Chinese PCB services don't make dollars, but do make sense

[coppercone2]

wanna bet its because of environmental stuff? i.e. locally have a way to get rid of your ferric chloride 1000 gallon tank?

I think this business can take off in any country if they have easy disposal. or some kinda machine that cleans water rapidly.

Its really a great business. the only hard part is IMO the drill machines, the chemistry is like a god send for manufacturing. Dip things... and look at the clock.

But once you have environmental things, and expensive reagents, its not lucrative.

In china if they contaminate a 1000 gallon tank, they just dump it and get fresh cheap etchants or exposure chems. in america you get a chemist to try to rescue it, because its expensive and hard to get rid of. suddenly not so cheap

and in china, there are probobly less trade secrets because the things get around their little operations (physical close shared labor pool), so everyone knows all the tricks they learned. here the secrets last a while

[soldar]

wanna bet its because of environmental stuff? i.e. locally have a way to get rid of your ferric chloride 1000 gallon tank?

I think this business can take off in any country if they have easy disposal. or some kinda machine that cleans water rapidly.

Its really a great business. the only hard part is IMO the drill machines, the chemistry is like a god send for manufacturing. Dip things... and look at the clock.

But once you have environmental things, and expensive reagents, its not lucrative.

In china if they contaminate a 1000 gallon tank, they just dump it and get fresh cheap etchants or exposure chems. in america you get a chemist to try to rescue it, because its expensive and hard to get rid of. suddenly not so cheap

and in china, there are probobly less trade secrets because the things get around their little operations (physical close shared labor pool), so everyone knows all the tricks they learned. here the secrets last a while

Do you have anything to support your prejudice? Anything to support that JLCPCB does not abide by local laws?

[coppice]

The Chinese PCB makers want good relations with developers, in the hope of getting the nice production volume orders that follow. So, they will generally do what it takes to get you through prototyping as cheaply and smoothly as possible, to get on to the big orders. They used to offer weaker prototyping services if they didn't think you offered them the likelihood of substantial volume orders, but these days they tend  to treat customers more even handedly. Even with cheaper labour, its hard to see how they can break even with the handling costs for small numbers of cheap PCBs or components, but they seem to stay in business. If I go to a western supplier for a few PCBs or parts for prototyping, it will generally be a source that specialises in that market, and has to make all its money from the small orders (e.g. Digikey). Its a different world.

[Ice-Tea]

In my experience, the chinese often take a different approach to price-setting. Western companies seem to go "so, what's the maximum price we can charge before they run for the hills". Chinese go "so, what do I need to sell this for so I can pay costs, the machine and perhaps feed my kids". As a result, volumes go to China. That volume allows additional and more recent machinery that then gives them not only an efficiency advantage but often enough offers better specifications at lower cost.

[coppice]

In my experience, the chinese often take a different approach to price-setting. Western companies seem to go "so, what's the maximum price we can charge before they run for the hills". Chinese go "so, what do I need to sell this for so I can pay costs, the machine and perhaps feed my kids". As a result, volumes go to China. That volume allows additional and more recent machinery that then gives them not only an efficiency advantage but often enough offers better specifications at lower cost.

A lot of pricing in China works backwards, because major customers have a fixation with price points. Walmart says they want product X for $Y, then competition is people bidding the most sophisticated form of X they can squeeze to be $Y.

[coppercone2]

wanna bet its because of environmental stuff? i.e. locally have a way to get rid of your ferric chloride 1000 gallon tank?

I think this business can take off in any country if they have easy disposal. or some kinda machine that cleans water rapidly.

Its really a great business. the only hard part is IMO the drill machines, the chemistry is like a god send for manufacturing. Dip things... and look at the clock.

But once you have environmental things, and expensive reagents, its not lucrative.

