EEVblog Electronics Community Forum
General => General Technical Chat => Topic started by: Joebeazelman on June 25, 2024, 05:01:28 pm
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Back in the 90s to early 2000s, I was happy to find any PCB manufacturing service willing to manufacture a single, 4-layer PCB for $100 here in the US. The price easily quadrupled if I wanted it in a few days instead of weeks.
Fast forward to today, Chinese PCB services companies can manufacture the same board for just a few dollars for a batch of 10 and about $20 or more to ship it in a few days. It costs more to ship a FEDEX envelope to your next door neighbor. Economics cannot explain how they can support such absurdly low prices, especially given their insanely aggressive marketing targeting both hobbyists and professionals alike. For instance, they'll readily sponsor any YouTuber who remotely covers electronics topics, and their ads are so ubiquitous, even laypeople have heard their names floating around.
I'd wager they are heavily subsidized by the Chinese government. The electronics hobbyist market, especially at the advanced level of custom PCB design, is just too small to support the volume needed to justify such low prices. They're low enough to make PCB-based prototyping often more cost effective and timelier than traditional methods, such as wire-wrap, breadboards and perfboards.
It leaves an open question, why would the Chinese government subsidize something as obscure and arcane as PCBs when there are a lot more lucrative businesses worthy of subsidies. I suspect it offers some China some strategic advantages.
First, their low prices obliterates domestic competitors, establishing themselves as monopolies. Overtime, nearly every PCB designed on earth will be manufactured in China for nearly every imaginable device. Second, the PCB service manufacturers are likely retain a copy of every PCB manufactured, giving them intimate and unfettered access to intellectual property.
Is this a plausible explanation?
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Why would they need to be subsidized? The prices are really cheap only for 2 layer boards. As soon as you go to 4 layers or deviate from the most common configuration, the price goes up.
They are benefiting from the overall government economic policies, but I doubt they get specific subsidies. They run mostly automated business. And for the manual part, cheaper labor costs help.
US companies just don't want to structure their systems to deal with low volume orders. They are sitting on much more lucrative military and aerospace stuff, which can't be outsourced and they can pretty much charge whatever they want. The high retail price you see from them is not because it costs that much, it is because they don't want to deal with your order, so they set the price accordingly.
And of course, their main expectation is that once you've done prototypes, you will order the real quantity, which is charged at the real rate.
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Perhaps some of these small PCB orders simply use areas between larger PCBs that would otherwise be scrap material?
I couldn't take the empty JLCPCB box and ship it to my neighbor for less than it cost me to order. I think that has something to do with international postal treaties, so in a way that's a subsidy.
On another note, MicroChip's free samples didn't make sense back in the day, but this service was available for a very long time before the resellers ruined it for everyone. But it did boost the popularity of the PIC line of chips so when the students/hobbyist got real jobs they'd want to use PICs. I think in the end, the cheap PCB fab is a similar tactic. It's a loss leader that they hope will turn into larger orders in the future. Long term strategy vs short term losses.
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None of those services offer particularly cheap shipping. Their rates seem to be normal for high volume shippers. You can't ship a single box for that price, but if you are shipping 1000s, you can absolutely negotiate similar price with UPS and DHL.
Shipping cost is one of the reasons I started using OSH Park again for small boards. With the free shipping they offer, it ends up being a better deal in many cases. Unfortunately they don't offer 4 layer boards in a non-purple color. And I'm not ordering purple PCBs.
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None of those services offer particularly cheap shipping.
It's pretty good if you can wait 10-14 days. My last order:
2024-06-03 21:57:31 Order submitted
2024-06-05 19:14:52 Awaiting carrier pickup
2024/06/15 02:29:19 Delivered
Previous order:
2024-01-21 21:28:10 Order submitted
2024-01-23 00:36:18 Awaiting carrier pickup
2024/02/05 04:02:21 Delivered
This was using their "Global Standard Direct Line"... Total cost of PCBs + shipping was less than $5 Canadian for each order. Maybe I'm just lucky living on the west coast of North America.
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I just checked, and JLC is indeed cheap. I just compared the same design and JLC was $1.5 while PcbWay was $7 for the same global standard shipping.
So, for JLC specifically, I would say they are probably not even breaking even on that. I guess it is just a difference of where the marketing money goes - PcbWay advertises heavily, while I have not seen a lot of JLC ads.
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I just checked, and JLC is indeed cheap. I just compared the same design and JLC was $1.5 while PcbWay was $7 for the same global standard shipping.
