Motherboard Makers Are Moving Manufacturing Out of China

AlphaAtlas

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According to Digitimes Research, Taiwanese server motherboard manufacturers are accelerating plans to move production out of mainland China. Thanks to a trade war between China and the U.S, the companies were already on their way out, but a report by Bloomberg suggesting that the Chinese government is planting spy chips in motherboards is creating even more pressure.

Companies named in the Bloomberg report, including Apple, Amazon and Supermicro, have all dismissed the spy chip claims. The bulk of Supermicro server motherboards are manufactured by Taiwan-based ODMs' plants in China, and the US-based company accounted for a 11.7% share of the global server motherboard market in the second quarter of 2018, according to Digitimes Research.
 

maxz01

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How about India? Do they have the capability? Or Brazil? Where could they go?
 

atom

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For the sake of the stock market, why wouldn't you deny? Make the boards in Mexico I say.
 
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Yet I just read an article about three massive, new factories that just started producing motherboards, in China. All three of the companies they listed haver increased their production in China this year, they've diversified their expansion the same as they have for the last five years. The article is devoid of any numbers showing this actually happening, instead quoting targetted and heavily edited press releases.

In fact, the article just says "Their clients will likely want them to leave China because YOU ESS AY! YOU ESS AY! YOU ESS AY!". The specific factory they actually hold up as evidence of this great red, white, and blue shift started construction eight years ago and is just about to ramp up, yet it's because of the new lord and master. It's another article from the sycophant wire. The sycophant wire scares the shit out of me. Once independent media outlets vomiting up spin to fellate a regime that will put them in the cross hairs if their wrists aren't strong enough on the up-stroke. All the other little sycophants run around nibbling at the stray ball hairs to make sure the scrotum of the provided narrative is well groomed.
 

jardows

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Considering the current political climate between Taiwan and China, this is probably a very good move, let alone the fallout in the US market over alleged Chinese spy chips.
 

Ehren8879

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BYE_FELICIA.jpg
 

Derangel

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Yet I just read an article about three massive, new factories that just started producing motherboards, in China. All three of the companies they listed haver increased their production in China this year, they've diversified their expansion the same as they have for the last five years. The article is devoid of any numbers showing this actually happening, instead quoting targetted and heavily edited press releases.

In fact, the article just says "Their clients will likely want them to leave China because YOU ESS AY! YOU ESS AY! YOU ESS AY!". The specific factory they actually hold up as evidence of this great red, white, and blue shift started construction eight years ago and is just about to ramp up, yet it's because of the new lord and master. It's another article from the sycophant wire. The sycophant wire scares the shit out of me. Once independent media outlets vomiting up spin to fellate a regime that will put them in the cross hairs if their wrists aren't strong enough on the up-stroke. All the other little sycophants run around nibbling at the stray ball hairs to make sure the scrotum of the provided narrative is well groomed.

What are you ranting about? Digitimes is based in China and Taiwan, they have nothing to do with the American media.
 

Grimlaking

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I've seen this mentioned on other tech forums. Would love to know where this new production is taking place. Also one of the reasons we are coming down hard on China with Tariffs is their known practice of stealing trade secrets and basically manufacturing techniques for making the products made in China. As motherboard manufacturers move out China will just spin up companies to make these exact same boards in state and dump them on the market at a price low enough to make these companies hurt.

It's just what China does. So fellow consumers it is beholden to us to know the difference and educate other purchasers and up and coming generations of IT professionals.
 

cyberguyz

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Moving production to places like Indonesia and Malaysia isn't too tough for the tier one motherboard makers. But I have to say the current trade war thing is a temporary situation. It won't be there forever especially if a change administration comes along. Is it really a good idea to move their manufacturing away from China? After all China insists that Taiwan is a part of China and have been very possessive of them for pretty much as long as Taiwan has been big in the tech sector. I have a fear that Taiwanese companies pulling manufacturing away from mainland China would escalate that feeling of China's possession and urge them to some more active moves to reclaiming their province/country. Taiwan has protection treaties with the U.S. and moves by China to reclaim Taiwan would cause a military shitstorm for sure.
 

Motley

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This is great. Screw India, screw Mexico, we need to manufacture the motherboards in America. This is why Trump made the deal, to bring jobs back to America.