In china if they contaminate a 1000 gallon tank, they just dump it and get fresh cheap etchants or exposure chems. in america you get a chemist to try to rescue it, because its expensive and hard to get rid of. suddenly not so cheap

and in china, there are probobly less trade secrets because the things get around their little operations (physical close shared labor pool), so everyone knows all the tricks they learned. here the secrets last a while

Do you have anything to support your prejudice? Anything to support that JLCPCB does not abide by local laws?

where the hell did i say that. violating china laws means you spill it in the street instead of the sewer. the laws there are favorable to chemical processing industries of plating, etching.

if you actually had an idea about this, you would know how crippling hazmat fees are in the US for business. and how its difficult to even get insurance for a building that has a few gallons of solvent in it.

The big companies do abide by laws, but they get to choose in which country. For instance monsanto operations in south america or union carbide in india.

if you put something in china there is a good chance you save millions of dollars a year because the scrubber only needs to be 50% as good, if you even care about being legal. If you decide to go illegal, its often harder to get caught anyway because their not focusing on chemical hygiene.

jlcpcb may or may not be bribing authorities for chemical things. regardless, the law is still favorable to them. as is being local to chemicals produced by other companies that have favorable laws.


are the american laws even worth it? maybe it helps a little with pollution but you get plenty of bad stuff happening if there is a down trodden economy, so the net effect is difficult to weigh.


If you have a bunch of chemical companies doing things under favorable laws suddenly it gets cheap. cheap disposal, cheaply made reagents, and often close together. then you can't really win with cost vs such a efficient complex.

[fourfathom]

In my experience, the chinese often take a different approach to price-setting. Western companies seem to go "so, what's the maximum price we can charge before they run for the hills". Chinese go "so, what do I need to sell this for so I can pay costs, the machine and perhaps feed my kids". As a result, volumes go to China. That volume allows additional and more recent machinery that then gives them not only an efficiency advantage but often enough offers better specifications at lower cost.

I don't think that anybody sets prices low without good reason.  But you might charge less in order to bring in more customers and so increase your volume and capture an expanding market.  JLCPCB, KiCad, etc, have made it easier than ever for small-scale players (like me) to develop and deliver products, and JLCPCB may have seen this trend and set their prices accordingly. 

And FWIW, JLCPCB has been promoting a path to high-volume production, letting them hang on to customers who are scaling up their initial small orders.  This can be a great business model, but it requires significant investment and longer timeframes.

[coppice]

wanna bet its because of environmental stuff? i.e. locally have a way to get rid of your ferric chloride 1000 gallon tank?

I think this business can take off in any country if they have easy disposal. or some kinda machine that cleans water rapidly.

Its really a great business. the only hard part is IMO the drill machines, the chemistry is like a god send for manufacturing. Dip things... and look at the clock.

But once you have environmental things, and expensive reagents, its not lucrative.

In china if they contaminate a 1000 gallon tank, they just dump it and get fresh cheap etchants or exposure chems. in america you get a chemist to try to rescue it, because its expensive and hard to get rid of. suddenly not so cheap

and in china, there are probobly less trade secrets because the things get around their little operations (physical close shared labor pool), so everyone knows all the tricks they learned. here the secrets last a while

Do you have anything to support your prejudice? Anything to support that JLCPCB does not abide by local laws?

where the hell did i say that. violating china laws means you spill it in the street instead of the sewer. the laws there are favorable to chemical processing industries of plating, etching.

if you actually had an idea about this, you would know how crippling hazmat fees are in the US for business. and how its difficult to even get insurance for a building that has a few gallons of solvent in it.

The big companies do abide by laws, but they get to choose in which country. For instance monsanto operations in south america or union carbide in india.

if you put something in china there is a good chance you save millions of dollars a year because the scrubber only needs to be 50% as good, if you even care about being legal. If you decide to go illegal, its often harder to get caught anyway because their not focusing on chemical hygiene.

if you actually had an idea about this you'd realise that modern factories don't etch PCBs with things like ferric chloride. They use chemical chains that are continuously regenerated, and generate only modest amounts of stuff to be disposed of. If you don't keep things tightly controlled, and return the etched copper to the recycling chain, you just can't compete these days. Many of the nasty effluent problems are only a problem with small scale businesses that can't set up proper supply chains. Just avoid back street businesses.

