GIGABYTE Loses $550 Million in Market Value after Calling Chinese Manufacturing “Low Quality”

Tsing

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Image: GIGABYTE



Taiwanese electronics giant GIGABYTE recently published a controversial post on its website that suggested it was better than its competitors because it didn’t outsource any production to “low-cost, low-quality” Chinese manufacturers. That wasn’t the brightest idea, as Chinese social media and e-commerce operators such as JD.com Inc. and Suning.com Co. quickly retaliated by removing GIGABYTE’s products from their stores, prompting company shares to tank by around 10 percent ($550 million). GIGABYTE has removed its original post and published an apology stating that it’s actually proud of products that are made in China.



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The remarks sparked an outcry on Chinese social media and prompted e-commerce operators like JD.com Inc. and...

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Hmm… shares tanked but not enough time to evaluate if there were any impact on sales or revenue. Given that everything is perpetually out of stock, I doubt it will have any significant effect on either. This is just stock market reacting to click bait.
 
C'mon We all know chinese manufacturing quality is dubious at best. THere is a reason why sometimes they themselves try to fool less intelligent people by writing made in PRC instead of made in china.
 
C'mon We all know chinese manufacturing quality is dubious at best.
I've no love for the PRC- but despite their best efforts, the PRC is not the people of China. There's nothing that the Chinese people cannot build, just like the rest of the human race.

Instead, this catastrophe is all of Gigabyte's making. Any complaints about 'Chinese manufacturing' are really self-owns as the quality literally comes down to Gigabyte's management and quality control processes. Again, see all of the other companies that have absolutely no problem mass-producing very high quality consumer electronics in China.
 
I've no love for the PRC- but despite their best efforts, the PRC is not the people of China. There's nothing that the Chinese people cannot build, just like the rest of the human race.

Instead, this catastrophe is all of Gigabyte's making. Any complaints about 'Chinese manufacturing' are really self-owns as the quality literally comes down to Gigabyte's management and quality control processes. Again, see all of the other companies that have absolutely no problem mass-producing very high quality consumer electronics in China.
Don't make it about the people, of course nobody questions the individual ability of chinise people, it is a culture / system problem. A system that lets sweatshops like foxconn exist. With enough QA of course unskilled biorobots with slave wages can put together an iphone. But I'd rather fairly paid skilled labourers built my stuff. QA costs money too, the better the labor force the less QA is necessary. But also there is the humanitarian side.
 
I've no love for the PRC- but despite their best efforts, the PRC is not the people of China. There's nothing that the Chinese people cannot build, just like the rest of the human race.

Instead, this catastrophe is all of Gigabyte's making. Any complaints about 'Chinese manufacturing' are really self-owns as the quality literally comes down to Gigabyte's management and quality control processes. Again, see all of the other companies that have absolutely no problem mass-producing very high quality consumer electronics in China.

No Chinese manufacturing is not up to other standards even with stringent QC. That is why they are cheaper. You don't get low prices and quality. Look at their turbofans, still behind Cold War era Russian standards.
 
Don't make it about the people, of course nobody questions the individual ability of chinise people, it is a culture / system problem. A system that lets sweatshops like foxconn exist. With enough QA of course unskilled biorobots with slave wages can put together an iphone. But I'd rather fairly paid skilled labourers built my stuff. QA costs money too, the better the labor force the less QA is necessary. But also there is the humanitarian side.
Have to be specific ;)

Being a bit of an audiophile, and also a photographer / photography geek, there's a lot of quality work and quality innovation coming out of Chinese companies.

Further, while I agree wholeheartedly that I'd prefer laborers to be paid and treated fairly, it's important to understand that this is a 'privileged' perspective. One example I ran across was that of child labor: people were incensed that children were being put to work and the operation was closed down. And instead of making clothes (or whatever), the children wound up in brothels.

Obviously that's somewhat extreme but it's worth considering the 'whole' problem, and understanding that first-world outrage doesn't solve third-world problems, and that these problems will only be solved through painstaking efforts over time. Which I wholly expect the USG to champion!

No Chinese manufacturing is not up to other standards even with stringent QC. That is why they are cheaper. You don't get low prices and quality. Look at their turbofans, still behind Cold War era Russian standards.
Turbofans are still out of their grasp, so yeah, the PRC is still buying Sukhois for their best pilots and working with Boeing to procure engines for passenger jets. Don't have a clue if / when they'll catch up in that regard as even the Russians are pretty far behind other 'western' manufacturers.

Still, while still applicable, that's a bit of an edge case: in many cases, China is perhaps a decade behind indigenously, at the very most. Quality is lower, yes, but improving, and like every other fully industrialized nation has done before, China is both learning everything they can as well as innovating and tuning for their own needs.
 
I can’t help but think European countries said the same thing about US manufacturing in the 30s/40s.
 
I can’t help but think European countries said the same thing about US manufacturing in the 30s/40s.
More or less, and that's kind of where I'm coming from: it's easy to be annoyed (or worse) at how the Chinese are 'rising', but it's also impossible to criticize them without being at least a bit hypocritical. The Japanese and Koreans did the same thing, just they were on the 'good' side, and remembering that Taiwan is also the 'Republic of China' and made up of the... not communist... political contingent from their civil war, they've done the same thing too, as can be said about Singapore and so many other younger nations.
 
Still, while still applicable, that's a bit of an edge case: in many cases, China is perhaps a decade behind indigenously, at the very most. Quality is lower, yes, but improving, and like every other fully industrialized nation has done before, China is both learning everything they can as well as innovating and tuning for their own needs.

That is the thing, it is not indigenously. It is stolen. They are a decade behind with copying things they have stolen. They lack the ability to significantly innovate on their own. The turbofan example is not actually an edge case, it shows the issue 100%. They did not even steal that. They have been gifted modern turbofans from both Russia and the west for military and civilian applications. Yet, with all the tech in hadn they still can not reproduce it. That is because their abilities are not up to Russian or Western standards. When doing something easy that 4-5% lower quality does not stand out. When doing something difficult that 4-5% lower quality is a disaster.
 
That is the thing, it is not indigenously. It is stolen. They are a decade behind with copying things they have stolen. They lack the ability to significantly innovate on their own. The turbofan example is not actually an edge case, it shows the issue 100%. They did not even steal that. They have been gifted modern turbofans from both Russia and the west for military and civilian applications. Yet, with all the tech in hadn they still can not reproduce it. That is because their abilities are not up to Russian or Western standards. When doing something easy that 4-5% lower quality does not stand out. When doing something difficult that 4-5% lower quality is a disaster.
I'll clarify 'indigenously-produced', and yes, they're copying- that's my point :)

It's just that everyone else has done the same. And in China's case, at least in terms of consumer electronics, their biggest consumer is their own population, for which their companies are copying and innovating with an eye toward serving.

I get the turbofan thing as that's a big one in terms of defense, and in the PRCs case, their 'ring of intimidation', I'm just speaking more in terms of Gigabyte's spectacle as they're clearly very wrong with respect to anything that Gigabyte makes in the mainland. Gigabyte has a tough road ahead.
 
I'm already planning on replacing my msi motherboard with a gigabyte one.
This one hints at one of the routes I was considering that Gigabyte might take: self-own or not, they could 'own' this by announcing that they're moving all production out of mainland China- bonus points if they bring some of it to the US.
 
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