Apple to move key iPad engineering resources to Vietnam(asia.nikkei.com)
asia.nikkei.com
Apple to move key iPad engineering resources to Vietnam
https://asia.nikkei.com/Spotlight/Supply-Chain/Apple-to-move-key-iPad-engineering-resources-to-Vietnam
111 comments
>It is not moving US based core engg
Manufacturing is also becoming a core engg. Just ask the semiconductor industry. That was also offshored to Asia from the west by the metric boatload because it was not considered high value and prestigious enough, and now we depend on Asia for the most high value cutting edge chips which power our ... everything, as the western companies have fallen behind and are left with the manufacturing of low value chips. How ironic.
Reminds me of that scene form 'Back to the future' where 1955 Doc finds a faulty chip in the DeLorean's time travel circuit and says "No wonder it failed, it says Made in Japan", then Marty explains to him that in 1985 all the best stuff is made in Japan. That scene aged like wine.
It's all fun and games until you have another global supply chain disruption because some component you thought is irelevant but you now find out is only made in one country that now decides not to play ball or is vulnerable to an aggressor or a natural calamity, and you can't fix it because there's no equivalent manufacturing capacity or even know-how left in the west anymore, as it was all offshored 20+ years ago so everyone who knew that field well, is now retired or doing some other job. But hey, at least some execs got some fat bonuses and career changing promotions out of it.
Manufacturing is also becoming a core engg. Just ask the semiconductor industry. That was also offshored to Asia from the west by the metric boatload because it was not considered high value and prestigious enough, and now we depend on Asia for the most high value cutting edge chips which power our ... everything, as the western companies have fallen behind and are left with the manufacturing of low value chips. How ironic.
Reminds me of that scene form 'Back to the future' where 1955 Doc finds a faulty chip in the DeLorean's time travel circuit and says "No wonder it failed, it says Made in Japan", then Marty explains to him that in 1985 all the best stuff is made in Japan. That scene aged like wine.
It's all fun and games until you have another global supply chain disruption because some component you thought is irelevant but you now find out is only made in one country that now decides not to play ball or is vulnerable to an aggressor or a natural calamity, and you can't fix it because there's no equivalent manufacturing capacity or even know-how left in the west anymore, as it was all offshored 20+ years ago so everyone who knew that field well, is now retired or doing some other job. But hey, at least some execs got some fat bonuses and career changing promotions out of it.
> Just ask the semiconductor industry. That was also offshored to Asia from the west by the metric boatload because it was not considered high value and prestigious enough
It was and still is also incredibly dirty. Silicon Valley is among the top Superfund site collections for that reason - tons of semiconductor companies were very lax regarding pollution, and while the EPA cracked down on that pretty hard in the US, most Asian countries don't give a shit about the environment as long as the short-term profits are high enough.
It was and still is also incredibly dirty. Silicon Valley is among the top Superfund site collections for that reason - tons of semiconductor companies were very lax regarding pollution, and while the EPA cracked down on that pretty hard in the US, most Asian countries don't give a shit about the environment as long as the short-term profits are high enough.
Despite all EPA efforts, the semiconductor industry in the US still imposes itself on the environment in nasty ways.
https://www.austinmonitor.com/stories/2022/02/environmental-...
> Samsung’s semiconductor facility spilled a large amount of acidic wastewater into its stormwater pond and into a tributary of Harris Branch Creek in Northeast Austin, killing virtually all aquatic life within the 1.5-mile stretch. As much as 763,000 gallons of the acidic waste was discharged into the waterways for a period of up to 106 days.
https://www.austinmonitor.com/stories/2022/02/environmental-...
> Samsung’s semiconductor facility spilled a large amount of acidic wastewater into its stormwater pond and into a tributary of Harris Branch Creek in Northeast Austin, killing virtually all aquatic life within the 1.5-mile stretch. As much as 763,000 gallons of the acidic waste was discharged into the waterways for a period of up to 106 days.
I don't understand why the only instance monitoring this stuff "regularly" is Samsung itself. The ones with little incentive to actually care about the consequences or accurately monitoring this.
Outsourcing compliance monitoring and accreditation seems to have been a massive things across governments and countries. It’s got quite the track record of carnage too. We learn slowly.
>It was and still is also incredibly dirty.
Humanity's entire industrialization process to date has been incredibly dirty and damaging to this planet. It would be silly to think it has all slowed down. It just moved from your back yard.
Humanity's entire industrialization process to date has been incredibly dirty and damaging to this planet. It would be silly to think it has all slowed down. It just moved from your back yard.
> EPA cracked down on that pretty hard in the US
This is sadly an ongoing battle that never fully settles, be it in the US or the other developed countries.
There will always be more money made by cutting ecological corners, and where there's money there's politics. Fracking, regular industrial waste chemical, agricultural waste, any new spot where regulation isn't set yet, gets relaxed or there's an opportunity to push the issue under the rug it's almost guaranteed to be abused.
This is sadly an ongoing battle that never fully settles, be it in the US or the other developed countries.
There will always be more money made by cutting ecological corners, and where there's money there's politics. Fracking, regular industrial waste chemical, agricultural waste, any new spot where regulation isn't set yet, gets relaxed or there's an opportunity to push the issue under the rug it's almost guaranteed to be abused.
Yet
don't worry software and cpu design will be AI driven.
Everybody knows that by 2000 we will finally reach Communism end game and nobody will have to work that much.
Or at least that’s what my grandpa believed.
Or at least that’s what my grandpa believed.
i feel like this is largely motivated by growing qualms over being highly dependent on China. They are not alone by far, but Apple truly is an extraordinary case of being enitrely at the mercy of china playing their role. COVID was the event that lowered the tide enough to, painfully so, expose whos swimming naked. Now, add growing concerns over IP protection plus political volatility, and you have a situation that makes shareholders and executives queasy when rethinking their current position. China also isnt as cheap as it used to be, has economic troubles and faces an impending population collapse. Thats one hell of an uncertain future, soon-to-be superpowers dont tend to suddenly stop providing key metrics regarding their population and economy. Lets see how they handle their own personal 2008, Evergrande aint lookin too good either.
Given Apple’s profit margin I doubt the costs per se are much of a factor. But I think there have been two administrations in a row that probably (hopefully?) reached out to “Tim Apple” and suggested he imagine a future in which stuff doesn’t come from China.
And if you’re looking for industrious, ambitious people who will definitely not be in China’s pocket, Vietnam is a great place to look.
And if you’re looking for industrious, ambitious people who will definitely not be in China’s pocket, Vietnam is a great place to look.
Vietnam is a single party state capitalist system nominally called the Communist Party that teaches the same Marxist ideology as China.