[Kim Christensen]

Yup... JLCPCB is not some fly by night manufacturer. If America/Europe/etc wants to stay on top, they need to be investing in factories like these and forget about all the tariff stupidity. Tariffs play well with the electorate, but only result in higher prices for themselves. Not very smart at all.

[Haenk]

I guess the current pricing is due to "keep the business running at 100% volume" - reducing the output would reduce the required workforce, and it will be very hard to pick up full production has the workforce had been fired. So there might be some subsidies come into play, as the chinese government really wants to keep unemployment rates low. (And younger chinese workers would protest if forced to quit and return into rural China, the government tries to avoid that.)
There is crazy competition in the whole market (not only electronics market), now more so than ever before, so that might come into play, too.

[daisizhou]

I guess the current pricing is due to "keep the business running at 100% volume" - reducing the output would reduce the required workforce, and it will be very hard to pick up full production has the workforce had been fired. So there might be some subsidies come into play, as the chinese government really wants to keep unemployment rates low. (And younger chinese workers would protest if forced to quit and return into rural China, the government tries to avoid that.)
There is crazy competition in the whole market (not only electronics market), now more so than ever before, so that might come into play, too.

Cheap Chinese labor is the main reason.Maybe this is the time to change the status quo.

[Infraviolet]

"unfettered access to intellectual property"
No doubt they will be very interested in all the PCBs people design which are pretty much copied from the component's datasheet.

[coppercone2]

i think that's a shitty argument to try to devalue your work

is this something spread by management to reduce pay? the data sheet quip

actually they can see who uses it, if its interesting try to look you up, to see which company uses it, and which company it works for, even if its totally easy. it can sure give a lot of insight to how a company actually does its process.

it used to be a smart guy saying "i suspect that this company might try to use this" and now a complete buffoon can go "this company uses this, I have proof". With 0 work.

with how transparent journals and the internet is you can make neat documents that tell you what circuits a particular research group is using.

if you wanna value your work properly, its that you determined that this off the shelf circuit works for X, and your the only guy that knows for sure, even if your skill is that you can understand a data sheet enough to make a PCB from it.  People say things are obvious but usually its not a independent appraisal, its the guy that has thought about a problem for hours, to the point of being bored with it.

and china has certain parts. some people there might make a spreadsheet of cheap parts, and search for circuits to steal that have equivalents for those parts. No idea about the end goal, they just need to know if their material will work and if there is a market.

then people say its trivial. if you actually try to do it yourself, you realize its a full time job, and have data bases of pilfered information is invaluable towards deciding WHAT to counterfeit or which market to enter based on the cross referenced resources that you have.


then suddenly someone with this kind of insider information can make use of parts that have a heavy surplus in a efficient manner in direct competition with the market at the right time. the power of a data base.

[mairo]

A 20 feet container costs around 4000 EUR to ship, my numbers might be a bit outdated. This is port to port.
…

By ‘outdated’ do you mean pre COVID? I feel is much more now, but do not have recent data myself.

[Joebeazelman]

i think that's a shitty argument to try to devalue your work

is this something spread by management to reduce pay? the data sheet quip

actually they can see who uses it, if its interesting try to look you up, to see which company uses it, and which company it works for, even if its totally easy. it can sure give a lot of insight to how a company actually does its process.

it used to be a smart guy saying "i suspect that this company might try to use this" and now a complete buffoon can go "this company uses this, I have proof". With 0 work.

with how transparent journals and the internet is you can make neat documents that tell you what circuits a particular research group is using.

if you wanna value your work properly, its that you determined that this off the shelf circuit works for X, and your the only guy that knows for sure, even if your skill is that you can understand a data sheet enough to make a PCB from it.  People say things are obvious but usually its not a independent appraisal, its the guy that has thought about a problem for hours, to the point of being bored with it.

and china has certain parts. some people there might make a spreadsheet of cheap parts, and search for circuits to steal that have equivalents for those parts. No idea about the end goal, they just need to know if their material will work and if there is a market.

then people say its trivial. if you actually try to do it yourself, you realize its a full time job, and have data bases of pilfered information is invaluable towards deciding WHAT to counterfeit or which market to enter based on the cross referenced resources that you have.


then suddenly someone with this kind of insider information can make use of parts that have a heavy surplus in a efficient manner in direct competition with the market at the right time. the power of a data base.

