Slashdot Mirror
Hardware Manufacturing in China's 'Hot Zone'
solferino writes "'Anything you can make for $100, we can make for $40,' Chen says, summing up his commercial philosophy.
An interesting profile in Wired magazine of the computer hardware manufacturing 'hot zone', situated around the pearl river delta in mainland china, just outside Hong Kong.
The factories are mostly financed and operated by Taiwanese business interests. The article looks at life and business in the city mainly from the point-of-view of these 'foreigners'."
$40 eh ?
Lemmesee, at the current minimum wage over there, this means that $39.96 is cost+profits and $.04 is the wage of about thirty 14 year old kids...
Who is this Karma guy and why is he bad ??
What made the US a super power? (Besides the threat of Nuclear War) The people in the US that were willing to work all sorts of hours. The US became the Hegemony because the US culture has, to varying degrees, penetrated every other culture in the world.
Now China has the most valuable resource: cheaper than hell labor. Now all China needs is to reinvent its culture (again, for the umpteenth time) and, again, the middle kingdom could be the Hegemony.
When I was working for a designer lighting manufacturer as a network admin, we were currently in the process of moving our manufacturing process out of Germany over to China, for the simple reason that it was A LOT cheaper. Now, this isn't even electronics, merely simple electrical work w/ designer casings. However, I noted many a time that the German versions were much higher quality than the Chinese varients, though the Chinese ones were often 2x - 4x less expensive, though not 2x worst than the German ones. As far as electronics go, this is not surprising, but quality control is a MAJOR issue here. Things like Abit's exploding/leaking capacitors and such are signs of shoddy parts. There is NO point to buying something for 1/2 the price if you are going to have to RMA it in under a year.
"What can a thoughtful man hope for mankind on Earth, given the experience of the past million years? Nothing." -Bokonon
they can make things cheap because of the proximity to the other parts factories and due to the exchange rate differential. Their money is valued at 30% or less of what it should be. Do the MacDonalds burger or Coke can test to verify the real exchange rates between countries. (I'm speaking as an Egineer, who designs in Canada and manufactures in Taiwan).
That's right! Let's move those evil companies out of China.
That will leave the people better off! Jobs are bad for them. Maybe they'll just die and then we won't have to worry about it?
I don't like the idea of those countries with horrible human rights violations but until the people see the benifit of a freemarket where everyone has a chance at "making it", things will never change. If the people are unemployeed and hungry and destitute, the only recource is crime and corruption and turning to an even MORE corrupt government than what communism provides.
"Fighting the underpants gnomes since 1998!" "Bruce Schneier knows the state of schroedinger's cat"
China is a nuclear power and has been for many years. Their weapons technology is quite high AFAIK.
UNIX/Linux Consulting
The main gripe of these MBA's et al seems to be that their counterparts graduating across the Taiwan Strait in China seem to be lined up for fat salaries (China style) even before (now where do we remember this from?) graduation or (horror) are even dropping out of college just for the money.
Does anyone know of a list of computer hardware that is actually made in the US? What companies acutally still make things here? Or for that fact electronics in general? or heck even more just items in general??
I'd rather PUSH my Chevy than drive in a rice-burner.
Japanese cars are well-engineered. They're reliable (with the exception of the 3rd generation RX7, which is legendary for unrelated reasons). Everybody I've known who owned an American car had it in the shop at least once a year; a guy I know bought a Focus two years ago and it's been recalled ten times. Ten. He's pricing Hondas now, and he'll never make the mistake of buying an American car again. American cars are junk.
I'll buy an American car when somebody makes one that's worth what they charge for it. Until then, I'm damned if I'll waste my time and money propping up an industry that can't be bothered to make a better car than the competition. It's a free country, with a free market. Fuck 'em if they can't compete.
Fuck the Germans too, by the way. BMWs are almost as bad as Fords (in terms of reliability -- aside from that, they're faster, better looking, and you can change lanes without the whole car flopping around like a kicked puppy).