Vietnam's head of state and head of party can serve just as many terms as Xi Jinping has so far.
Vietnam's system as all the same trappings as China's when it comes to political dissent or anything that can "undermine the territorial sovereignty and unity", an idea that can be used to control all facets of life. There are major human rights violations and concerns occurring there as well.
The general lack of trepidation about Vietnam, from the West, is solely due to Vietnam's irrelevancy, and Vietnam playing their own irrelevancy as friendliness for their own protection, it makes sense and they have no reason to do otherwise.
My only point here is that the primary issues we have with China is not their system, just their market power.
Vietnam's head of state and head of party can serve just as many terms as Xi Jinping has so far.
Vietnam's system as all the same trappings as China's when it comes to political dissent or anything that can "undermine the territorial sovereignty and unity", an idea that can be used to control all facets of life. There are major human rights violations and concerns occurring there as well.
The general lack of trepidation about Vietnam, from the West, is solely due to Vietnam's irrelevancy, and Vietnam playing their own irrelevancy as friendliness for their own protection, it makes sense and they have no reason to do otherwise.
My only point here is that the primary issues we have with China is not their system, just their market power.
If by “market power” you mean a desire to invade Taiwan, debt-trap diplomacy, the open pursuit of totalitarian norms replacing Western ones globally, and territorial acquisitiveness in opposition to international law (just to name a few things) then yeah, sure, that’s what it is.
But even then, if you want a partner who is close to China but not beholden to China, and for historical reasons will probably never be, then Vietnam is a great choice.
Is there any evidence that Vietnam would be as belligerent as China, were it only a little richer?
But even then, if you want a partner who is close to China but not beholden to China, and for historical reasons will probably never be, then Vietnam is a great choice.
Is there any evidence that Vietnam would be as belligerent as China, were it only a little richer?
Okay, sure, I dont see these aspects of the PRC the same way you do.
Taiwan hasn't always been the little democracy victim. They were quite totalitarian until like a couple decades ago. They have a competing claim to the shape of China that makes a mockery of the entire nation state concept. Its fun to imagine a democracy version of China, but a lot of the border disputes would be the same, the status of tibet would still be the same, and so on. Its the same people, they just lost. Its very similar to the story of the Hunger Games and realizing the liberated 13th district was the same as the status quo. Once we get stateside semiconductors this stops being our problem.
Next, debt-traps. The IMF and World bank do the same, I cant create a separate higher standard for China. These approaches are far superior to colonialism by force, which is an inferior model that the west/US also does. The US’ colonialism currently undermines its own national security by its approach to the middle east. China’s approach completely exempts it from Jihad and allows it trade and growth. Sorry, cant take the US perspective on this one.
Totalitarian norms: I disagree about China’s expansionist ambitions. I think this is once again projection from the west. China’s norm extension occurs when interacting with China, so if you want movies there you have to change the movies, and they monitor their citizens and students around the world. Their business, I wouldnt want to grow up in that environment but its their business.
But everything you wrote reads like projection. Its not just about how hypocritical the west is, our main disagreement is in the scope of China’s political aims. I think culturally they are quite contained, they want a unified China and enhanced trade, thats it. This will be at the expense of Taiwan and fishing zones, and thats it. Countries might even do trade in their currency, omg oh noes.
Taiwan hasn't always been the little democracy victim. They were quite totalitarian until like a couple decades ago. They have a competing claim to the shape of China that makes a mockery of the entire nation state concept. Its fun to imagine a democracy version of China, but a lot of the border disputes would be the same, the status of tibet would still be the same, and so on. Its the same people, they just lost. Its very similar to the story of the Hunger Games and realizing the liberated 13th district was the same as the status quo. Once we get stateside semiconductors this stops being our problem.
Next, debt-traps. The IMF and World bank do the same, I cant create a separate higher standard for China. These approaches are far superior to colonialism by force, which is an inferior model that the west/US also does. The US’ colonialism currently undermines its own national security by its approach to the middle east. China’s approach completely exempts it from Jihad and allows it trade and growth. Sorry, cant take the US perspective on this one.
Totalitarian norms: I disagree about China’s expansionist ambitions. I think this is once again projection from the west. China’s norm extension occurs when interacting with China, so if you want movies there you have to change the movies, and they monitor their citizens and students around the world. Their business, I wouldnt want to grow up in that environment but its their business.
But everything you wrote reads like projection. Its not just about how hypocritical the west is, our main disagreement is in the scope of China’s political aims. I think culturally they are quite contained, they want a unified China and enhanced trade, thats it. This will be at the expense of Taiwan and fishing zones, and thats it. Countries might even do trade in their currency, omg oh noes.
China is the greatest civilisational threat to the West we have seen since Persia or the Umayyad Caliphate. The fact that the West has allowed letting China grow as much as it has done will be seen as one of the most fatal mistakes in grand strategy in history. That strategy had a purpose for defeating the Soviet Union, but after it had collapsed China had served its purpose for us and should have been isolated by the international community again.
"allowed" found the murican
Your last two paragraphs are bang on the money.
Manufacturing is moving to Vietnam because it is politically, economically and militarily weak enough that it can easily be bullied into compliance/submission by the US in case it ever decides to go rogue and threaten US investments, or have the audacity to spin it's own domestic champions to compete with US players.
China was also like that 30 years ago but has now become strong and influential enough that it can not longer be bullied into just being the submissive sweatshop of the world it once was.
I recommend you watch the video that aged like fine wine: 'Meet King Joe - 1949 - Cold War Era American Propaganda Cartoon': https://www.youtube.com/watch?v=j-6YQQ779YM
Manufacturing is moving to Vietnam because it is politically, economically and militarily weak enough that it can easily be bullied into compliance/submission by the US in case it ever decides to go rogue and threaten US investments, or have the audacity to spin it's own domestic champions to compete with US players.
China was also like that 30 years ago but has now become strong and influential enough that it can not longer be bullied into just being the submissive sweatshop of the world it once was.
I recommend you watch the video that aged like fine wine: 'Meet King Joe - 1949 - Cold War Era American Propaganda Cartoon': https://www.youtube.com/watch?v=j-6YQQ779YM
Why bully foreign governments you can buy?
In case buying doesn't work. Then you wakeup with a coup in your back yard.
Kissinger's dead. You don't have to sit around patting yourself on the back about him anymore.
You can tell none of this is going to happen because of the zero times it's happened.
You can tell none of this is going to happen because of the zero times it's happened.
> Vietnam's head of state and head of party can serve just as many terms as Xi Jinping has so far.
