While the internet is highly variable in this question, it appears that for the cases where it is cheaper to manufacture in china, the cost of manufacturing is only about 5% cheaper.

In some other cases where all the components are already made in the states, it can be upwards of 20% cheaper to make it here, because of the shorter lead time, less complex supply chain, as well as other factors.

The cost differential of China has effectively vanished due to rising wages, the implementation of some environmental rules, and increasing strength of the RMB.

What China does have is well established closely knit supply chains, which means its a shorter lead-time to start new production of a given widget - this is something that we can fix over time, and in my opinion, this may be the biggest lasting change from this crisis. We effectively got caught with our pants down in this crisis because of this.

This is anecdotal but I have yet to find a PCB manufacturer in the US that can do it cheaper than Chinese fabs at anything less than ridiculous scale - high speed digital/RF included. I still use US manufacturers half the time because of IP, timeline, or quality concerns (its just easier to get on the phone with someone who can help) but I don't see how the other manufacturers could be within 5% of China's cost when circuit boards at anywhere from 2x to 10x more expensive here.

You probably know them, but oshpark is great! You pay by the square inch, which was really fortunate for me because I needed a (very) small pcb for a project, and they made and shipped it to me (to Germany!) for less than 2$ at the time. Though I think they since implemented a lower bound on size/price.

Also, the purple/gold finish is gorgeous.

I'm curious, what run size are you looking at?

From ten to about one million. There are major caveats though: The middle volume boards (4-5 figures) were far more complex mixed signal boards with 10-20 layers and clock speeds ranging from several hundred Mhz for RAM busses to 1 ghz for MIPI to 2-50ghz for radios. Those projects had special needs and required quite a bit more manpower during the fabrication stage for layer alignment and in the assembly stage for tuning, since they exploited some nonlinearities in different components for high precision synchronization.

The large volume boards (6-7 figures) where consumer electronics focused and extremely price sensitive so the combined savings from colocation of fab and assembly were often significantly more than any savings automation or logistics in the United States, especially accounting for risk.

Where did you pull that 5% number out from?

I visited a factory here in the UK last year (with some school students), who make plastic injection moulded parts and items. The CEO there said that yes they do manufacture a proportion of their goods in China but the reason that they still manufacture in the UK was that China was a long way away and in fact didn't turn out that much cheaper in the end so there was still money to be made by having a more responsive supply chain with more hands-on quality control. There is a lot of automation in injection moulding though.

I saw it quoted in three different blogspam articles, I basically googled and opened the first 10 results. I was having trouble finding a hard study - but people I know who work in manufacturing have quoted me "for us its cheaper to make it here" to "up to 20% more" so the 5% number didnt feel out of place.

Everyone thinks it is cheaper in China, but reality is probably more complicated. Remember 10 years ago (probably every year ;-)) when companies started planning for more international software development cause you could pay Chinese and Indian developers less? Then sometimes it didn't work out and their salaries got higher.

The manufacturing industry local skill availability (manufacturing engineers?) must have degraded here in the US.

I've investigated this question a lot and come to conclusion:

1. It's network effect and lack of regulations.

I can buy a $50 welder from china, which European or American company can sell me $50 welder delivered to my home?

2. I am in India now and to get any company to even to listen to me, they'll require several phone calls and then they'll quote me some rediculous price, no one responds to any email or text in queries. But Chinese are happy to do so.

Chinese are happy to declare lower value in invoice so that importer can lower the import duties at their end.

3. If you can arrange a logistic partner, any Chinese company will drop the goods/samples to your local wharehouse within a day or two.

4. Even illiterate or village laborers can work in Chinese factory as long as they are getting work done. Heck, they can even create new product for their employer and get paid handsomely for that. I know one Chinese guy who today owns an electronic company, he dropped out in highschool and started selling custom designed electronics. In how many countries, you can design electronic device and sell it without undergoing various checks?

5. One of my friend imports Chinese product (with made in India mark) and inserts a bolt at the destination and gets all the publicity for making in India in local newspapers. Pretty, sure it's also true for many European companies who get everything done in china.

You can start at very bottom, you need to follow any rules as long as you aren't causing big problems for everyone, you are in business.

I've spent time in China, Europe, US sourcing products for my customers. China is completely different ballgame, you need very little money to get started in Chinese business.

My team was trying very hard to source locally made goods from india, now we gave up and went all china.

Proximity to the raw materials is another important factor. Latex gloves are mainly made in Asia, because that's where most of the rubber trees are.

I tried getting into 3D printing filament business in India and result? I couldn't find raw pellet providers which are manufactured locally and had to import the pellets, after paying duties even cheap labor couldn't make me competitive as prices as some American or European or Chinese brands.

Most rubber is synthetic (including nitrile (not latex) exam gloves)

There are a huge number of rubber trees in Africa, too. Firestone is/was one of the largest employers in Liberia. The rubber plantations in Ghana are massive.

