2 ms·
I mean, that's very 2000. It's 2016 and China's advantages are more moat-based than anything else. Why do we build electronics in China? The labor isn't that m
by criley2 10y ago
I mean, that's very 2000. It's 2016 and China's advantages are more moat-based than anything else.
Why do we build electronics in China? The labor isn't that much cheaper in 2016 and represents one of the smallest costs in an electronic device. An iPhone breakdown usually lists $200 in parts and labor, with $2 going to Chinese labor.
On the flip side, they have a generational moat for electronic manufacturing. You build electronics there because everyone builds electronics there. All the factories and subcontractors are all near by. The system is efficient and cost effective.
If you wanted to assemble in America you'd probably still be importing tons of Chinese parts.
- seanmcdirmid 10y agoAssembly happens in China, many of the parts are actually made in South Korea, Taiwan, and Japan. China still isn't great at high value part creation (well, it's more like, no one dares move that tech to China).
- Fej 10y agoWe build electronics there because they have a near monopoly on rare-earths. They use this to keep manufacturing in China. Not long ago there were quotas that limited the amount of rare-earth minerals that could be exported. I expect that as their monopoly on rare-earths slips, electronics manufacturing will move elsewhere, slowly but surely.