Ian King and I spend a lot of time debating the next big boom.
Relocation is the opposite of offshoring. This means that companies bring production and manufacturing “home” to where the company was created.
And I can tell you today that a US relocation boom is upon us!
It’s back to “Made in America”… and this time it’s about technology.
Today, we’re going to look at the accelerating trend in reshoring. As you’ll see, two key industries have already started moving their operations home, and that’s a huge boon for American businesses.
I’ll also share the ticker of a US robotics automation stock that stands to benefit from this relocation revolution.
Finally, I’m going to show you the best way for Ian to invest in an exciting new “convergence” it is the establishment of a phenomenon that only occurs once a decade and which could generate gains ranging from 1,000% to 5,000% over five years.
The great relocation boom is gaining momentum
With the pandemic largely behind us and the flaws of offshoring exposed, US manufacturing is steadily returning to the United States.
A Deloitte survey found that 62% of U.S. manufacturers and nearly half of transportation companies have already started relocation or nearshoring of their production capacities.
In both sectors, more than a quarter of companies would have “explored” the idea.
Deloitte data also showed that U.S. companies likely relocated nearly 350,000 jobs in 2022, up from 260,000 in 2021.
Along with this, transportation and manufacturing companies with more than $500 million in annual revenues expect “a significant portion of cargo from Asia will be routed on or near land to alleviate the challenges of supply chain and improve competitive positioning”.
In fact, according to data from Deloitte, this could reduce the share of shipments from Asia to the United States by 20% by 2025 and 40% by 2030.
This phenomenon is expected to occur at a time when China’s dominance in global trade is expected to decline, with its trade growth dropping from 26% to 13% over the next five years.
So this trend is clearly already at work. But where can we expect to see it the most?
Look no further than the Midwest and Texas.
As this chart shows, manufacturing and transportation executives have high relocation expectations in both regions.
Similar to the Second industrial revolution (Industry 2.0), when America had a technological revolution… we see the same thing happening today in Made in America 2.0.
During Industry 2.0, the use of electricity in production processes was a major invention.
Today, with Made in America 2.0, innovations such as smart factories, automation, robotics and 3D printing allow the United States to manufacture more goods at home.
As the global wars of manufacturing technologies escalate in the digital age, the victor falls to the spoils. The winner will be dominate the global landscape.
But how do you find these winners?
As Ian often tells me: “Hardware eats the world”.
And there is a vital technological hardware component needed to make this relocation revolution a reality… semiconductors.
The brain of modern electronics
To quote the Semiconductor Industry Association (SIA): “Semiconductors are the brains of modern electronics.”
Semiconductors, also called microchips, are an essential component of electronic devices.
Thanks to developments in semiconductor technology, electronic devices have become smaller, faster and more reliable over the past 50 years.
Without semiconductors, we wouldn’t have smartphones, smart TVs, computers, video games, or advanced medical diagnostic equipment.
According to SIA: “A single semiconductor chip has as many transistors as all the stones of the Great Pyramid of Giza, and today there are more than 100 billion integrated circuits in daily use around the world – that’s equal to the number of stars in our corner of the Milky Way galaxy.
“It is truly a modern marvel, a feat of human ingenuity and engineering unmatched by any other industry.”
Fun fact. Did you know that semiconductors were invented in the United States and the United States remains the leader in the design and manufacture of advanced semiconductors?
SIA notes that the semiconductor industry employs more than 250,000 workers in the United States and supports nearly 1.8 million additional jobs in the United States.
Semiconductors are one of the top five US exports, after aircraft, refined petroleum and automobiles.
While the intense competitive nature of the global semiconductor market and the cyclical nature of the semiconductor industry are real, it is imperative that the United States maintain its semiconductor dominance in the digital age.
This is why the Flea and Science Act of 2022a government policy aimed at stimulating American competitiveness and innovation, contributes to reinforcing this American technological domination.
Government policy…innovation…and private funding.
This trio has the potential to offer one of the best investment scenarios of this decade and beyond.
Here is just one company that could benefit from this scenario…
An investment to consider to take advantage of this relocation boom is based in Wisconsin Rockwell Automation (NYSE:ROK).
Rockwell is an American supplier of industrial automation and transformative digital technologies.
The company has invested in research and development, science and technology, and the workforce of the future to help the United States lead the industries of tomorrow.
The company operates globally, but North America accounts for approximately 60% of its revenue.
Its technology and expertise have supported the growth of American manufacturing for 120 years. Specifically, Rockwell has served the semiconductor and high-tech industries for over 30 years.
Rockwell sees the CHIPS Act 2022 as a potential boost for American semiconductor manufacturing.
According to the company, passage of the CHIPS and Science Act of 2022 “paves the way to strengthen the U.S. semiconductor supply chain, supports the growth and diversification of our workforce, and enhances technology development for years to come. ”
The key to this quote is “enhancing technology development for years to come”.
Rockwell is talking about Made in America 2.0 here!
It’s ready for the next generation of local manufacturing and the decoupling of our reliance on China.
And do you know what key investments to make today for that fast approaching future?
For a potentially lucrative, longer-term perspective on what’s happening with fleas and relocation, Do not look any further Extreme Fortunes service.
According to Ian, America is racing to reclaim its place as a chip manufacturing leader, and it’s being propelled by an exciting new convergence of government funding, private investment and innovation.
This is the fourth such convergence that Ian has seen in his career, following the shale, green energy and biotech booms that Ian had anticipated due to this same dynamic.
The United States is pumping a lot of money to bring chip manufacturing back home. We’re talking about a $250 billion business here.
Private investment is also on the rise despite the economic difficulties, and innovation is accelerating exponentially.
So you know it’s a once-a-decade thing that could go up to 1000% to 5000% over five years.
And we tell you here in The edge of the banyanbecause this emergence is happening now.
You can click here now to discover the best ways to invest in this relocation and chip manufacturing revolution in the United States — with three U.S. small-cap stocks poised for outsized gains.
Till next time,amber LancasterDirector of Investment Research, Strategic Fortunes
Disclaimer: We will not track any of the stocks mentioned in The edge of the banyan. We only share our opinions, not advice. If you would like access to our model portfolio stocks with tracking, updates and buy/sell advice, please visit Strategic Fortunes.