The reason China manufactures most of electronics in the world is no longer cheap labor, rather, it’s the unrivaled ecosystem of component manufacturers in the world. Amid the worsening of Sino US trade wars, is it practical to stop buying electronics from China? What would happen if stopping purchasing electronics from China and moving the manufacturing back to the United States?
Logistics
To build an iPhone from scratch at least 30 different custom parts are needed, most of which are custom made in China, and there aren’t any manufacturers of custom parts left in the US. At the very beginning of product development, testing and adjustments are especially important. Imagine time and hassles involved while shipping components back and forth from China to US for adjustments and assembling, and the assembly line would be dead for at least few weeks.
While assembling iPhones in China, what you have to do is just send the components to be adjusted back to the factory, within two days you would receive the units that are well fixed.
The main components like custom PCB, flex cables, lenses, brackets, housings, etc., are designed and manufactured by a great number of international vendors that have factories in China. When Foxconn sets up a new factory, it would usually require its top component suppliers setting up manufacturing facilities nearby.
Costs
Though cheap labor is no longer an advantage for electronics manufacturing in China while compared with some low costs countries like Vietnam, India and Cambodia, there’re certainly some advantages while compared with the US as it’s just about 15% of US rates. Regardless of that, Foxconn has already replaced lots of workers with robots and more advanced atomization equipment. Imagine if the manufacturing moves back to the US, not many jobs will be created as more robots would be placed in the assembly line and only few programmers are needed.
Skilled workers
It might seem easy to have a solution out by just building an industrial park in the US with all component factories to supply for the assembly facility. However, the reality is in the US there’s no way to find 1 million skilled workers and engineers like China. Given the large pool of talents available in China and the enormous size of domestic markets, buying electronics from China help companies to stay on a more competitive edge.
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