They can, but to date, they don't: the Politburo holds the power and the head of state rotates regularly. Aside from Ho Chi Minh (who's long dead), there is no cult of personality in Vietnam, you won't find a single poster of the current leader anywhere.
That said, China also tried very hard to prevent another Mao by building in all sorts of safeguards, only for Xi to come along and stomp all over them.
They can, but to date, they don't: the Politburo holds the power and the head of state rotates regularly. Aside from Ho Chi Minh (who's long dead), there is no cult of personality in Vietnam, you won't find a single poster of the current leader anywhere.
That said, China also tried very hard to prevent another Mao by building in all sorts of safeguards, only for Xi to come along and stomp all over them.
Exactly, the West can bring to bear its might on Vietnam if they step out of line, especially since they themselves are not much fans of the Chinese and will be more than happy to work with the West.
For Western consumers and companies we have learnt the lesson that if we want to keep the flow of cheap products, we need to diversify the pool of labour we draw upon and to keep them dependent instead of building them up to be competitors in the supply of products as well as competitors as consumers of those products.
The crucial moment in the China strategy was in 2008 when we should have started on/friend shoring rather than leaving it until now. Instead with the West facing economic calamity at the time, we wanted the economically easy solution of letting China continue its integration into the global supply chain.
For Western consumers and companies we have learnt the lesson that if we want to keep the flow of cheap products, we need to diversify the pool of labour we draw upon and to keep them dependent instead of building them up to be competitors in the supply of products as well as competitors as consumers of those products.
The crucial moment in the China strategy was in 2008 when we should have started on/friend shoring rather than leaving it until now. Instead with the West facing economic calamity at the time, we wanted the economically easy solution of letting China continue its integration into the global supply chain.
This is a typical case where cynical answers are wrong. The good thing about Chinese manufacturing isn't that it's cheap - it hasn't been cheap for a while now. It's that they're really good at it.
Nothing's as expensive as a product that doesn't work.
Nothing's as expensive as a product that doesn't work.
There are also a few recent developments that should frighten any foreign companies that are still operating in China
- China's government's unprecedented and nationally coordinated audit on Foxconn's taxes and real estates in China. You could say that it is politically motivated, given the ceo of Foxconn was at one point running for president in Taiwan. However, he has since stepped out of the race, yet the audit is still ongoing. No doubt this has scared many Taiwanese firms to quickly move out of China, since this is just part of recent trend to try to squeeze money out of any capitalists (foreign or homegrown) since China is very very broke. (no, their now dwindling $800B dollar reserves is smaller than the dollar debt they owe abroad)
- a ton of recent arrest and prevention of foreign executives from leaving China. For example Japanese https://www.reuters.com/world/asia-pacific/how-an-executives... and American https://www.nytimes.com/2023/03/24/business/china-business-c.... This has prompted many companies to pull their employees out of China. Recently Moody downgraded China's rating, and Moody issued warnings to its employees in China https://www.businessinsider.com/moodys-staff-in-china-wfh-du...
- Russia's recent nationalization of foreign company assets. Being that China is allied with Russia in war against Europe and US, supplying Russia, and has the same dictatorship quality, it is very likely China will walk down the same path of nationalizing Apple's assets
- China's government's unprecedented and nationally coordinated audit on Foxconn's taxes and real estates in China. You could say that it is politically motivated, given the ceo of Foxconn was at one point running for president in Taiwan. However, he has since stepped out of the race, yet the audit is still ongoing. No doubt this has scared many Taiwanese firms to quickly move out of China, since this is just part of recent trend to try to squeeze money out of any capitalists (foreign or homegrown) since China is very very broke. (no, their now dwindling $800B dollar reserves is smaller than the dollar debt they owe abroad)
- a ton of recent arrest and prevention of foreign executives from leaving China. For example Japanese https://www.reuters.com/world/asia-pacific/how-an-executives... and American https://www.nytimes.com/2023/03/24/business/china-business-c.... This has prompted many companies to pull their employees out of China. Recently Moody downgraded China's rating, and Moody issued warnings to its employees in China https://www.businessinsider.com/moodys-staff-in-china-wfh-du...
- Russia's recent nationalization of foreign company assets. Being that China is allied with Russia in war against Europe and US, supplying Russia, and has the same dictatorship quality, it is very likely China will walk down the same path of nationalizing Apple's assets
I wonder what Tim Cook was thinking when the CCP sent in their "disinfection" crews and threw all of Foxconns employees personal items out.
There are a lot of straws breaking the camels back but Tim Cook juiced profits centralizing in China but eventually, and it did take a while, having all of Apples fruit in one basket became untenable.
There are a lot of straws breaking the camels back but Tim Cook juiced profits centralizing in China but eventually, and it did take a while, having all of Apples fruit in one basket became untenable.
It’s still cheaper than hiring American workers
Ironically, many sites for the repair of phones, laptops, and other consumer electronics --- including Apple products --- are hosted in Vietnam.
Companies all over the world have discovered that the cheap labor authoritarian nation where they did they manufacturing turned out in the end to be a real political problem and business risk, so they're moving their operations to countries that don't have such risks.
> so they're moving their operations to countries that don't have such risks
Did you mean: different cheap labor authoritarian nation?
Did you mean: different cheap labor authoritarian nation?
It's not the authoritarianism that's the issue with China. It's the geopolitical rivalry with the US and Taiwan.
>> geopolitical rivalry with the US and Taiwan.
The other geopolitical rivalries play a role too, including with Japan, Australia, the Philippines, Malaysia, Vietnam, South Korea, Philippines, Brunei, India,
The other geopolitical rivalries play a role too, including with Japan, Australia, the Philippines, Malaysia, Vietnam, South Korea, Philippines, Brunei, India,
> Companies all over the world have discovered that the cheap labor authoritarian nation where they did they manufacturing turned out in the end to be a real political problem and business risk, so they're moving their operations to countries that don't have such risks.
So they moved from one cheap labor authoritarian nation to the other cheap labor authoritarian nation next door.
So they moved from one cheap labor authoritarian nation to the other cheap labor authoritarian nation next door.
Such as: Vietnam. A communist country.
Right now, everyone at Apple and everyone in the USG knows that an all out trade war (or, heaven forbid, war war) between the US and China means that the head and body of the sometimes-largest US company get severed.
It behooves Apple and everyone on Team USA to do everything possible to make Apple be able to survive a corporate beheading ifwhen they become unable to manufacture in China.
They’ve started moving AirPods (India and Vietnam), some iPhones (India), and now iPads (Vietnam). Apple’s scale is immense, and a full replacement strategy is maybe the largest project they have ever undertaken, and certainly the largest that doesn’t get announced as some cool new product.
