A quick update regarding our commentary at the end of May regarding Google’s Motorola Mobility division prior announcement that it would manufacture its new flagship Moto X smartphones in the United States. At the time, we noted that Motorola had contracted for the manufacture of the Moto X at a facility near Fort Worth Texas but the essential supply chain components were to be sourced outside of the United States.
A recent article published in Bloomberg’s Global Tech Newsletter indicates that teardown analysis from IHS and other firms would indicate that nearly all of the parts are sourced from Asia or Europe. None the less, Motorola can still lay claim to “assembled in the U.S.” which is significant in itself. Motorola is further practicing sourcing to enable U.S. customer personalization.
Supply Chain Matters remains in the point-of-view that the decision to source final assembly in the U.S. remains a bold one and far upstages that of Apple and its prior announcement to assemble a line of Mac computers in the U.S.
According to Bloomberg, U.S. made components amount to little more than 15 percent. DRAM memory is sourced from both Samsung and SK Hynix, both based in South Korea while Samsung also is the supplier for the Moto X LCD screen. The chips that connect the cellular network, support WiFi and run software are provided by Qualcomm which outsources its chip manufacturing to Taiwan based TSMC and Abu Dhabi and German foundries of Globalfoundries. The article further points out that the accelerometer, microphone and near-field communications chips are most likely sourced externally as well. Bloomberg quotes an IHS analyst declaring: “While it’s impossible to tell exactly how many of the components are U.S. made, it probably amounts to little more than 15 percent.”
However, the decision to assemble in the U.S. is more than symbolic since it allows AT&T customers the flexibility to personalize their smartphone with desired color or wooden backs, which is important consideration for supporting personalization features of products. The Fort Worth facility has been reported to be able to employ upwards of 2000 people to support Motorola’s needs.
High tech and consumer electronics supply chain professionals can certainly speak to the long-term realities or viabilities of a more robust consumer electronics value-chain that can be sourced in the U.S., in the case of bragging rights, Google certainly has one up with Apple in efforts to show some form of commitment.