In our previous post, we discussed the pros and cons of outsourcing electronics production to third countries and how to prepare for mass manufacturing. We also briefly mentioned some of the most attractive countries for electronics production. In this article, we would like to take a closer look at these locations, particularly China, Taiwan, the United States, and Mexico. You can read about other locations in the second part of this post.
As an embedded electronics design company, we take someone else’s ideas, study them, and create new solutions. If you have a concept of a device or software, contact HHD to turn it into a real product. However, after the product is tested, your next move is to organize mass manufacturing. In this post, we are going to take a closer look at the following locations, study their pros and cons and their export regulations, and mention some of the top local EMS providers.
China
Since China remains the world’s largest electronics powerhouse, it totally makes sense to consider it your number one option.
Benefits
- Low production costs
China’s electronics manufacturing was initially boosted by very cheap labor. It motivated many companies to move their manufacturing to this country a few decades ago. By now, the country’s cost of labor has risen and is closer to the middle of the spectrum. Nevertheless, according to salaryexplorer.com, factory and manufacturing average salaries in China remain about two times lower than in the U.S. – $2,840 against $5,508.
Another factor influencing the production cost in China is the country’s low power rates for enterprises – $0.09 per kilowatt-hour as of June 2023, according to GlobalPetrolPrices. Compare it to the rates in the U.S. ($0.147).
- Developed infrastructure and cheap resources
China has an extensive railway and port network, roads, and airports, and the government continues to invest in the infrastructure. Also, manufacturers in China hold the advantage of sourcing local active and passive components, rare-earth metals, acids, solvents, copper, tin, gold, and more.
- Output capacity
Factories in developed countries often have limited capacity, while Chinese manufacturers can almost always find the staff for your order and easily scale up the production.
- Big domestic market
China’s electronics manufacturing enterprises have easy access to the country’s huge market, with millions of potential buyers. So, unless you are targeting purely your local market, you should definitely take this possibility into account.