It behooves Apple and everyone on Team USA to do everything possible to make Apple be able to survive a corporate beheading ifwhen they become unable to manufacture in China.
They’ve started moving AirPods (India and Vietnam), some iPhones (India), and now iPads (Vietnam). Apple’s scale is immense, and a full replacement strategy is maybe the largest project they have ever undertaken, and certainly the largest that doesn’t get announced as some cool new product.
I doubt it has much to do with any impending war, after all Apple is moving to Vietnam with the assistance of a Chinese company that has been established in Vietnam for decades.
China's relations with Vietnam go back millennia, they even provided Vietnam with weapons and training during the their wars against France and the US. If anything China is trying to establish itself in Vietnam before anybody else can.
Vietnam, Bangladesh, Mexico and Brazil are all increasingly entwined with China when it comes to offshoring cheaper and simpler manufacturing. Expect the above nations to rapidly replace Made in China for many goods like batteries, toys, clothing and much more.
In 2018 China's trade balance accounted for 0.66% of their GDP. In 2019 it was 0.93%. In 2022 it leapt to 3.21%. In the next couple of years it will likely return to around 2% meaning that the domestic Chinese economy is responsible for adding around 98% of the value to China's GDP every year, the sum of all of China's international trade balance adds 2%. Being the Worlds factory really isn't all its made out to be, China needs to reform itself to make profitable goods not cheap ones if it wants its international trade to be as lucrative as the rest of its economy. They had a plan for 2025 but covid happened so its hard to see how much they were able to offshore, I believe clothing manufacturing has been reduced dramatically in China and they are making fewer batteries but otherwise they are probably still in the cheap industry rut.
China's relations with Vietnam go back millennia, they even provided Vietnam with weapons and training during the their wars against France and the US. If anything China is trying to establish itself in Vietnam before anybody else can.
Vietnam, Bangladesh, Mexico and Brazil are all increasingly entwined with China when it comes to offshoring cheaper and simpler manufacturing. Expect the above nations to rapidly replace Made in China for many goods like batteries, toys, clothing and much more.
In 2018 China's trade balance accounted for 0.66% of their GDP. In 2019 it was 0.93%. In 2022 it leapt to 3.21%. In the next couple of years it will likely return to around 2% meaning that the domestic Chinese economy is responsible for adding around 98% of the value to China's GDP every year, the sum of all of China's international trade balance adds 2%. Being the Worlds factory really isn't all its made out to be, China needs to reform itself to make profitable goods not cheap ones if it wants its international trade to be as lucrative as the rest of its economy. They had a plan for 2025 but covid happened so its hard to see how much they were able to offshore, I believe clothing manufacturing has been reduced dramatically in China and they are making fewer batteries but otherwise they are probably still in the cheap industry rut.
Slightly related genuine question: Why do Apple/Meta/Microsoft pay $300k-$1m/yr for American engineers (salary + stock compensation) from an international perspective? Capitalism states (sort of) that there's competition and an inherit race to the bottom. Companies have a motive to spend as little and get as much for their buck as possible. Globally, how is paying somebody $300k/yr in America (expensive) the best option in terms of getting development done? Is the answer really "quality"? Aren't engineer salaries much lower in Europe? What about Asia? South America (Brazil)?
I was a sofware director at a Fortune 500 company. I had engineers in Silicon Valley, Santa Cruz, Canada, the Netherlands, Russia, UK, Taiwan, and Wuhan (!) China. I also had individual engineers in Romania, Ireland, Portugal and Germany. Since it was already a global company, it was feasible to hire wherever we could find talent. Some of the Russia team moved to Armenia last year when the office in St. Petersburg was closed. We considered other countries like Vietnam since we had Vietnamese-American engineers but this is where we ended up.
Cost was one of multiple variables determining which site we hired at. At the extremes, it was a 10x difference. The higher the salary, the more senior the team. The competition to hire and retain software engineers caused salaries to go up everywhere, but at a faster rate in the low-cost countries. And low-cost countries were our go-to source for new grads. The profiles of say Russia and China universities varied significantly e.g. experience with open source, mathematical rigor, English skills, credentials, initiative, teamwork, and relevant courses.
The core product develpoment was done in the US but over time, other sites took on more product responsibility. In some of the countries, we also wanted to be closer to our customers, in expanding markets.
It's hard to measure quality, productivity and contribution on an individual basis but it was reasonably correlated with salary. There were outliers though.
So geographically-based staffing was complicated.
Cost was one of multiple variables determining which site we hired at. At the extremes, it was a 10x difference. The higher the salary, the more senior the team. The competition to hire and retain software engineers caused salaries to go up everywhere, but at a faster rate in the low-cost countries. And low-cost countries were our go-to source for new grads. The profiles of say Russia and China universities varied significantly e.g. experience with open source, mathematical rigor, English skills, credentials, initiative, teamwork, and relevant courses.
The core product develpoment was done in the US but over time, other sites took on more product responsibility. In some of the countries, we also wanted to be closer to our customers, in expanding markets.
It's hard to measure quality, productivity and contribution on an individual basis but it was reasonably correlated with salary. There were outliers though.
So geographically-based staffing was complicated.
As a senior IC formerly in a similar situation, I’ll affirm this is brilliantly written and even deeper than it looks.
I’ll add: Many of the Indian ICs I worked with were fine, but there was at least one manager who was an absolute disaster and the American executives had very little ability to fix the situation. Given that financial capital is here, executives will be here, and so some part of the org chart has to bridge across cultures, which is going to be a slight friction that compounds over the years of the project.
I’ll add: Many of the Indian ICs I worked with were fine, but there was at least one manager who was an absolute disaster and the American executives had very little ability to fix the situation. Given that financial capital is here, executives will be here, and so some part of the org chart has to bridge across cultures, which is going to be a slight friction that compounds over the years of the project.
ultimately, are the days of a blue collar engineer in the west limited?
you mentioned the new grad pipelines have already moved
what advice would you give to a engineer in the west hcol, pivot to product?
you mentioned the new grad pipelines have already moved
what advice would you give to a engineer in the west hcol, pivot to product?
Personally, I see the opposite trend: decreased differences in salary and cost-of-living. As developing countries develop, they'll look more and more like the US.
Put another way: Since WWII, we've been moving from US engineers (used broadly) with US as the only country who can afford our products to global engineers with everyone buying products.
There's no magic "US is a superpower fairy" which guarantees US salaries, cost-of-living, etc. will be 10x higher than everywhere else forever.
I can't predict the future, so I don't know what that will do for jobs outlook, but it's not as simple as "they're coming for our jobs."
