. And nearly 40 percent cited increased hostility and harassment from customers, often related to wearing masks, in addition to long-running complaints of sexual harassment.
Amy Glaser, senior vice president at the staffing firm Adecco, said former restaurant workers and others were migrating toward warehousing jobs that had raised wages to as high as $23 an hour and customer service jobs that could be done from home.
Whether the U.S. depends on open pit mines or a more environmentally friendly option called lithium brine extraction will depend on how successful groups are in blocking projects.Credit…Gabriella Angotti-Jones for The New York Times
The United States needs to quickly find new supplies of lithium as automakers ramp up manufacturing of electric vehicles.
Lithium is used in electric car batteries because it is lightweight, can store lots of energy and can be repeatedly recharged. Other ingredients like cobalt are needed to keep the battery stable.
But production of raw materials like lithium, cobalt and nickel that are essential to these technologies are often ruinous to land, water, wildlife and people, Ivan Penn and Eric Lipton report for The New York Times. Mining is one of the dirtiest businesses out there.
That environmental toll has often been overlooked in part because there is a race underway among the United States, China, Europe and other major powers. Echoing past contests and wars over gold and oil, governments are fighting for supremacy over minerals that could help countries achieve economic and technological dominance for decades to come.
Mining companies and related businesses want to accelerate domestic production of lithium and are pressing the administration and key lawmakers to insert a $10 billion grant program into President Biden’s infrastructure bill, arguing that it is a matter of national security.
“Right now, if China decided to cut off the U.S. for a variety of reasons we’re in trouble,” said Ben Steinberg, an Obama administration official turned lobbyist. He was hired in January by Piedmont Lithium, which is working to build an open-pit mine in North Carolina and is one of several companies that have created a trade association for the industry.
So far, the Biden administration has not moved to help push more environmentally friendly options — like lithium brine extraction, instead of open pit mines. Ultimately, federal and state officials will decide which of the two methods is approved. Both could take hold. Much will depend on how successful environmentalists, tribes and local groups are in blocking projects.
Investors have put more than $475 million into Cerebras, a start-up that makes artificial-intelligence processors.Credit…Jessica Chou for The New York Times
Even as a chip shortage is causing trouble for all sorts of industries, the semiconductor field is entering a surprising new era of creativity, from industry giants to innovative start-ups seeing a spike in funding from venture capitalists that traditionally avoided chip makers, Don Clark reports for The New York Times.
“It’s a bloody miracle,” said Jim Keller, a veteran chip designer whose résumé includes stints at Apple, Tesla and Intel and who now works at the artificial intelligence chip start-up Tenstorrent. “Ten years ago you couldn’t do a hardware start-up.”
Chip design teams are no longer working just for traditional chip companies, said Pierre Lamond, a 90-year-old venture capitalist who joined the chip industry in 1957. “They are breaking new ground in many respects,” he said.
Equity investors for years viewed semiconductor companies as too costly to set up, but in 2020 they plowed more than $12 billion into 407 chip-related companies, according to CB Insights. Cerebras, a start-up that sells massive artificial-intelligence processors that span an entire silicon wafer, for example, has attracted more than $475 million. Groq, a start-up whose chief executive previously helped design an artificial-intelligence chip for Google, has raised $367 million.
Taiwan Semiconductor Manufacturing Company and Samsung Electronics have managed the increasingly difficult feat of packing more transistors on each slice of silicon. IBM on Thursday announced another leap in miniaturization, a sign of continued U.S. prowess in the technology race.
More companies are concluding that software running on standard Intel-style microprocessors is not the best solution for all problems. Giants like Apple, Amazon and Google more recently have gotten into the act. Google’s YouTube unit recently disclosed its first internally developed chip to speed video encoding. And Volkswagen said last week that it would develop its own processor to manage autonomous driving.
Even as a chip shortage is causing trouble for all sorts of industries, the semiconductor field is entering a surprising new era of creativity, from industry giants to innovative start-ups seeing a spike in funding from venture capitalists that traditionally avoided chip makers, Don Clark reports for The New York Times.
“It’s a bloody miracle,” said Jim Keller, a veteran chip designer whose résumé includes stints at Apple, Tesla and Intel and who now works at the artificial intelligence chip start-up Tenstorrent. “Ten years ago you couldn’t do a hardware start-up.”
