As noted earlier, U.S.-based manufacturing now accounts for a smaller share of global manufacturing value added than 20 years ago. The drive for competitiveness and increased shareholder value has caused corporations in nearly every area of photonics to search for alternative manufacturing locations. The exception may be products that have substantial defense-related markets and applications and that therefore are subject to controls over their export (International Traffic in Arms Regulations, ITAR). But government licensing has allowed “offshoring” for some components in this product field as well. During the same period, however, some components continue to be manufactured in the United States and have remained competitive. What distinguishes the components and final assemblies whose production has remained in the United States from those now produced mainly offshore?
A critical factor affecting the location of production is volume. Typically, high-volume production operations are more sensitive to labor and capital cost differentials, and these activities have been among the most likely to move offshore from the United States in photonics and other high-technology products. In photonics, as in other high-technology industries, high-volume production operations are most common in consumer products, and low-volume operations range from the production of test lots to the manufacture of specialized systems.
Advances in optical materials and processing have enabled the manufacture of precision optical components for very low cost with sufficient volume to amortize the required tooling. One example is the mass production of molded polymer aspheres. Their unit costs can be very low as long as the volume is sufficiently high. Low-volume production of these components, however, tends to be expensive because of the large amounts of labor and time required to manufacture and test precision tools. Even when advanced capabilities are used in a highly automated manufacturing process, the cost of the equipment coupled with low volume drives production costs up significantly. Recent advances in several manufacturing capabilities, such as different methods of additive manufacturing, hold out considerable promise for the development of low-cost machines capable of providing precision optics, with surface figures not restricted to the narrow range of surfaces possible with current grinding and finishing techniques. In addition to providing a new set of potential optical surface figures and the associated capabilities, these advances may enable low-cost precision optics even for low-volume applications and thereby remove much of the benefit of moving optics manufacturing overseas by minimizing the impact of labor costs on the optics. Photonics-enabled advances in manufacturing technology thus could slow the erosion, or perhaps support renewed growth, in U.S.-based manufacturing activity.