My biggest worry is that the US is increasingly training incompetent engineers (again, used broadly). Much of the rest of the world has much better math and science in K-12. In winner-takes-all markets, 7-figure salaries can make sense sometimes to get the best over low 5-figure ones in the developing world, but if we're not the best....
Put another way: Since WWII, we've been moving from US engineers (used broadly) with US as the only country who can afford our products to global engineers with everyone buying products.
There's no magic "US is a superpower fairy" which guarantees US salaries, cost-of-living, etc. will be 10x higher than everywhere else forever.
I can't predict the future, so I don't know what that will do for jobs outlook, but it's not as simple as "they're coming for our jobs."
My biggest worry is that the US is increasingly training incompetent engineers (again, used broadly). Much of the rest of the world has much better math and science in K-12. In winner-takes-all markets, 7-figure salaries can make sense sometimes to get the best over low 5-figure ones in the developing world, but if we're not the best....
What about the whole “America has more inter-coastal waterways than the rest of the world combined” thing? I was listening to Peter Zeihan and he said our cheap water based transportation puts us on a very unequal playing field with the rest of the world. He also said it doesn’t matter if republicans or democrats fail in government because our bounty is just that significant.
> As developing countries develop, they'll look more and more like the US.
A one bedroom apartment in my city rents for $1,800/mo - $2,200/mo and it's very "nothing burger" in terms of what you get. I'd imagine the rest of the world has a lot of catching up to do in that department?
A one bedroom apartment in my city rents for $1,800/mo - $2,200/mo and it's very "nothing burger" in terms of what you get. I'd imagine the rest of the world has a lot of catching up to do in that department?
First place on a web search in...
Shanghai: https://www.smartshanghai.com/housing/apartments-rent/156977...
$1200.
Delhi: https://bnnbreaking.com/world/india/navigating-the-maze-of-b...
$330
Nairobi: https://propertypro.co.ke/property-for-rent/houses/in/nairob...
$20
Bangkok: https://propertyscout.co.th/en/spectacular-high-rise-1-br-ap...
$560
Lagos, Victoria Island: https://nigeriapropertycentre.com/for-rent/flats-apartments/...
$400
Ann Arbor, MI: https://www.zillow.com/homes/for_rent/condo,apartment_duplex...
A bit under $1000
It's actually quite all over the map.
Shanghai: https://www.smartshanghai.com/housing/apartments-rent/156977...
$1200.
Delhi: https://bnnbreaking.com/world/india/navigating-the-maze-of-b...
$330
Nairobi: https://propertypro.co.ke/property-for-rent/houses/in/nairob...
$20
Bangkok: https://propertyscout.co.th/en/spectacular-high-rise-1-br-ap...
$560
Lagos, Victoria Island: https://nigeriapropertycentre.com/for-rent/flats-apartments/...
$400
Ann Arbor, MI: https://www.zillow.com/homes/for_rent/condo,apartment_duplex...
A bit under $1000
It's actually quite all over the map.
Good data. I'm not sure if it proves my point or not or what point I'm even trying to prove about US + engineer salaries + cost of living
One nit pick:
https://www.apartments.com/ann-arbor-mi/
Under $1k is living pretty 'not so great' in Ann Arbor
One nit pick:
https://www.apartments.com/ann-arbor-mi/
Under $1k is living pretty 'not so great' in Ann Arbor
I'm not sure the world is always divided into clean points; I just figured the data would be interesting.
I've spent a lot of time in a lot of places (including several from that list), and I'm not sure what conclusions I'd draw about cost-of-living versus much of anything.
One unusual thing is often the very high cost-of-living in some cities in low-income countries. Like, if you can pay $50/month for housing an hour out of the city, why do people who earn a fraction of what I do spend $1000+ on housing in the city? Why don't people and businesses relocate?
I'm sure there's a good reason (and probably not the same reason everywhere -- crime, schools, economic opportunity, social standing, etc.), but apparent paradoxes like that are interesting.
I've spent a lot of time in a lot of places (including several from that list), and I'm not sure what conclusions I'd draw about cost-of-living versus much of anything.
One unusual thing is often the very high cost-of-living in some cities in low-income countries. Like, if you can pay $50/month for housing an hour out of the city, why do people who earn a fraction of what I do spend $1000+ on housing in the city? Why don't people and businesses relocate?
I'm sure there's a good reason (and probably not the same reason everywhere -- crime, schools, economic opportunity, social standing, etc.), but apparent paradoxes like that are interesting.
The US is a huge market with rules and culture completely different from the rest of the world. If you're building a product for the US market, you just can't beat a local team, who understand the customs, regulations and don't need user journeys explained to them in too much detail.
Are we always going to need millions of javascript developers? Possibly not, productivity gains might outpace demand. But people can retrain on things that are in high demand.
Are we always going to need millions of javascript developers? Possibly not, productivity gains might outpace demand. But people can retrain on things that are in high demand.
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There are many more feedback loops than meets the eye and not only corporations are rational economic actors. The in-demand talent tends to move to high CoL locations. Former low CoL locations become high CoL when successful. Especially when a high and low CoL location are adjacent, this tends to happen quickly (e.g. Germany and Switzerland, Malaysia and Singapore, US and Mexico.)
The reverse is also true - people in high CoL locations tend to move out when their skillset no longer commands top compensation.
In other words, I think the available workforce, to at least some degree, sorts itself into expensive and cheap locations based on what skills are in demand.
To give a concrete hypothetical: you hire an ML research team in Poland. While ML is in demand, those people can easily get a job offer in London or Zurich and get paid 2-3 times as much. They don't even need a work permit, and it's a 90 minute flight. Why wouldn't they take it?
The reverse is also true - people in high CoL locations tend to move out when their skillset no longer commands top compensation.
In other words, I think the available workforce, to at least some degree, sorts itself into expensive and cheap locations based on what skills are in demand.
To give a concrete hypothetical: you hire an ML research team in Poland. While ML is in demand, those people can easily get a job offer in London or Zurich and get paid 2-3 times as much. They don't even need a work permit, and it's a 90 minute flight. Why wouldn't they take it?
> To give a concrete hypothetical: you hire an ML research team in Poland. While ML is in demand, those people can easily get a job offer in London or Zurich and get paid 2-3 times as much. They don't even need a work permit
They actually need a work permit for London (it's not EU anymore).
I believe that for Switzerland there might also be requirements for the employer to state that they couldn't find talent in the country, before extending an offer to foreign nationals (including EU: Switzerland is not EU, though it's part of Schengen... And thus EU citizens have freedom of movement)
But your point stands... I think that fiefdom building, and needing teams close to where the execs (and/or investors) work and live is the other big reason why companies hire in high COL areas
They actually need a work permit for London (it's not EU anymore).
