The U.S. has lost its industrial commons, particularly in foundational areas like industrial chemistry and component manufacturing, due to restrictive environmental regulations and decades of outsourcing.
China's manufacturing prowess is defined by its deeply integrated ecosystem of engineering talent, R&D leadership in key components, and co-design partnerships, not just low-cost labor.
The current AI data center buildout is a generational, multi-trillion dollar opportunity to onshore advanced manufacturing that the U.S. is currently failing to seize.
Successful high-volume manufacturing by U.S. firms like Apple relies on exporting in-person engineering expertise to manage and co-develop processes directly with foreign partners.
The venture capital-backed model for defense hardware, exemplified by companies like Anduril, has yet to prove it can achieve scaled volume production.
1960s
DiMiko notes that some U.S. consumer goods sectors, like food processing, avoided de-industrialization by automating heavily before the major outsourcing boom began.
Post-2000s
Describes the rise of a sophisticated Chinese contract manufacturing model where partners provide full engineering teams to co-design products, a significant evolution from simple assembly.
Circa 2013
Points to the Apple 'trash can' Mac Pro assembly in Texas as an example of failed reshoring, as its core tooling and dependencies remained in China.
Past Decade
Claims that after nearly 10 years of operation, prominent defense tech company Anduril has yet to achieve volume production for any of its products.
Present
Identifies a massive, ongoing boom in AI data center hardware, which he argues the U.S. is failing to capitalize on to build domestic advanced manufacturing supply chains.
▶The Erosion of US Industrial CapabilityApr 2026
DiMiko argues that the United States has systematically lost its advanced manufacturing base, not just through outsourcing, but through regulatory policies that inhibit foundational industries like industrial chemistry. This has resulted in critical gaps in supply chains for modern technologies like camera modules and AI hardware.
Investors should be cautious about the long-term viability of 'reshoring' initiatives that do not address these foundational gaps in chemical processing, tooling, and component manufacturing.
▶China's Integrated Manufacturing EcosystemApr 2026
DiMiko portrays China's manufacturing dominance as a result of a hyper-competitive ecosystem that integrates engineering, R&D, and supply chain management. Chinese contract manufacturers are no longer just assemblers but full-service engineering partners who co-design products, creating a vast pool of industrial talent.
Companies seeking to build complex hardware should recognize that partnering with Chinese manufacturers offers access to an entire ecosystem of talent and rapid iteration, not just a factory floor.
▶The Apple Model: Exporting Expertise, Not Just DesignsApr 2026
According to DiMiko, Apple's success in manufacturing is due to its practice of deeply embedding its own engineers in partner factories to pioneer and manage processes. The company maintains copies of core process machines in Cupertino for R&D, demonstrating a hands-on approach that goes far beyond sending design files overseas.
The success of complex hardware manufacturing is less about the location of the factory and more about the deep integration of design and process engineering, a capability that is difficult and expensive to replicate.
▶The AI Hardware Opportunity and US ComplacencyApr 2026
DiMiko highlights the massive scale of the current AI data center buildout, with tens of thousands of racks being ordered at millions of dollars each. He argues the U.S. is failing to seize this moment to build domestic supply chains for this critical infrastructure, especially given the lack of tariffs on imported AI hardware.
The current AI boom presents a significant, time-sensitive investment opportunity in hardware manufacturing, but DiMiko's analysis suggests this value capture is happening outside the U.S., posing a strategic risk.