As an expat who has lived in Asia for 11 years, roaming factories and companies both low and high tech all over the region, I must say that this little expose` on Dongguan was pretty damn accurate. The article and several posters did, however, miss a few points:
1. The savings these mfg companies realize compared with US or European based is not only labor and tax. Industrial environmental waste processing is next to nill in Southern China. The place makes Taiwan look like a park refuge, and I tell you, Taiwan is no place for a scenic vacation unless you are into touring large polluted industrial zones, most of them abandoned now. For most tech companies, waste processing is a large cost, sometimes MORE than labor in industrialized nations. That is why so many fabs get moved over.
2. Software piracy is an issue, but it is not SAP, Oracle, Sun and our favorite M$ that lose out the most. Most of these Taiwanese companies are using native Taiwanese ERP software. About 50% of it is pirated, and the other 50% is licensed legally from the Taiwan ERP co's with branch offices in China. Either way, Taiwanese ERP software is WAY cheaper than western solutions.
3. MS has taken a "soft stance" on piracy in China. If they took the same stance they did with companies and individuals alike in China as they have done in Taiwan, there would be an exodus from thier beloved desktop. Taiwan has cracked down hard over the past years, but because the general public can afford it, they still shell out for MS solutions. If China cracked down like that tomorrow, it would not fuel massive MS sales, but would fuel a massive move to GNU/linux and other solutions.
4. I have watched foreign buyer after foreign buyer be entertained daily over weeks of factory visits in China. As a marketing and sales department, try to imagine the budget a firm would need to do that with clients in New York, London, or even Nebraska for that matter. You just can't get your clients so happy for so little after a hard day's work anywhere in the world. And, thier wives are not around and yes there are plenty of things for the client to do at night. And, happy clients come back to buy more.
5. A LOT of Taiwanese money in China is the result of one or a combination of the following:
a. Taiwan firm borrows heavily, boss runs off to China with all the money, firm goes bust. Boss starts new factory in China with money he never has to pay back.
b. Taiwan firm gets money from Taiwan investors (or private lenders), runs off to China, gives shareholders minimum or no return (or defaults on private loans)
c. Taiwan firm has uncompetitive business but nice pension fund built up. Taiwan boss transfers pension fund to China, starts new factory. Taiwan employees left with nothing as Taiwan company goes bust.
d. Taiwan firm some how burns down in flames, literally!!!. Fortunately, boss had insurance, and decides that the insurance payout is better invested in China. Oh, and he had two policies so doubled his capital.
Of all four above, I have personally known of a firm in each case that has done it and got away with it. Cheap capital (as in extorted), is just another competitive advantage these guys have.
So, why does China let them get away with it? Because China is the next manufacturing superpower. That's right, in 5 years you will be lucky if you can find 10% of the goods on US shelves made in the USA. Even if they have the tag, those goods are probably assembled in the USA from components and sub assemblies made in China, Mexico, Indonesia, India, or wherever it is cheaper than the US. There are just too many arbitragers out there looking for a buck.
Real men don't need signitures!!!
As a chinese student studying in US, I do have something to say.
a lley/43 5 0115.htm [siliconvalley.com]
> by Anonymous Coward
> Overseas Chinese, especially Taiwanese, are not foreigners.
> Many of those over 50 were born in Mainland China. They're
> returning to their native land and regaining some of the money
> and property that was unjustly stolen from them.
Usually every time Slashdot has a story anything related to China, communist bashing usually follows. You know this world is full of catch-22s. Nationalist's land taken over by communist. But wfterall, what the United States did build on is their strong military power. Quoted from Black Hawk Down, "When bullets go pass your head, politics go right out of the window." But guns speak for politics. Every countries struggle like this, think about history of Texas and Israel. They fight. Power struggle.
For human right records, China certainly does not have a word to say. Lest not forget Tiananmen Square, but watched out for next 5 to 10 years. Power struggles and in-fights in the regime be taken account over this
>Asia feels heat as sofware piracy rises
>http://www.siliconvalley.com/mld/siliconv
>
>Microsoft Corp said on Wednesday software piracy was on the rise worldwide and
>China, Taiwan, Hong Kong, Malaysia and Indonesia were the "hotspots" in Asia
>where major counterfeiting activities thrived.
Yes, you are absolutely right. Now think about this, if you are a student, your monthly wages is less than $125 USD and you want to do 3D graphics just like you slashdot readers do, will you choose to buy a Maya 4.0 student version for a pirated $4 USD CD or $400 USD student version ?