I believe that for Switzerland there might also be requirements for the employer to state that they couldn't find talent in the country, before extending an offer to foreign nationals (including EU: Switzerland is not EU, though it's part of Schengen... And thus EU citizens have freedom of movement)
But your point stands... I think that fiefdom building, and needing teams close to where the execs (and/or investors) work and live is the other big reason why companies hire in high COL areas
No there is no limitation in Switzerland for EU citizen, only specific domains (like waiter, hairdresser) where unemployment is above 5% must be first announced at local job agency, but you are still free to hire whoever you want. Btw free movements is not linked to Schengen but to bilateral agreements between CH and EU that entered in force before Schengen.
https://www.eda.admin.ch/missions/mission-eu-brussels/en/hom...
https://www.eda.admin.ch/missions/mission-eu-brussels/en/hom...
I get your point, but you actually need a work permit for both london and switzerland
You're right about London, although I explored it not long ago, and having an EU/EFTA passport and a job in tech seemed to basically guarantee it.
As for Switzerland, you don't need it. As the Swiss government itself says: "Thanks to freedom of movement, citizens of EU/EFTA member states can enter, live and work in Switzerland.".
[1]: https://www.ch.ch/en/foreign-nationals-in-switzerland/workin...
As for Switzerland, you don't need it. As the Swiss government itself says: "Thanks to freedom of movement, citizens of EU/EFTA member states can enter, live and work in Switzerland.".
[1]: https://www.ch.ch/en/foreign-nationals-in-switzerland/workin...
An important element of this is that there is strong and self-reinforcing geographical clustering effects around high-value skills. Engineers do not generically make $300k-$1M, it is engineers with specific domain expertise. I've had teams all over the world, the market is more efficient than I think some people expect. Focusing on wage arbitrage ignores that companies are optimizing for ROI, not cost per se.
I think it is also important to recognize that the engineers top American tech companies hire are often not American, they just happen to be in America. It is a geographical bias, not an American-as-nationality bias.
Engineers with unusually high skill in any particular area are geographically diffuse. You can't hire a "team" in some distant inexpensive country, there might only be one or two such engineers in the entire country and they are difficult to find. The moment a company invests in creating a concentration of domain skill where none really exists, that clustering of expertise has a natural gravity not only for engineers with those skills but for other companies that want to hire those skills. Why search for a particular engineering expertise in Bolivia when you know there are a hundred top engineers in some specific city? Even if the wages are higher, the risk is lower, hiring velocity higher, and the engineers more experienced, which has a large real ROI on its own. So people with those skills gravitate toward that concentration because that is where the money and jobs are. Wash, rinse, repeat.
There are many large cities in the world with a reputation for having a proper tech presence, albeit on a lower tier, where it is nearly impossible to hire certain expertise and experience even for Silicon Valley money.
You see the effects of this throughout tech, and not just software, where specific skill sets are oddly concentrated in one or two regions, including ones that are not particularly known for being tech or where the company that originally created the concentration became irrelevant decades ago. This expertise flywheel is how new globally leading tech hubs are created in practice e.g. Taiwan for silicon fabrication or Seattle for cloud.
This is the tech hub bootstrapping problem. You have to heavily invest in a valuable technical domain that is currently being ignored by existing tech hubs. Taking advantage of these opportunities requires vision and an appetite for risk, since it is a contrarian position almost by definition. I think this explains much in the European context, where you have large concentrations of excellent engineers but minimal investment in genuinely bold visions.
I think it is also important to recognize that the engineers top American tech companies hire are often not American, they just happen to be in America. It is a geographical bias, not an American-as-nationality bias.
Engineers with unusually high skill in any particular area are geographically diffuse. You can't hire a "team" in some distant inexpensive country, there might only be one or two such engineers in the entire country and they are difficult to find. The moment a company invests in creating a concentration of domain skill where none really exists, that clustering of expertise has a natural gravity not only for engineers with those skills but for other companies that want to hire those skills. Why search for a particular engineering expertise in Bolivia when you know there are a hundred top engineers in some specific city? Even if the wages are higher, the risk is lower, hiring velocity higher, and the engineers more experienced, which has a large real ROI on its own. So people with those skills gravitate toward that concentration because that is where the money and jobs are. Wash, rinse, repeat.
There are many large cities in the world with a reputation for having a proper tech presence, albeit on a lower tier, where it is nearly impossible to hire certain expertise and experience even for Silicon Valley money.
You see the effects of this throughout tech, and not just software, where specific skill sets are oddly concentrated in one or two regions, including ones that are not particularly known for being tech or where the company that originally created the concentration became irrelevant decades ago. This expertise flywheel is how new globally leading tech hubs are created in practice e.g. Taiwan for silicon fabrication or Seattle for cloud.
This is the tech hub bootstrapping problem. You have to heavily invest in a valuable technical domain that is currently being ignored by existing tech hubs. Taking advantage of these opportunities requires vision and an appetite for risk, since it is a contrarian position almost by definition. I think this explains much in the European context, where you have large concentrations of excellent engineers but minimal investment in genuinely bold visions.
Well put. It's a shame that the domain a lot of European countries decided to bootstrap tech hubs around was crypto and not AI.
Quality just isn’t there with offshoring due to the time zone difference and distance. Accountability isn’t there. The development savings will be offset by onshore QA, PM, Project management and rework by onshore devs. Been seeing that play out again and again for 20 years.
I have seen slightly better results with offshoring from Latin America - fast feedback makes a huge difference - being able to meet frequently and provide feedback in the same time zone makes a huge huge difference.
I think that AI will rapidly slot into this niche of “indirect programming” however. As soon as token sizes allow large codebases to be be parsed and modified, it’s all over.
I have seen slightly better results with offshoring from Latin America - fast feedback makes a huge difference - being able to meet frequently and provide feedback in the same time zone makes a huge huge difference.
I think that AI will rapidly slot into this niche of “indirect programming” however. As soon as token sizes allow large codebases to be be parsed and modified, it’s all over.
> I think that AI will rapidly slot into this niche of “indirect programming” however. As soon as token sizes allow large codebases to be be parsed and modified, it’s all over.
Context size is the least of an issue - current models suck in capability.
I've been building stuff on top of openai API for months and getting it to do trivial stuff with instructions reliabily is incredibly hard. These are things like "if a user asks a question about an individual but only specifies first name ask for last name before invoking a search function" - even with examples of what to do you'll get GPT 4 ignoring instructions and calling search with just a first name.
Like I understand that the potential they are showcasing is a breakthrough, and people are right to be excited about that - but we are extrapolating way to much based on breakthrough improvement pace.
We've seen similar claims about self driving cars being a year away since 2016.
