Can U.S.-made optics remain competitive?
he exodus of manufacturing from the United States to other countries, predominantly to Asia, has been well documented.
he exodus of manufacturing from the United States to other countries, predominantly to Asia, has been well documented. This trend is not confined to low-technology products, such as apparel, textiles, shoes, auto parts, and low-end consumer electronics, in which the labor component represents a significant fraction of the total manufacturing cost. Since 2000, the U.S. has lost 27% of its workforce in computers and electronics. The market dynamics of precision optical components and thin-film coatings echo this trend. As the president of Alpine Research Optics (ARO), a U.S.-based manufacturer, I am confronted with the question, “Can domestically produced optics continue to be competitive with foreign imports?” I believe that the answer to this is “yes,” at least in the high-precision, premium-performance realm in which most of ARO’s products fall.
Many major precision-optics producers based in the U.S. have already developed offshore sources of supply to remain cost competitive. The resulting economies are most pronounced when dealing with less sophisticated, high-volume optics. However, we have found that many of these advantages disappear when applied to high-performance optics. Specifically, I’m referring to laser-grade (10-5 scratch-dig, λ/10 flatness) optics with ultrahigh transmission or reflectivity, minimal scatter, and high damage resistance. Typical applications for these kinds of components are in microlithography steppers, semiconductor metrology equipment, ultraviolet laser-based micromachining systems, and ultrafast laser systems.
Consistently producing optics with the quality necessary for these demanding applications necessitates extremely tight control over incoming substrate and coating materials. It also requires careful management of every fabrication step: handling, cleaning, coating, metrology, and even packaging. If just one of these steps is not executed properly, the optic may superficially pass final QC tests, but still not function correctly in the field, or experience premature failure. All this can be very difficult, and therefore costly, to manage over long distances and through language barriers.
Other factors to consider relate to transferring technology developed in the U.S. to a foreign production facility. Specifically, difficult or challenging thin-film coatings are often designed and prototyped by engineers in the U.S. and, once tested and proven, produced in volume offshore. The problem with this approach is in maintaining performance as well as the physical and lifetime characteristics identical to the initial, domestically produced optics. This is critical because most system builders expect consistency above all else. Once they understand the performance of a given system component, they can accommodate its characteristics, sometimes by making changes in other parts of the system. However, after this process has been completed at the prototype stage, OEMs don’t want to see any significant changes in operational or reliability characteristics from production units.
It is certainly possible to successfully address all these considerations. For example, U.S. personnel can be sent to the foreign factory to train workers and supervise all critical processes, but the cost of this must be factored in. When all these elements are considered, we have not yet found that we can achieve the required quality level from imported optics at any real cost savings over our existing, U.S.-based production.
Unfortunately, inexperienced optics buyers often view optical components as commodities, which can lead to purchasing decisions based on price alone. However, if an optic is in a sealed or difficult-to-reach area within an instrument, servicing it can be costly and time-consuming. Many companies increasingly rely upon a line-replaceable-unit strategy, in which they create modules that can be swapped in and out without handling individual optics. This strategy is tied to up-time performance contracts with their customers, which can have penalty clauses in the tens or hundreds of thousands of dollars.
Because component lifetime and reliability translate directly into lower total cost of ownership, the original cost savings resulting from a lower initial purchase price can be short lived. The dilemma is that, while this argument resonates with many customers on an intellectual basis, it is often the first thing to be disregarded when price negotiations get under way.
Moreover, our experience is that customer awareness of these issues is somewhat tied to the lifecycle of the relationship with that account. Employee turnover can also directly affect this issue. Typically, purchasing agents and engineers who were not present when a new optic was developed and do not recall how difficult it was to produce, do not place as high a value on a given supply relationship and acknowledge the importance of the part to the system.
What all this means is that successful manufacturing in the U.S. requires that companies provide a product that delivers superior value, in terms of lower total cost of ownership, if it is not directly price-competitive with foreign-made goods. In addition, customer relationships must be developed and maintained so that these cost benefits can be clearly communicated and documented.
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