Globalization hits every corners of the world. China is forced to open its market and they have to change, but standards has yet to follow. You really can't compare the wage of average Chinese wages with a piece of Microsoft Office.
By the way, ask yourself, did you ever you Napster, LimeWire, Gnutella and Hotline grab your favourite MP3's and Warez ? Pretty much the same moral story you know. It spares money (for more beer).
And of course again, that's why Linux is pretty hot. Watch out for the Redflag Linux.
> by aburnsio.com
>About third-world outsourcing brain work: don't do it.
>
>Every company I've heard of doing this, and every programmer I've talked to that's had
>to work with these third-world outsourcing companies, has had absolutely nothing good
>to say about it. There may be exceptions, but in every case I know if it's nothing short of a disaster.
>
>I don't want to sound pompous and say that third world programmers are no good, but usually they are no good.
First, think about should you classify China as a third-world country. Frankly it's kind of hazy to classify it between developed country and developing country.
It really depends on what kind of jobs for outsourcing isn't it ? Humans are hard to manage anyway. My analogy is to think about long distance love. Some do work out some don't. I bet you can't ask them to to a lexical analysis stuff but I'm sure most Chinese CS students have no trouble competing contracts on Visual Basic and MS SQL, and many MCSE, Cisco and Orcale stuff. In case you don't know, many favourite CS books in the States such as "UNIX Network Programming" by W.Richard Stevens have been licensed by academic publishers of Tsinghua, (I got one for $9), so watch your back and work hard on your CS class......
Watch out for Microsoft Research in Beijing. They do a lot of SQL stuff don't they ?
>by Astrorunner
>"any ting you want."
>
>"Anything?"
>
>"Anyting"
I don't find this particularly funny. There're many good Chinese that speaks English well too, those who speaks English AND Chinese well will earn a lot there. I know many Asian American friends see this trend.
And again, many Japaneses don't speak good English, but money speaks, saving speaks. Look at your logitech mouse.
Processor prices are limited by yield (aka. how many good processors come out of the factory) which is entirely limited by technology. Their fabrication technology is not better than ours right now. If anything, it is far far behind. There is no way that they can produce chips cheaper than we can.
Of course they could possibly get some non-proprietary hardware cheaper, and make their workers work for less. However chip errors occur because of microscopic particles in the air and slight jolts and bumps from a mechanical handler. These are not things that foreign manufacturers have a better handle on than we do. The number of working dies(the chip before its packaged) per silicon wafer is the most important factor in chip price.
Lift the hood open on recent Geo Prizm's, and you'll find a Toyota Corolla engine within.
There are a huge number of yeast infections in this county. Probably because we're downriver from the bread factory.
And, oddly enough, this lack of IP law does have consequences (in this case, leaky capacitors screwing up most motherboards coming from Taiwan in the last 6 months) in a global economy:
Read here and here.
As much as a lot of Slashdot readers might not want to hear this, when information is totally free, things suck. Things also suck when rules put in place to protect information are enforced too rigidly or unevenly. The secret is to find a moderating system that finds the proper balance - something that Lessig has been saying all along...
That is all.
>But the firms pay taxes in their home countries not in China
Why not Cyprus or Malta
I remember when Chinese computer components first came into the local market (Los Angeles) in large quantities. At first they were complete crap, cheaply made and clearly with no concept of quality control, and could be counted to barely scrape by and have a short lifespan.
:)
But 3 or 4 years ago, that began to change, and now Chinese products are pretty much on a par with everyone else quality-wise. I no longer cringe when I see "Made in China". This is a good thing all around -- I can save money buying a product whose quality I'm adequately comfortable with, and the money it brings Chinese workers is surely welcome there as well.
It's been the same for every startup-manufacturing process in every country -- they all take a while to get volume and quality on an even keel. We old folks remember when a Japanese car was a wobbly tincan with wheels. About the time Japanese quality went up, Korea came on the scene as the next big cheap manufacturing base, and at first everything from Korea sucked too. And if you go far enough back, you'll find 19th century Europeans' complaints about those manufacturing upstarts in America, flooding the world market with cheap crap.
~REZ~ #43301. Who'd fake being me anyway?