Unless there's some breakthrough, I don't see AI affecting developer demand in the next two years at least.
Context size is the least of an issue - current models suck in capability.
I've been building stuff on top of openai API for months and getting it to do trivial stuff with instructions reliabily is incredibly hard. These are things like "if a user asks a question about an individual but only specifies first name ask for last name before invoking a search function" - even with examples of what to do you'll get GPT 4 ignoring instructions and calling search with just a first name.
Like I understand that the potential they are showcasing is a breakthrough, and people are right to be excited about that - but we are extrapolating way to much based on breakthrough improvement pace.
We've seen similar claims about self driving cars being a year away since 2016.
Unless there's some breakthrough, I don't see AI affecting developer demand in the next two years at least.
> Quality just isn’t there with offshoring due to the time zone difference and distance. Accountability isn’t there. The development savings will be offset by onshore QA, PM, Project management and rework by onshore devs. Been seeing that play out again and again for 20 years.
Yupp, it pretty much turns a quick conversation at standup or a quick huddle about a change into a 16+ hour turn around time at minimum.
Yupp, it pretty much turns a quick conversation at standup or a quick huddle about a change into a 16+ hour turn around time at minimum.
Also, these companies tend to be lead by engineers. They identify with the engineers and believe that this work (and thus themselves) is special. Not the case with say auto manufacturers.
Who is to say the future will "remain this way" for engineers? When will it become more of a commodity?
More and more these companies are lead by groups of people who have never worked as an engineer.
I think most CTOs of smaller companies make $500k/yr or more, don't write code, and are just really good at driving delivery/working with others/having good instincts on trusting others (like enterprise architects, dev leads, etc.)
Isn't the current AI level already good enough to offload a big chunck of the work? I feel like the technology is already there and it's just a matter of adoption
Time zones. The business people don’t want to have meetings very early in the morning or very late at night. And they need more than one meeting a day and those meetings are taking place during nighttime in most of the rest of the world.
The reasoning is different for Latin America - there the issue is more of a language barrier. While a great many people in Asia and Europe already know or seek to learn English, the same isn’t as true in Latin America.
The reasoning is different for Latin America - there the issue is more of a language barrier. While a great many people in Asia and Europe already know or seek to learn English, the same isn’t as true in Latin America.
Pretty much all devs in Latin America speak English. It's the lingua franca of software dev.
The level of English varies, and salaries usually correlate with English proficiency just as well as with technical ability. I believe this is because devs with strong English can compete as remote workers on the global market, whereas those who are not professionally competent in English are relegated to work in firms that speak their language, or at least to have a bilingual management layer above them.
I regularly had 7am PST calls with Europe and Russia and 7pm PST calls with China and Taiwan. Calls with both at the same time were particularly difficult to schedule.
Like I said, way early and way late. 7am I am still getting my kids up and ready for school. 7pm we are cleaning up dinner and getting kids ready for bed.
Now do Canada.
The best and brightest of Asia and Europe move to the US because of the salaries. Thus, the talent pool in the US becomes far stronger than the talent pool in other regions.
But it's also true that FAANG all have global offices and teams fully in places with lower salaries. They are aware of the pay differences and take advantage of them. But they can't completely have all development done in a separate time zone or even same time zone separate region (like LATAM). That slows down dev cycles, invites gaps in product understanding, and allows you to miss out on top talent who will move to get paid top dollar.
But it's also true that FAANG all have global offices and teams fully in places with lower salaries. They are aware of the pay differences and take advantage of them. But they can't completely have all development done in a separate time zone or even same time zone separate region (like LATAM). That slows down dev cycles, invites gaps in product understanding, and allows you to miss out on top talent who will move to get paid top dollar.
Some companies do love the race to the bottom, but these don’t last long.
Others seek instead to make remarkable things, and for these it makes sense to throw money at the best talent. What does it matter if an engineer costs 1m/yr if they make something worth 100m - 1000m? In fact, it’s a bargain.
This phenomenon doesn’t exclusively exist in America, but the environment there is more conducive to entrepreneurs swinging for the fences than most other countries. They’ve also been playing at a high level for much longer than most, so investors there have lots of wealth to fund startups.
So that’s where you find the big salaries as well.
Others seek instead to make remarkable things, and for these it makes sense to throw money at the best talent. What does it matter if an engineer costs 1m/yr if they make something worth 100m - 1000m? In fact, it’s a bargain.
This phenomenon doesn’t exclusively exist in America, but the environment there is more conducive to entrepreneurs swinging for the fences than most other countries. They’ve also been playing at a high level for much longer than most, so investors there have lots of wealth to fund startups.
So that’s where you find the big salaries as well.
> What does it matter if an engineer costs 1m/yr if they make something worth 100m - 1000m?
I think it would be very difficult to take the ~100 or some engineers who do make $1m/yr at Google and draw the direct line to "this specific engineer is responsible for $1,000,001 worth of profit (aka paying for himself/herself/themself + some)", let alone $10m, $100m, etc.
I think it would be very difficult to take the ~100 or some engineers who do make $1m/yr at Google and draw the direct line to "this specific engineer is responsible for $1,000,001 worth of profit (aka paying for himself/herself/themself + some)", let alone $10m, $100m, etc.
Salaries are not big of a cost compared to revenue, so the "savings" only are valuable to struggling companies.
To me this translates to "it's worth it to pay somebody $300k/yr - $1m/yr because companies can earn X% ROI on their cost of employees" but and I just struggle to believe where... from what I understand, there are like people who assemble iPhones for very very low cost in Asia, etc.
Now I'm not saying iPhone assembly and architecting cloud computing are the same skillset. I just find it "unlikely" that America really has that large of a quality gap internationally? I work for a company that has a remote team of developers in Shanghai. I don't know for sure but I'm going to guess they do the same work/probably better work than the US team for less pay.
Now I'm not saying iPhone assembly and architecting cloud computing are the same skillset. I just find it "unlikely" that America really has that large of a quality gap internationally? I work for a company that has a remote team of developers in Shanghai. I don't know for sure but I'm going to guess they do the same work/probably better work than the US team for less pay.
The money creates a bigger quality gap. At Meta's US offices, most devs are foreign origin. They moved for the money. So those devs wouldn't just accept paltry sums if Meta hired them overseas and they didn't need to come to the US to work. But Meta would have added friction the more and more of their teams are separate from product owners and business owners.
America’s superpower is immigration. The core teams at the biggest and best players are recruited globally; the high end of software engineering is, economically, the NFL or the Premier League.
They are probably closer when evaporated as a % based on the amount of value and profit in the supply chain that is being extracted. People making iPhones are working for companies that have their margins squeezed to razor thin margins so that Apple can make its 30% cut.