Oh and outsourcing too!
 

Derangel

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This is great. Screw India, screw Mexico, we need to manufacture the motherboards in America. This is why Trump made the deal, to bring jobs back to America.

Oh and outsourcing too!

It's not economically viable to make stuff like motherboards in the US. Unless you fancy paying $200 for a $100 mobo. It's a nice dream, but the use of cheap labor and outsourcing is why shit is so cheap for us.
 

Lakados

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How about India? Do they have the capability? Or Brazil? Where could they go?
Asia and Foxcon are in the process of decommissioning some of their older facilities in China with new automated ones in Taiwan and possibly the US. They will replace some 20,000 Chinese workers with a few hundred and a lot of machines while still maintaining the same output and far better quality control at a lower price.
 

Lakados

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It's not economically viable to make stuff like motherboards in the US. Unless you fancy paying $200 for a $100 mobo. It's a nice dream, but the use of cheap labor and outsourcing is why shit is so cheap for us.
That’s not true, manufacturing a motherboard in the us would add $2-3 dollars as the new plants are very highly automated. The US based plant would need less than 200 full time workers and would replace some 20,000 Chinese workers. The decision to move it to the US isn’t complete yet though, Foxconn is being offered huge tax breaks and exemptions from specific environmental regulations to try to improve their profit margins to make it more enticing but it’s not a popular move for most and it is causing problems.
 
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Zarathustra[H]

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How about India? Do they have the capability? Or Brazil? Where could they go?

You can't snap your fingers and have a board making plant appear out of nowhere.

I'd imagine these trends away from China have been under way for some time based on other issues (quality, better control, etc.). The spy chip thing and even the tariffs are way too recent to already have new capacity to move towards.

I mean, you can make small changes in the short term, with existing plants picking up the extra load by becoming better utilized or maybe even adding additional shifts, but the need to train new workers makes this difficult.

Long term the shifts can happen with additional capacity in the form of new or expanded plants, etc.

One challenge we have in the U.S. is that we don't have as many electrical engineers as we used to. It's much more popular for people to go into software these days.
 

RealBeast

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This is great. Screw India, screw Mexico, we need to manufacture the motherboards in America. This is why Trump made the deal, to bring jobs back to America.

Oh and outsourcing too!
Great plan, protects us from unwanted backdoors and the like, well except those brought to you by the NSA. ;)
 
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How about India? Do they have the capability? Or Brazil? Where could they go?
China has been building a lot of infrastructure in Africa so It wouldn't surprise me to the Africa become the new "China" of manufacturing.

The only way I see manufacturing coming back to the US is if they use the super cheap robot labor, which really does nothing for the job market or taxes (a little bit for taxes, but not much).
 

Mohonri

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That’s not true, manufacturing a motherboard in the us would add $2-3 dollars as the new plants are very highly automated.
Agreed. I've dealt with some electronics manufacturing, and at least for our products, the manufacturing cost difference between China and the US was almost nothing.
 
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Dead Parrot

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Spy chips aside, shipping costs are going up due to new fuel requirements for ocean going ships. No more super cheap very dirty bunker fuel. Plus manf cost in China are going up due to them starting the process of cleaning up the environmental mess their growth at any cost policies have created. And as their standard of living improves, labor costs will rise. And I think several of the companies were getting tired of having their IP stolen by the required Chinese partners. Good old fashioned corporate espionage is one thing, being forced to hand over the crown jewels as a cost of making crap in China makes it way too easy.
 
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Motley

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MDboyz

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For the sake of the stock market, why wouldn't you deny? Make the boards in Mexico I say.

Maybe it's better to have move more factories to Mexico, so they don't have to cross border into US anymore.
 
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This is great. Screw India, screw Mexico, we need to manufacture the motherboards in America. This is why Trump made the deal, to bring jobs back to America.

Oh and outsourcing too!

Yeah, 'cause the American government would never think of spying on people.

Anyhow, you make a deal with the devil, right?
 

primetime

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It's not economically viable to make stuff like motherboards in the US. Unless you fancy paying $200 for a $100 mobo. It's a nice dream, but the use of cheap labor and outsourcing is why shit is so cheap for us.
personally i would pay more for american made.......especially with an economy that im able to earn very good pay. (as it is now) but yea i can see some not willing to pay more
 

DejaWiz

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Bring them to the USA. Would be perfect intern jobs for students undergoing Microprocessor/IC engineering or other related STEM curriculums that are actually relevant college degrees.
 