So, for JLC specifically, I would say they are probably not even breaking even on that. I guess it is just a difference of where the marketing money goes - PcbWay advertises heavily, while I have not seen a lot of JLC ads.
There are often hidden promotions/discounts on shipping for certain orders, absolutely marketing at work.
As soon as you step outside the specials it adds up. Example:
5 designs of tiny boards that would fit comfortably inside the 100x100mm special most places offer, all wanted to charge a multiple design fee higher than the cost of ordering the 5 designs as completely separate orders. Shipping was also higher than the advertised "normal" price for the single panel design because the multiple designs triggered it into a different pricing structure entirely.
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Part of it is, shipping is subsidized, or, was some years ago anyway? Not sure exactly what the economics are today.
With the recent tariffs, shipping whole assemblies (cost above tariff threshold) is no longer economical, or, is overall competitive with domestic sources; PCBs are still cheap (usually below threshold even for custom proto runs).
Tim
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All Chinese vendors changed up shipping a lot recently. USPS and likes were making a lot of noise that they are overwhelmed and are not getting paid enough to deliver the packages. So, now most vendors on Aliexpress have switched to some (new?) last mile delivery, where packages are delivered by random people in cars. I'm guessing there is some Uber/Lyft like system where people can sign up.
I looks like PCB vendors still use USPS as a last mile, but it may not last when that other service gets fully ironed out.
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A few datapoints: JLCPCB 4-layer isn't much more expensive than their 2-layer boards. The difference is pretty trivial.
As for delivery, I've been paying for "DHL Worldwide Express" (not the cheapest, but the cheapest of the "fast" methods). This often arrives in my mailbox, so US Postal Service is involved. But sometimes a DHL-affiliated van does the delivery to my doorstep.
I don't know if or which subsidies are at play, but it does look like JLCPCB has truly optimized their process for high volumes of small to medium orders. I would like to use local (USA) fab and assy houses, but from time to time I check the price and delivery options and the USA cost is typically 20x the JLCPCB price, and the delivery is worse. OSH Park is usually better than that, but still not competitive. And using JLCPCB assembly, even though most of my components aren't JLC standard stock, is still a big bargain compared to USA assy (or me doing it myself).
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JLCPCB recently made me five 4-layer 1oz copper boards with white silkscreen for $118.
... did I mention these boards are 575.3 mm x 116.8 mm (22.6in x 4.6in)!
Right off the bat, that's only $23.56 per board. But even crazier, it's 104in^2, so $0.22/sqin!
If I hadn't needed 1oz copper or white silk it would have been even cheaper.
I don't care how they do it :)
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In China, 2-layer PCB within 10cmX10cm is free, and the shipping fee is not required.(Sometimes there are free tickets on the 4th or 6th floor)https://www.jlc.com/portal/t7i37578.html
PCB manufacturers are private enterprises, and the government does not participate in the formulation of sales strategies.
I think this is the result of large-scale industrial production.There are many videos on the Internet, JLCPCB is all automated production.
These are very common in China
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I assume that the free PCBs are a marketing investment. Many companies invest *a lot* of money in marketing/sales, and given the production lines JLCPCB have, I bet this is a relatively small investment overall, even though it looks like "getting stuff for free", so this makes sense.
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Is this a plausible explanation?
No. It makes no sense whatsoever.
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I assume that the free PCBs are a marketing investment. Many companies invest *a lot* of money in marketing/sales, and given the production lines JLCPCB have, I bet this is a relatively small investment overall, even though it looks like "getting stuff for free", so this makes sense.
Yes.This seems to be more cost-effective than the cost of advertising.
A benefit for amateur electronics enthusiasts
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JLCPCB offers a "Global Standard Shipping" where I can get 5 boards shipped for $1.50, so the total for me is $3.50 for 5 boards delivered. They seem to be delivered by contractors in their own cars, so nothing to do with the postal service. Probably the rise in cheap tat sold by the likes of Temu and Shein has created cheap shipping channels too.
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Yeh who cares!
The Chinese Govmint can copy my PCBs if they want!
JLC have utterly transformed PCB manufacturing and Yes I used to use OSHPark, however they're way more expensive.
I use FedEx for shipment (to UK) and get them in less than 2 weeks, 10 days on average.
I know some PCB manufacturers use JLC and sell on as their own, naughty.
Kinda makes you wonder why folk use anything other than a PCB now? I guess they haven't discovered JLC?
J.
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A 20 feet container costs around 4000 EUR to ship, my numbers might be a bit outdated. This is port to port.
It can be loaded up with ~ 20 Tons.
