An excellent question.

And Eric points out some compelling data for why manufacturers might be reconsidering their choice of geography, including substantial hikes over the past 30-plus months in the average, non-weighted cost of fully burdened labor in China: over 50% for board assemblies and over 100% for box-build.  Eric also correctly points out that OEMs have taken a certain amount of builds back in-house. (Alcatel-Lucent and Nokia are two widely noted examples.)

But it’s his next comment – almost a throwaway line – that caught my attention: “[T]he pursuit of the next low-cost region continues, with countries like India, Vietnam, Ukraine, Tunisia, and Macedonia garnering the attention of the industry.” 

That’s frightful. The Ukraine has a host of roadblocks, not the least of which its much-publicized battles with Russia and general political instability. Vietnam has been oversold; after nearly a decade of temptation, it has simply failed to take hold as an EMS hub. And while the CIRCUITS ASSEMBLY EMS Directory finds that two major EMS companies – Zollner, the world’s 12^th largest EMS company (and largest privately held one), and LaCroix have factories in Tunisia, the nation’s population is just 10.3 million, not enough to accommodate a wave of production. Macedonia is even smaller: 2.1 million. Moreover, it is surrounded by mountains that make it difficult to easily move product to other locales.

Thailand, on the other hand, doesn’t garner much ink, but in my opinion stands as a far more attractive area, with a population of 63 million, relative political stability, the experience of major EMS companies (Cal-Comp and Fabrinet, among others), a cadre of local English speakers, and the attraction of Bangkok.

And, it says here, the food’s darn good too. For some reason, that’s always ignored.

Ed.: Comment on this here.