1/2 bent

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It's not economically viable to make stuff like motherboards in the US. Unless you fancy paying $200 for a $100 mobo. It's a nice dream, but the use of cheap labor and outsourcing is why shit is so cheap for us.

You dont know shit
 

N4CR

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Agreed. I've dealt with some electronics manufacturing, and at least for our products, the manufacturing cost difference between China and the US was almost nothing.
This. In a highly automated environment the machine cost is the main kicker.
We have automated machines that can spit out 400 complicated brass optical mount pieces over a weekend.
The only cost difference between where it is and China would be electricity and building rent. Fuck all when you talk about a 300kUSD+ machine, an hour to load and setup plus a few hundred bucks of brass.
Where you could save $ is using Chinese labour to program/CAD things, but then that doesn't account for fuckups... which probably will cost you what you save every time.
 

Siersoren

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I'm completely fine with a motherboard manufacturer being based out of another country.

I'm NOT completely fine with that country being a corrupt communism who is overtly hostile towards my country.

Why WOULDN'T you tariff the mess out of them? I'm hoping wherever the dust settles, the future manufacturers will commit to a better quality on the motherboards than we are currently accustomed to.
 

haz_mat

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I don't know about you guys, but sourcing my motherboards and graphics cards from Taiwan was part of my purchase plan before this mess started. If theres any country that wants to fuck china, its that one.
 

atom

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Yeah, 'cause the American government would never think of spying on people.

Anyhow, you make a deal with the devil, right?
I'd rather have Uncle Sam spying on me than a communist dictator who only keeps us alive because of our economy. I'm sure I have an unpopular opinion but that's the way I see it.

Guys, I just say Mexico because it will still be cheaper than the United States. It's less money going to China. We have a good trade agreement with Mexico. What's good for Mexico will slow down the drug trafficking in the long run.
 

dreadcthulhu

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Guys, I just say Mexico because it will still be cheaper than the United States. It's less money going to China. We have a good trade agreement with Mexico. What's good for Mexico will slow down the drug trafficking in the long run.

Here is an idea: tariff China heavily, and move the more labor intensive work to Mexico. Then the US can come up with a program to deport illegal aliens straight to factory jobs back in Mexico, perhaps by offering an illegals who come forward a stipend to pay their relocation costs, or by providing free bussing and moving trucks. Would probably end up being cheaper than arresting them and processing them through the legal system.
 

M76

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It's not economically viable to make stuff like motherboards in the US. Unless you fancy paying $200 for a $100 mobo. It's a nice dream, but the use of cheap labor and outsourcing is why shit is so cheap for us.
200? Try 500. In china a factory worker get what $1-2 / hour. In the US you'd be lucky if you can get them for 15. And their work ethics? That's not exactly better either.
 

c3k

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I think I'll buy a decommissioned supertanker or aircraft carrier and anchor it offshore and convert it to a mobile motherboard factory. Yeah, baby!
 

Mohonri

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200? Try 500. In china a factory worker get what $1-2 / hour. In the US you'd be lucky if you can get them for 15. And their work ethics? That's not exactly better either.
I think you need to take a harder look at your numbers. You're tacking on an extra $400 of labor cost per board. If it's $15 more per hour for an American worker, you're claiming over 26 man hours of labor per board.

The reality is probably less than 5 minutes total, including packaging time.
 

Siersoren

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I think you need to take a harder look at your numbers. You're tacking on an extra $400 of labor cost per board. If it's $15 more per hour for an American worker, you're claiming over 26 man hours of labor per board.

The reality is probably less than 5 minutes total, including packaging time.

We're not talking labor which requires an advanced electronics degree. We're talking labor you could pull anywhere in the country for slightly higher than minimum wage. $15 is indeed a good estimate.

The simple truth is that there is not such a scenario where someone sits down, grabs a board, then manually does everything. If your workers are taking more than 1 hour of "Human Labor" per motherboard, something has gone terribly, horribly wrong.

This is a largely mechanized process. Adding $15 per motherboard to keep them in country wouldn't make me upset. I'd spend my cash on that.
 
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