Cheap Tools From China Are Helping Small US manufacturers
Everybody is complaining that all the jobs are migrating in China, for a long time. Recently there is a Renaissance in small or micro manufacturing in US , and there is a timid action from the big companies to bring back the manufacturing , which overall is good .
There is another face of this story , which is that the Chinese manufacturers started to make cheap tools and machines that could be used by the small manufacturers to cheaply launch a small electronics hardware business . I am talking about CNC machines, pick and place machines and everything else that you can imagine.This is interesting because most of the tools on the market are geared towards the bigger manufacturers and their price is set accordingly. There are some US counterparts of those tools , but usually are a few times more expensive than Chinese ones.
It is a win-win situation for everybody . The Chinese guys sell their machines ,and we the makers have cheap tools to make our products. It is like 90s for software when making a website required hundreds of thousands of dollars ,and the bandwidth was costing an arm and a leg.Gradually it became cheaper and cheaper to have a presence online , and today even the smallest business can afford to have a website. This process created the software boom from 90s which eventually ended with a crash.But the companies that survived become the giants that reach everywhere today like Google and Facebook.
Same thing happens today in hardware manufacturing . The companies that started 10 years or 5 years ago like Sparkfun and Adafruit still felt the high price of buying a Pick and place machine which was about $40k , which is a hefty price when you just started. Also those companies could not use venture capitalists because those guys were nervous because they did not have any experience with hardware , and they were already traumatized by the year 2000 crash .Recently there are signs that they start to be interested about the hardware companies too, and there are some forward thinking venture capitalists that are already investing in hardware companies, and others might follow too.
Today the you can buy a pick and place machine for $4k which is a 10 times lower price. It might be a bit smaller machine than the $40k one ,but is sufficient for a small shop. which could crank a few tens of boards a day.That might be enough and because is it is so easy to have a global presence , its customers might be a really small niche but enough to keep the business profitable.
By keeping the prices relatively low , the products could be competitive internationally . This is important because more than 50% of the sales might go overseas. The sales overseas might grow in the future since a new generation is coming that is familiar with the maker culture , and the purchase power might improve especially from Middle East , Eastern Europe, and China. China might become a consumer society because the wages went up and many more people have expendable income and the flow of goods might reverse at least partially.
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