United Audio Buys Onkyo

[M Code]

I don’t know squat about all this production stuff.

I get the argument that we can’t buy some of these parts (semiconductors and other parts) in the US. And that’s why we have to buy them elsewhere.

And I can also understand the argument that it might not be in our best interest to produce all these parts here in the US (pollution and other bad things? ).

Is China the only country we can buy some of these parts now?

We can’t buy the same semiconductors and parts from other countries now?

ATI can’t buy the same parts from Malaysia, Japan, Mexico, or somewhere in Europe?

Basically the crucial internal component suppliers are located in China.. Originally we had multiple component suppliers in the US, Mexico, Europe, Korea, Taiwan and Japan,....
However over the last 15 years China eventually replaced the majority of these suppliers as most of the CE electronics built were being assembled in China. So even now many of the major AVR suppliers Inkel, Anam have moved to Vietnam, for lower labor costs... While the primary Japanese brands such as Sony, Onkyo and Yamaha had moved their assembly to other countries such as Indonesia, Malaysia, Thailand after the 1989 Tiananmen Square protests/riots. Historically Japan is not well liked by many of the countries they occupied for many years including China, Korea..

Bottom line...
To produce these crucial internal components, requires a well experienced, team and a proven track record for quality. As the demand for CE internal components grew many of the original Japanese component suppliers established sister factories in China and so they were already aware of the Japanese standards and qualified. Now after the Trump trade/tariff war we are beginning to see the real objectives of mainland China, just check out the subject of rare-earth metals for more insight.

I could say much more but want to hold back the political comments, but after traveling, negotiating and dealing with China hardware & component factories for >25 years.. Suffice to say this is just the beginning....

Just my $0.02..

 

[AcuDefTechGuy]

What's the difference? Who cares which foreign country that buy them from?

Unless Trump puts tariffs on all foreign countries, for now its just China.

Let’s just look at one specific example -ATI.

They are an American company who has to buy parts that cannot be made in the USA for now. So if they want to stay in business, they have to buy the parts in China or another foreign country.

So if ATI can get all the parts they need from another country (instead of China), then ATI won’t get hit with the China-tariffs.

But if ATI has no other options and they have to buy from China, then they are screwed because they get hit with the China-tariffs.

 

[AcuDefTechGuy]

the crucial internal component suppliers are located in China

So........every American company who requires these parts is screwed.

Because the ONLY way to get these crucial parts is to buy from China, which means they are hit with the China-tariff.

 

[M Code]

So........every American company who requires these parts is screwed.

Because the ONLY way to get these crucial parts is to buy from China, which means they are hit with the China-tariff.

That was exactly the point made by Morris Kessler from ATi in the previously mentioned Time magazine article. As posted previously, certain crucial internal components are only available from China... Since so little CE products are being built in North America & Europe, the component suppliers originally located here either moved off-shore to China and/or closed up shop. There may a few exceptions, but largely certain components are only available from China.
This trend is not new it started 25 years ago, just that it got even more centralized within China as time went on as they continued to build more & more CE products. Note that the USA and leading semiconductor brands located here in the USA may still produce certain advanced processor chips and loading in their proprietary SW, but this is likely the last remaining component category we build here. Commodity ICs for BT, ADCs, DACs, op amps are built either in China or other Far East factories such as Indonesia and Singapore.

Just my $0.02...