Years ago, a web developer friend of mine used to use an HTML layout service for the dirt cheap price of only $30 per page. The company providing the service was based in the US. He was ecstatic. It saved him hours of mundane tedious work, but he wondered how they could afford to bang out reasonable quality HTML code for so little.

Over a few months, he discovered more of these HTML services. They were mostly overseas where labor was relatively cheap, charging only a piddly $5 per page. He put two and two together and figured out the US service was simply hiring them for a steep markup. He decided to cut out the middleman and hired one of the overseas firms instead.

After about a year, he noticed his work from a few of his clients dried up. When he reached out to one of them, they told him that his rates were too high and were now working with a company overseas. When he asked who the company was, the client told him it was the same service he used to build their pages.

He learned a painful lesson about how much the cheap service really cost him. JLPCB is now offering PCB design services as well.

[Kim Christensen]

He learned a painful lesson about how much the cheap service really cost him. JLPCB is now offering PCB design services as well.

But if he'd continued using the US service, which was reselling overseas labor, the end result would have been the same.
The difference is he would have paid $30 per page to have his clients "stolen" vs paying $5 per page...

[SiliconWizard]

Do I get it right that the guy was himself acting as a middle man, got rid of one intermediate middle man, and ended up being the one middle man that another client got rid of?
Those chains of middle men are so fun, and the fact one thinks they can be different from any of the other middle men in the chain, is also rather funny in hindsight.
Or maybe I didn't get the story right. Who knows.

[tszaboo]

A 20 feet container costs around 4000 EUR to ship, my numbers might be a bit outdated. This is port to port.
…

By ‘outdated’ do you mean pre COVID? I feel is much more now, but do not have recent data myself.

4K were shipping costs post COVID. Now it went up again a bit due to the Houthis piracy and ships having to avoid that region.

[Siwastaja]

Those chains of middle men are so fun

Yeah. If you are a middle man, and add little value, expect to be replaced or removed. And that is only a good thing. Start doing something unique which adds value and then you are very difficult to replace (by cheap labor, or by AI).

[tonyget]

It's simply economy of scale. When you make PCBs for the whole world, the unit price can be reduced to a very low level

[schmitt trigger]

All of the reasons provided above are true, but....

What holds all those reasons together  is that Chinese companies are willing to work, and work very hard, for the longer term profits. Western companies, specially publicly traded ones, live and die by their always-rising quarterly expectations, and the associated stock price.

[m k]

It's a culture thing.
Western companies must use their own money or beat the index.

China is like a single company in market conquering phase.
(using western money)

[SiliconWizard]

Yes, the business model is quite different, and yes, the currency is quite different, and the cost of labor. So all added up, there is no mystery.

[daisizhou]

Yes, the business model is quite different, and yes, the currency is quite different, and the cost of labor. So all added up, there is no mystery.

China is changing.Labor costs are rising.
The latest reality is that the economy is very bad.

[niconiconi]

It's simply economy of scale. When you make PCBs for the whole world, the unit price can be reduced to a very low level

Economy of scale is my guess as well, no need for conspiracy. When they already have massive production lines up and running, they probably have enough surplus capacity to support these cheap samples from personal users to fill the gaps between industrial users. Perhaps they're even making a few samples as a small loss as a promotion strategy. For example, in China, you can order a few free 4-layer PCB samples each month.

What I do worry about, is whether this price war is going to drive all other PCB prototype vendors out of business, enabling JLC to be "The PCB Prototype Company" in China...