5 x 100x100 PCB with packaging weights less than 0.5kg. So the container might be loaded up with 40.000 PCB packages, and the cost of shipping it is ballpark 0.1 EUR. The rest is paid for handling.
They probably use rail to send it, because its 12-18 days not ~30-40. But ballpark the price will be the same, even if its 2x it's still only 20 cents per order.
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People who do not know and understand how things work will very often imagine and believe complicated conspiracy theories rather than say to themselves they just do not understand it.
Most people tend to consider the cost of producing something must determine the final sales price but this is not how companies work. Companies try to make as much profit as a whole unit and often that means making more money in one product or sales line and less money in another line or even "losing" money.
Airlines often are selling seats at a loss. A seat sold at low price brings in more dollars than a seat which goes empty.
Many companies will sell at a higher price in one market and at a lower price in another market because they figure that is what brings the highest yield.
Suppose a container is shipping tomorrow and it has some free space left over. That space can be offered at a very low price rather than just let it go empty. There are many consolidators in China who do just this. If you have a big load which is time sensitive and not so much price sensitive then you pay higher rates than if you have a load which is less time sensitive and can be fitted into space which would otherwise go empty.
The entire load of a container may not be paying all the same rates. And the shipper - consolidator only cares that the entire shipment makes him money.
Same thing with a factory where they would lose more money by having unproductive capacity than by selling at a low price. The individual price is almost meaningless. What counts is the entire profit and loss account at the end of the year. Most people just have no idea about all this.
Many companies lose money when they introduce new products or activities.
But it is easier to find a simple conspiracy explanation than to educate oneself. Conspiracy explanations are generally the consequence of ignorance.
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People who do not know and understand how things work will very often imagine and believe complicated conspiracy theories rather than say to themselves they just do not understand it.
Most people tend to consider the cost of producing something must determine the final sales price but this is not how companies work. Companies try to make as much profit as a whole unit and often that means making more money in one product or sales line and less money in another line or even "losing" money.
Airlines often are selling seats at a loss. A seat sold at low price brings in more dollars than a seat which goes empty.
Similarly, it costs a sufficiently automated PCB company very little to fill unused space on a standard-sized panel with multiple additional designs.
All that matters is that the total income for some number of panels exceeds the cost - being able to sell otherwise-unused capacity for peanuts is a good marketing tool to attract customers for production orders
This only works once you have sufficiently high order volume, so attracting more customers is a very important part of the overall business model.
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People who do not know and understand how things work will very often imagine and believe complicated conspiracy theories rather than say to themselves they just do not understand it.
Most people tend to consider the cost of producing something must determine the final sales price but this is not how companies work. Companies try to make as much profit as a whole unit and often that means making more money in one product or sales line and less money in another line or even "losing" money.
Airlines often are selling seats at a loss. A seat sold at low price brings in more dollars than a seat which goes empty.
Similarly, it costs a sufficiently automated PCB company very little to fill unused space on a standard-sized panel with multiple additional designs.
All that matters is that the total income for some number of panels exceeds the cost - being able to sell otherwise-unused capacity for peanuts is a good marketing tool to attract customers for production orders
This only works once you have sufficiently high order volume, so attracting more customers is a very important part of the overall business model.
There are many such PCB manufacturing factories in China.JLCPCB just developed overseas business
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If this was that simple then why the West is not doing it.
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If this was that simple then why the West is not doing it.
At the point where you can pony up the capital needed to setup such a factory here, you can get more profit by focusing on large businesses and military manufacturing, just like the existing PCB factories do.
Would you voluntarily choose a business niche with smaller profit projections for the same investment?
Unless you are a billionaire who decides they'd like to see PCB prototyping locally, you'll be hard pressed to get the investment. Plus, for the same reason, it'll be very hard to find executives who agree with that plan, instead of diverting to the more common approach with bigger profit opportunities.
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If this was that simple then why the West is not doing it.
As I have already said, western companies are doing it all the time, every day, and twice on Sundays.
Almost 40 years ago I was purchasing for a company and we were looking for a corrugated cardboard box, a rather small box. In my conversations with one supplier who had given me an estimate which was kind of high he mentioned that if we made some changes in the geometry of the box then he could do it for like 1/10th because they could fit it in the scrap part of some other order so basically it would be done using material which would go to srap.
They start with huge sheets of corrugated cardboard and they try to fit several orders in a way that minimizes waste but there is always waste and if you can fit a new order in that waste area then you got something for free and any return you get is free money.
This was at a time when computers were not as ubiquitous as they are today but they had a computer program just testing millions of combinations so they could minimize waste.
