Electronics / software shifting to Asia?

In summary, there is a misconception that electronics and software are moving to Asia solely because of lower salaries and costs. While manual soldering and assembly may be cheaper in Asia, the equipment and materials used in electronics manufacturing can also be expensive. Additionally, outsourcing programming to countries like India may result in lower costs, but the quality may suffer and there are concerns about code security. In fact, a breakdown of costs for an iPod showed that very little of the money actually went to China, with most of it going to Japan, the US, and Europe. Therefore, the situation is more complex and it is not solely a matter of cost-cutting.
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I've been reading (and a few people mentioned it as well) that electronics, software etc is moving to Asia. By moving I mean that you can hire a company there to do the job for you for less money because salaries there are lower. The reason I can think of is that electronics / software doesn't need to be on-site and doesn't need expensive equipment and laboratories such as a wind tunnel etc. Is that true?
 
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No this is not correct. Electronics manufacturing equipment can be very expensive, especially building chips. Electronics assembly moves to Asia where manual soldering is cheaper. Why chip design moved there is beyond me.

Programming is a different matter. You can indeed outsource your programming to India. It might be cheap, but the quality is usually bad. The quality is increasing but so are their salaries. With countries like china you also have to worry if they will keep your code to themselves or if they sell it to your competitors. So there is still room for software development in the USA and the EU.
 
  • #3
This recently came up in connection with the new Apple iPad, it's made in china and so some politician was making the case that $zillions of US money was going to china and we should DO_SOMETHING (tm)

An iPod (the old gadget) originally cost $154 to make, but a breakdown of the cost of parts/assembly/software in an iPod showed that only $4 of value ended up in china. Most of the cost was expensive micro chips bought from Japan and the US, software licenses to the US and Europe and shipping - very little of the money ended up in the cheap asian country that was unfairly undercutting everyone.

Tracing where the money actually goes is very complicated.
 

1. What is driving the shift of electronics and software production to Asia?

The main reason for the shift is the lower cost of labor in countries like China and India. This allows companies to produce their products at a lower cost, making them more competitive in the global market.

2. Will this shift have a negative impact on the economy and job market in developed countries?

It is possible that there may be some negative effects on the economy and job market in developed countries, as production and jobs may be moved overseas. However, this shift also creates new opportunities and markets for businesses and can lead to lower prices for consumers.

3. How does the quality of electronics and software produced in Asia compare to those produced in developed countries?

The quality of electronics and software produced in Asia varies depending on the specific country and company. Many Asian countries have advanced technology and skilled workers, leading to high-quality products. However, there may also be issues with counterfeit products and intellectual property theft in some cases.

4. Are there any potential risks or challenges associated with shifting production to Asia?

There are potential risks and challenges, such as political instability, supply chain disruptions, and cultural differences. Companies must carefully assess and manage these risks to ensure successful production and distribution of their products.

5. Is the shift to Asia a long-term trend or will there be changes in the future?

It is difficult to predict the future, but it is likely that production will continue to shift to Asia in the long-term. However, factors such as changes in labor costs, advancements in technology, and shifting global markets may impact this trend in the future.

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