Chip design teams are no longer working just for traditional chip companies, said Pierre Lamond, a 90-year-old venture capitalist who joined the chip industry in 1957. “They are breaking new ground in many respects,” he said.
Equity investors for years viewed semiconductor companies as too costly to set up, but in 2020 they plowed more than $12 billion into 407 chip-related companies, according to CB Insights. Cerebras, a start-up that sells massive artificial-intelligence processors that span an entire silicon wafer, for example, has attracted more than $475 million. Groq, a start-up whose chief executive previously helped design an artificial-intelligence chip for Google, has raised $367 million.
Taiwan Semiconductor Manufacturing Company and Samsung Electronics have managed the increasingly difficult feat of packing more transistors on each slice of silicon. IBM on Thursday announced another leap in miniaturization, a sign of continued U.S. prowess in the technology race.
More companies are concluding that software running on standard Intel-style microprocessors is not the best solution for all problems. Giants like Apple, Amazon and Google more recently have gotten into the act. Google’s YouTube unit recently disclosed its first internally developed chip to speed video encoding. And Volkswagen said last week that it would develop its own processor to manage autonomous driving.
“It’s a bloody miracle,” said Jim Keller, a veteran chip designer whose résumé includes stints at Apple, Tesla and Intel and who now works at the A.I. chip start-up Tenstorrent. “Ten years ago you couldn’t do a hardware start-up.”
The trends are not necessarily good news for chip customers, at least for the short term. Scarce supplies of many chips have manufacturers scrambling to increase production, and are adding to worries in Washington about reliance on foreign suppliers. Extra demand could extend the shortages, which are already expected to last into 2022.
High demand was evident in earnings for chip companies last quarter, which ended in March. Revenue grew 27 percent, for example, at NXP Semiconductors, a big maker of auto, communications and industrial chips, even though it temporarily closed two Texas factories because of a cold snap.
The industry has historically been notorious for booms and busts, usually driven by purchasing swings for particular products like PCs and smartphones. Global chip revenue slumped 12 percent in 2019 before bouncing back with 10 percent growth last year, according to estimates from Gartner, a research firm.
But there is widening optimism that the cycles should moderate because chips are now used in so many things. Philip Gallagher, chief executive of the big electronics distributor Avnet, cited examples like sensors to track dairy cows, the flow of beer taps and utility pipes, and the temperature of produce. And the number of chips in mainstay products like cars and smartphones keeps rising, he and other executives say.
“This is a lasting growth cycle, not a short spike,” said Kurt Sievers, NXP’s chief executive.
A longtime industry watcher, Handel Jones, who heads the consultancy International Business Strategies, sees total chip revenues rising steadily to $1.2 trillion by 2030 from roughly $500 billion this year.
Ceilings are not overlooked. Freeing up valuable floor space, monitors are often affixed to ceiling-mounted booms, which can have several arms and may also serve as a conduit for gases needed for anesthesia. Ultraviolet cleaning systems, which eliminate bacteria and viruses, can be anchored in the ceilings, to assist with disinfection. And the space above the ceiling is often larger to house a range of cables and other electronic equipment, in addition to ductwork with sophisticated air filtration systems.
Access to the space above the ceiling, as well as behind the walls, has become important, so that any technical problems can be investigated and remedied within hours, rather than shutting a room down for lengthy repairs. Some hospitals, for example, are now considering stainless steel prefabricated wall systems for their surgical suites because they are both easier to clean and easier to take out if the electronics hidden behind break, Ms. Saba said.
Other important factors are lighting and noise. When it comes to increasingly common laparoscopic surgery, monitors that guide surgeons are lit but overhead lights may be turned off to reduce glare, Dr. Hawn said.
That “can be somewhat dangerous because it can be quite dark and people run into things or trip over things,” she added. “We now have green lighting, which allows us to be able to see a sharp image on the monitors without the glare that you get from the white light.”
Noise is distracting at best, but with physical repercussions, like hypertension, especially for staff exposed for long periods. High decibel levels are “associated with increased difficulty in communication, which is the largest source of preventable errors in the hospital environment,” John Medina, an affiliate associate professor at the University of Washington department of bioengineering, said in an email.
At the Loma Linda University Medical Center in California, which is expected to open a new hospital on its campus this year, the operating room walls are built to mitigate outside noise as well as vibrations, and air duct silencers are being used as well, said Allison Ong, the head of campus transformation.