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They start with huge sheets of corrugated cardboard and they try to fit several orders in a way that minimizes waste but there is always waste and if you can fit a new order in that waste area then you got something for free and any return you get is free money.
Not only that, it saves you from having to dispose of the scrap material. Some can be sold, but other scrap materials will cost the company money to get rid of.
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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
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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?
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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.
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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.
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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.
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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.
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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.
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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.
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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.
1 hour video tour of JLCPCB. (https://www.youtube.com/watch?v=jTBOSob5MLg)
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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.
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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.
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"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.
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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.
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A 20 feet container costs around 4000 EUR to ship, my numbers might be a bit outdated. This is port to port.
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By ‘outdated’ do you mean pre COVID? I feel is much more now, but do not have recent data myself.
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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.
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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...
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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. :-/O
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A 20 feet container costs around 4000 EUR to ship, my numbers might be a bit outdated. This is port to port.
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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.
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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).
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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
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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.
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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)
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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.
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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.
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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...
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I think one point that is absent here is that JLCPCB and others like them use a COMBINATION of things to achieve the low cost. They are highly automated. But they use an advanced MANAGEMENT system to utilize that automation to the max. Then they combine that with the least expensive shipping and every other advantage they can find. They maximize all the parts of getting a part to the customer at the least expensive cost.
In contrast to this I have seen so many US companies that offer only one or two of the elements that minimize the cost. For example, some US companies only offer one or two choices of shipping services. They either have a "deal" with one shipping company which locks in high prices or just don't want to take the trouble of using multiple services. I KNOW that you don't have to ship thousands of packages a day to get better rates. You just need to seek those better rates. I worked for a US company that shipped around 50 or 100 packages on a good day and often much less on a slow one. They had a shipping room set up for more than five different shipping companies. Those companies provided the scales and boxes and envelopes needed and, of course, made morning deliveries and evening pick-ups. One shipping clerk easily handled all the company's shipments, each at the best price. They beat the various services against each other to obtain the lowest prices all the time. This required a good shipping clerk and the will to do the needed work. I know all this because that company allowed the employees to take advantage of the lower rates. And I did: I was able to ship things at great rates.
This in in contrast to US companies that have much larger shipping volumes but only offer one choice of shipping service. Why? They just don't see any advantage in taking the extra effort that might help the customers. That does not mean that there is no potential advantage there. It means that they just don't want to take the effort.
But this is only one example of what companies can do in only one area of their processes. If they truly want to be more competitive on the world stage, they need to look at ALL areas where things can be improved for the customer - like the Chinese companies are doing. Not just one area, but ALL areas, considered together.
I fear that the US manufacturing industry has simply lost the will to innovate.
People who do not know and understand how things work will very often imagine and believe complicated conspiracy theories rather than say to themselves they just do not understand it.
Most people tend to consider the cost of producing something must determine the final sales price but this is not how companies work. Companies try to make as much profit as a whole unit and often that means making more money in one product or sales line and less money in another line or even "losing" money.
Airlines often are selling seats at a loss. A seat sold at low price brings in more dollars than a seat which goes empty.
Similarly, it costs a sufficiently automated PCB company very little to fill unused space on a standard-sized panel with multiple additional designs.
All that matters is that the total income for some number of panels exceeds the cost - being able to sell otherwise-unused capacity for peanuts is a good marketing tool to attract customers for production orders
This only works once you have sufficiently high order volume, so attracting more customers is a very important part of the overall business model.
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It’s also very cheap in China
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A perfect comparison is ExpressPCB vs. JLCPCB.
I had used ExpressPCB for a decade and half, and during that interval, the price went from reasonable to eye-watering, specially for a single-off project.
But let’s put the price aside for a moment, and concentrate on the different features available.
With expressPCB, you are basically stuck with a rectangular, 0.060” thick, 1 oz copper, FR4 green board. No slots, nor large holes, nor odd shapes, nor connector cutouts available. No soldermak color options. No thinner or thicker FR4 stock. No board materials different from FR4, no flexible boards, no different copper weight. No filling or tenting of vias. With the Classic version, silkscreen is only available for the top side. Only PbSn HASL finish. No plain holes without a pad. This is from the top of my head, I am sure there were other limitations. The component library is prehistoric, at least it was the last time I used it.
And when I have had issues with my order, which to my embarrassment I must admit have been several, I have always found that the JLCPCB’s customer service is heads above that of ExpressPCB.
It is not only the much higher price, the only reason that nowadays I no longer use ExpressPCB.
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Another one.
https://www.youtube.com/watch?v=5IiIMJNsoDU (https://www.youtube.com/watch?v=5IiIMJNsoDU)