It's tough to compete, but manufacturers can still find success here.

IT almost seems like California and the United States can't compete in manufacturing anymore, with apparel, furniture making and many other low-cost sectors taking huge hits from the Chinese and other developing countries.

Think again.

The U.S. is still the leading manufacturer of semiconductors, complicated computer servers and a variety of other high-tech products that foreign suppliers may have in their sights, without having pulled the trigger.

"If you are high-tech and high-profit you can still manufacture a product here," said Jack Stewart, president of the California Manufacturers and Technology Association.

That analysis also means that California, for all its competitive disadvantages, has some manufacturing bright spots, even compared to other states with lower costs of doing business.

Think biotech and pharmaceuticals. When giant Genentech Inc. decided to build a new plant recently it stayed close to home and constructed a 310,000-square-foot building in Vacaville.

Also strong in the state is the aerospace sector. Industry leader Boeing Co. finds itself with stiff competition, but it comes from the European consortium Airbus Industries, not any developing country.

Not that California can afford to be complacent, even in high-tech and high profit industries. Hewlett-Packard announced last year it was closing a Roseville server and data storage plant and consolidating that manufacturing at a Houston operation.

More disturbing is the Chinese making inroads competing against U.S. high-tech bastions that have not yet felt competition.

Last month 3Com Corp, in Marlborough, Mass. marketed a new communications switching device for corporate customers that undercuts a comparable Cisco System Inc. product in price because it was designed and built in China.

But Justin Bradley, director of economic programs for the Silicon Valley Manufacturing Group, said some of these moves offshore are almost knee-jerk reactions by spooked U.S. manufacturers.

Domestic factories still produce about 75 percent of what is consumed by Americans, with many manufacturers having an advantage in transportation, timeliness and other factors by producing at home.

"If I take advantage of state-of-the-art efficiencies in manufacturing, it changes the relative importance of whether I do it here or there," Bradley said. "When you do the math and apply-world class efficiencies California and the U.S. can compete."