Tag Archives: US battery supply chain

The New Opium War: How the World Got Addicted to China

Leave a reply

 A fundamental axiom of economics is that when two individuals or countries trade, both are better off. In the decades after World War II, the U.S. was the world’s largest exporter and economy and as it grew, it imported more, helping its partners. As they grew, they bought more of what the U.S. made. Expanding trade helped everyone specialize, leading to more competition, innovation and choice, and lower costs.

China is now the world’s second-largest economy and its largest exporter, but its philosophy is quite different. It has never believed in balanced trade nor comparative advantage. Even as it imported critical technology from the West, its long-term goal was always self-sufficiency. In 2020, Chinese leader Xi Jinping codified this approach as “dual circulation.” This would, he said, “tighten the international industrial chain’s dependence” on China while ensuring China’s production was “independent” and “self-sustaining.”

And as China expands into high-end manufacturing such as aircraft and semiconductors, Xi has decreed it must not relinquish low-end production such as toys and clothes. Beijing has discouraged Chinese companies that invest abroad from transferring key know-how, such as in the production of iPhones and batteries. Xi has rejected fiscal reforms that would tilt its economy away from investment, exports and saving and toward household consumption and imports.

Excerpt from Greg Ip, World Pays a Price for China’s Growth, WSJ, Dec. 6, 2025

How Does it Feel to Beg China? Netherlands Knows

Leave a reply

Dutch chipmaker Nexperia has publicly called on its China unit to help restore supply chain operations, warning in an open letter published on its website  on November 28, 2025 that customers across industries are reporting “imminent production outages.” Nexperia’s Dutch unit said that is open letter followed “repeated attempts to establish direct communication through conventional channels” but did not have “any meaningful response.” The letter marks the latest twist in a long-running saga that has threatened global automotive supply chains and stoked a bitter battle between Amsterdam and Beijing over technology transfer.

In a statement, Wingtech Technology, Nexperia’s Chinese parent stated that Nexperia’s true intent is to buy time ” to construct a ‘de-China-ized’ supply chain and permanently strip Wingtech of its shareholder rights.”

The situation began in September 2025, when the Dutch government invoked a Cold War-era law to effectively take control of Nexperia. The highly unusual move was reportedly made after the U.S. raised security concerns.

Beijing responded by moving to block its products from leaving China, which, in turn, raised the alarm among global automakers as they faced shortages of the chipmaker’s components.

In an apparent reprieve on November 19, 2025, however, the Dutch government said it had suspended its state intervention at Nexperia following talks with Chinese authorities…But while the measures to seize the Dutch Nexperia subsidiary have been lifted, the restoration of the corporate structure and relation with parent company Wingtech has yet to be accomplished.

Excerpt from Sam Meredith, What’s going on at Nexperia? China’s Wingtech escalates war of words with Dutch chipmaker, CNBC, Nov. 28, 2028

How Boeing Maimed Itself and Killed 346 People

Leave a reply

Spirit AeroSystems is going full circle, from part of Boeing till 2005 to independent supplier in 2005 (when Boeing sold to a private equity firm) and back to part of Boeing in 2024. It is the perfect example of a realization dawning on corporate America: Outsourcing isn’t all it was once cracked up to be. The deal’s logic of vertical reintegration makes sense in light of recent history, with air-travel safety likely benefiting from centralized supervision and a simpler workflow between plants. Yet it is also an indictment of what executives in most industries have been doing for almost three decades….’

At the core of the outsourcing trend that lasted 30 years was the idea that an “asset-light” firm focused on intellectual property and its “core” expertise would be better run. With this mindset, jettisoning aerostructures operations seemed like a no-brainer….
It wasn’t just aerostructures: In the 2000s, Boeing outsourced more than 70% of the 787 Dreamliner program. But the problems with becoming an assembler of planes, as opposed to a true manufacturer, gradually became apparent. The company lost control of supply, resulting in years of delays and cost overruns…

Aerospace isn’t the only industry to revive vertical integration. Intel is beefing up chip manufacturing in the U.S., General Motors is building battery plants and Sweden’s IKEA is acquiring containerships. One general flaw of the asset-light model is that, over time, firms can lose their innovative edge because a lot of “learning by doing” happens when production processes interact. Another is that low-margin bits of the supply chain get worn down to just a few sources. These may not have the financial muscle to make big investments in times of turmoil, or they may be geopolitically sensitive. Such risks were underscored by post-Covid shortages, particularly in the largely “fabless” U.S. microchip industry, which has outsourced chip making to foundries in East Asia in a way that echoes what happened to aerostructures.

Excerpts from Jon Sindreu, Boeing Calls Time on the Great American Outsourcing, July 2, 2024

When Lakes Become a Soup of Minerals: the Fate of Great Salt Lake

Leave a reply

In the summer 2024, a California startup plans to start construction on a project to suck up water from the Great Salt Lake, Utah, United States to extract one of its many valuable minerals: lithium, a critical ingredient in the rechargeable batteries used in electric vehicles. The water will then be reinjected back into the lake, which Lilac Solutions says addresses concerns about the damaging effects of mineral extraction. At its peak, Lilac says it will use a series of pipes to suck up 80,000 gallons of water a minute to harvest the mineral. The company plans to eventually produce up to 20,000 tons of battery-grade lithium a year.

The effort is one of dozens of projects across the U.S. racing to build up a domestic supply of lithium and other battery minerals as the Biden administration is dedicating billions of dollars to strengthening the U.S. battery supply chain and reducing reliance on China, which dominates the global production of battery minerals.

One common extraction method of lithium pumps briny underground water into vast man-made ponds, where evaporation separates lithium from other elements over 18 months or more. Mining companies in Chile and elsewhere have used the approach, which drains scarce water resources and can leave deposits of toxic residues.

Lilac says its technology is much faster, taking a matter of hours from the time of extraction, while preserving water levels. Its method deploys reusable ceramic “beads” that attach to lithium atoms to separate them from the brine.

At the Great Salt Lake, mineral extraction is nothing new. The lake has been shrinking for decades because of agricultural, industrial and other diversions of its feed waters. Extraction of minerals accounts for about 13% of its water diversion, according to a 2019 study. Meanwhile, the lake has become a concentrated soup of minerals, since it doesn’t have an outlet that lets it discharge the ones that flow into it.

Scott Patterson, The Great Salt Lake Is Full of Lithium. A Startup Wants to Harvest It, WSJ, Feb. 12, 2024