Super Micro Moving Manufacturing Outside China to Allay Spyware Fears
Motherboard manufacturer Super Micro is moving manufacturing completely outside China to allay fears from customers on spyware implanted by China. Bloomberg in October 2018 put out a sensational article alleging that Super Micro, which specializes in server motherboards bought in bulk by data-centers and cloud companies, contain spyware by the Chinese government designed to spy on US enterprises. Super Micro was quick to refute the article as baseless, but by then the damage to its reputation was done. Faced with declining sales by as much as 10 percent despite rapid industrial CAGR growth, the company is now forced to relocate manufacturing outside China not just to allay these fears, but perhaps also to reduce its import tariff burden imposed by the US government on a spectrum of electronics goods manufactured in China.
China had a manufacturing strangehold on server motherboard manufacturing, amounting to 90 percent of server motherboards shipped in 2017. In 2018, however, with the the US-China trade-war underway, that figure dropped like a rock to just 50 percent, a dramatic fall for just one year. Server component manufacturers are relocating to other countries, such as Taiwan, Vietnam, and Malaysia. Super Micro is relocating to Taiwan, with a new factory set up in Taoyuan at a cost of $65 million.
China had a manufacturing strangehold on server motherboard manufacturing, amounting to 90 percent of server motherboards shipped in 2017. In 2018, however, with the the US-China trade-war underway, that figure dropped like a rock to just 50 percent, a dramatic fall for just one year. Server component manufacturers are relocating to other countries, such as Taiwan, Vietnam, and Malaysia. Super Micro is relocating to Taiwan, with a new factory set up in Taoyuan at a cost of $65 million.