The problem is China is already building the robotic assembly lines. They have been purchasing more advanced CNC machining equipment than the rest of the world combined and the volume is increasing. Their quality should continue to increase and costs decrease even as their labor begins to organize itself.

> Part of me wonders how serious a question this is. The ridiculously cheap manufacturing costs is why anything is made in China. When the Chinese get unions to negotiate $45/hour salaries, require fair working conditions, time off, medical/dental, and on and on things might be different.

I've often wondered why import tariffs and/or local manufacturing subsidies aren't used to address this. AFAIK they're set fairly arbitrarily, based on the whims of e.g. President Trump. But imagine if they approximated the difference in cost due to the environmental and labor standards of the two countries. Then it'd be an even playing field; there'd be no advantage in importing from a country with lower standards or exporting to a country with higher standards.

A few possible reasons why not: it seems non-trivial to accurately determine how much labor went into a part (may vary over time and by manufacturer) or how much environmental damage its manufacture caused. And maybe we just don't have the appetite to pay the cost of making things to our alleged standards and would rather dump the environmental cost on China. Even local manufacturers might fight it as they don't like the precedent of considering externalities.

> I've often wondered why import tariffs and/or local manufacturing subsidies aren't used to address this.

Partially due to WTO restrictions and feigned ignorance. You're right that it's non-trivial to properly assess the P&L of outsourced labor especially when most of the externalities (ex. emissions spreading across East Asia, population health) are not immediately identifiable. Globalization ignores these externalities in favor of short term profit. To put a price tag on such effects would be to acknowledge them, which nobody will do.

Actually this is what India does and result? If I can't get my $50 welder from china because government imposed $50 import duty on it, then I am not likely to invest into learning welding. And that job is going to some person in other country where government isn't doing this.

Government should stay away from trying to control import/export and see the local labor/business adjust on its own.

In manufacturing garbage in = garbage out. Use shoddy tools, end up with shoddy quality product.

It might work for domestic demand.

But internationally? A guy in India won't care about ethics used behind the product as long as he's getting his welder unit for the price/quality ratio he's aiming for. Usually, the volumes of sales accured in this fashion will result in efficiency beyond what cheap labor/lack of regulations can get.

> I've often wondered why import tariffs and/or local manufacturing subsidies aren't used to address this.

Have you been paying attention the last couple of years? Every time Trump tried to impose tariffs in order to prop up American manufacturers he faced no end of hostility, endless explanations about why tariffs don’t work, etc.

Hopefully this whole fiasco has opened people’s eyes to the fact that we should try to bring home some amount of domestic manufacturing instead of just saying “those jobs are never coming back” like a certain former president once said.

and then when someone tries to make a union for 45 in china someone else will come up cheaper and that new factory will win all of the old ones business. and since no loyalty all the old contracts will switch over in a blink. also the expensive license will just magically "lose it's business license" when a union is tried and only one without a union will have a active license. Lots of reasons things are the way they are versus usa. are we willing to deliver on a scooter for 2 dollars an hour or sell 1-5 dollar meals from our little stall with several dishes and live like that and be happy?

My understanding (at least with the iPhone) was that assembly/test is <2% of the cost, so doubling or even tripling that component isn't that significant. It's the supply chain that also needs to be aligned.

The "raw materials" used in that cost estimate from Foxconn are things like Samsung displays made in Korea, but also Apple SoCs and Qualcomm modems made at TSMC in Taiwan, and memory, power management, RF, cameras, etc. etc. etc. made in China. The time for Foxconn to assemble those modules, but an "Assembled in the US from parts made in China" iPhone would have the same difficulties. If you add the time to build the subcomponents and their support overhead it would cost much more. Also, the iPhone has a uniquely large margin and non-recoverable engineering costs, and the semiconductor and PCB industry is necessarily highly automated. The average bit of consumer goods has a larger assembly ratio.

For what an anecdote is worth (to give a sense of the scale of the problem) I'm involved in automotive tier 2 industrial automation in the midwestern US. One of my customers who has plants in several countries has told me that a fully loaded hour (including benefits, taxes, etc) of assembly operator time in Michigan costs $28, the same hour in China costs $7.50, and the same hour in Mexico costs $4.75. It is a bit more of a pain to maintain qualified engineering and maintenance parity across these different zones, but they basically do the automation in Michigan and mirror those known-good machines and processes overseas with remote support. They're assembling, staking, polishing and inspecting plastic interior components, and their costs are roughly 15% overhead and profit, 20% shipping, 20% raw materials, 10% capital (machine) depreciation, and 35% operator time.

supply chains and competency.

the component manufacturers are all right there, which simplifies things.

plus china is really good at building stuff. you want a factory to make something? their ability to spin up production is excellent.

the pay side of it is really much less of a factor than people think. china's just better at this stuff right now.

Yeah initially it was moved for pay, but now it's moved for expertise and population density. If you wanted to hire a 50,000 experienced assembly worked and 5,000 engineers tomorrow, China is the only place you could do it.

They do get medical and dental.