The other thing is the amount of skill required. There are more people who can be hired to assemble iPhones than to design all the parts that go into the product.
Finally, there’s an arbitrage effect going on. A company can more easily go into a low CoL and pay the predominate local wage than a person from a low CoL can move to a high CoL and get paid a fair wage (aside from legal barriers there are also social ones involved with leaving your family)
The other thing is the amount of skill required. There are more people who can be hired to assemble iPhones than to design all the parts that go into the product.
Finally, there’s an arbitrage effect going on. A company can more easily go into a low CoL and pay the predominate local wage than a person from a low CoL can move to a high CoL and get paid a fair wage (aside from legal barriers there are also social ones involved with leaving your family)
It's likely not based on logical accounting and counting every dollar - just like how companies blow money on fancy buildings or projects they know will likely be cancelled or never go anywhere.
This might be a controversial opinion here and I don't mean to offend anybody, but the distribution of engineers' effectiveness is not the same around the globe.
Thought exercise: what kind of profile would you expect of someone going into software engineering in a country where the good jobs pay 5x median wage (and ~25x global median wage) vs a country where the good jobs pay 2x median wage (and ~6x global median)?
Thought exercise: what kind of skills and experience would you expect of a 90%ile senior engineer in a country that gets lowest-bidder outsourced contract development work, vs a country that is directly employing engineers in "cutting-edge" development?
Thought exercise: what kind of profile would you expect of someone going into software engineering in a country where the good jobs pay 5x median wage (and ~25x global median wage) vs a country where the good jobs pay 2x median wage (and ~6x global median)?
Thought exercise: what kind of skills and experience would you expect of a 90%ile senior engineer in a country that gets lowest-bidder outsourced contract development work, vs a country that is directly employing engineers in "cutting-edge" development?
The same reason why middle and upper management is not outsourced. Communication and effective control over continents is hard. Core engineer salary costs are a drop in the bucket for global companies.
And anything that is not core product, they do outsource.
And anything that is not core product, they do outsource.
Because they earn enough per head to hire on-site in expensive locations. "Remote" seems to usually just mean not doing that, i.e. avoiding the costs of North American metro areas, seemingly usually out of financial necessity.
The engineering is their core competency and the source of competetive advantage. Given that it currently works well, and those companies are massively profitable - they see little point in doing risky cost-cutting.
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There's competition for high-end engineers everywhere, and you can't really afford to lock yourself out of the markets where those engineers congregate.
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there’s not enough good engineers to sustain a business the size of apple in any one geo location. this will change in the next 25 years
Because capitalism the theory and capitalism the reality are vastly, vastly different.
I just thought I’d jump in before someone talks about how [insert Ivy League school here] is the best thing since sliced bread.
I just thought I’d jump in before someone talks about how [insert Ivy League school here] is the best thing since sliced bread.
"Country risk" is a term used in the oil industry. Is it common elsewhere?
I imagine it's common for all strategic resources.
I imagine with the interesting geopolitical situation we all find ourselves in, if it wasn't before it sure as shit will be now.
I wonder given Vietnam is also a communist country why there. How about Thailand or India …
Because whatever you want to label Vietnam, in terms of business what matters is that it's fairly deregulated and open for international companies, and has been for decades, offers significant tax breaks for hitech manufacturing, and has a cheap workforce and an established supply chain. India or Thailand might well also be competitive, but it's not a given they're any more attractive.
If you mean to suggest there'd be the same risks as China, consider that Vietnam has consistently kept a certain distance to China, and have shared concerns with the US over Chinese expansionism. They're not particularly ideologically close, and politically there are few potential situations where deteriorating relationships between the US and China will negatively affect US-Vietnam relations, and some where it might improve them (e.g. if the issues in the South China sea escalates).
If you mean to suggest there'd be the same risks as China, consider that Vietnam has consistently kept a certain distance to China, and have shared concerns with the US over Chinese expansionism. They're not particularly ideologically close, and politically there are few potential situations where deteriorating relationships between the US and China will negatively affect US-Vietnam relations, and some where it might improve them (e.g. if the issues in the South China sea escalates).
The news reports here in India say that there’s a lot of red tape and delays in India. Ease of doing business is lower compared to Vietnam. The policies are protectionist and restrictive. The labor laws are, to some extent, protective of employees. This is something Apple has been reported as not being happy about (but things are changing).
Apple already has a growing iPhone assembly base in India, which is set to go to 25% of its total iPhone production within a few years. While Apple is still looking for low cost production, I’m sure it doesn’t want a repeat of China by concentrating a lot on one or two countries. I think the current moves are a temporary aberration, since concentrating iPhones in India, iPads and Macs in Vietnam and so on doesn’t diversify the risk as much as ensuring that every product is assembled in more than one country. I’m sure Tim Cook is spending a lot of time working on such measures to de-risk manufacturing and maintaining the company’s profit margins.
All the countries that support low cost assembly and manufacturing in Asia have different kinds of problems as far as governments, policies and stability are concerned. Apple or any other company has to figure out the right mix and plans.
Apple already has a growing iPhone assembly base in India, which is set to go to 25% of its total iPhone production within a few years. While Apple is still looking for low cost production, I’m sure it doesn’t want a repeat of China by concentrating a lot on one or two countries. I think the current moves are a temporary aberration, since concentrating iPhones in India, iPads and Macs in Vietnam and so on doesn’t diversify the risk as much as ensuring that every product is assembled in more than one country. I’m sure Tim Cook is spending a lot of time working on such measures to de-risk manufacturing and maintaining the company’s profit margins.
All the countries that support low cost assembly and manufacturing in Asia have different kinds of problems as far as governments, policies and stability are concerned. Apple or any other company has to figure out the right mix and plans.
Have you ever visited Vietnam? The people I've met there are highly motivated to build successful businesses, even more so than in many western countries.
Many of the countries in the region are communist. What sets China apart is that it is a world power competing with the US. Nothing to do with communism.
None of the other communist countries in the region are anything like Vietnam, and the idea of moving high-tech manufacturing to Laos, Cambodia, or North Korea is ludicrous.
India is fast becoming a facist & anti-democratic anti-mi minority country, not safe to invest under Modi whois trying to be Indian Hitler 2002.
The government is communist, but the people are not.
If you've ever spent any time in Vietnam, you'd understand that.
If you've ever spent any time in Vietnam, you'd understand that.
TBH even the government is Communist in name only. Vietnam is furiously entrepreneurial and the government mostly gets out of the way, unless it feels threatened and then it comes down like a ton of bricks.
It is not moving US based core engg (software, cpu design, etc) to Vietnam.