REDMOND, Wash. — There is nothing ordinary about Surface Hub, a gargantuan touch-screen computer that Microsoft is about to start selling to companies as a high-tech replacement for conference room whiteboards.þþThe largest Surface Hub, measuring 84 inches diagonally, looks like an iPad that has gone through a growth spurt. The 4K resolution of the screen produces dazzling images. At $20,000 apiece, a price Microsoft plans to announce on Wednesday, it should.þþJust as unusual is where Microsoft is building the Surface Hub: Wilsonville, Ore., just outside Portland and about 200 miles south of the company’s headquarters in Redmond, Wash. That puts the Surface Hub in a rare category, since the majority of Microsoft’s better-known devices, like the Xbox game console, are made overseas.þþIn recent years, there has been a surge of optimism about the prospect of high-tech manufacturing jobs returning to the United States after some headline-grabbing moves, such as Apple’s decision to build its Mac Pro computer in Texas starting in 2013. But they remain outliers in an industry that has outsourced to Asia the making of everything from game consoles to smartphones.þþThe Surface Hub, though, is an illustration of an exotic tech product that its makers believe can be manufactured cost-effectively in the United States. The product is so unusual — representing one of the largest touch screens of its kind — that Microsoft could not find existing assembly lines in Asia to build it on, the company said.þþAt 220 pounds, the largest Surface Hub is expensive to ship long distances. And its already hefty price means any additional labor costs associated with making it in the United States will be harder for customers to detect.þþ“It makes a lot of sense to manufacture in the U.S.,” said Steve Hix, an entrepreneur who founded several Portland-area tech companies, including one that had a manufacturing facility in Wilsonville. “The key issue is quality.”þþJobs in the manufacturing sector are a shadow of what they once were, despite improvements in employment over the past few years. In the computer and electronic products sector, employment is down 41 percent from 15 years ago, to just over one million jobs, according to estimates by the Bureau of Labor Statistics.þþThe creation of high-tech assembly lines in the United States over the past few years stirred up hopes of a broader resurgence. Apple said it had invested more than $100 million to bring the manufacturing and assembly of the Mac Pro — a fairly high-end computer — to Austin, Tex. Lenovo, the Chinese technology company, makes Think-brand computers in Whitsett, N.C., at a plant that employs about 100 people in manufacturing.þþBut there have also been setbacks. Not long after Motorola Mobility started building a smartphone called the Moto X at a Texas factory with Flextronics, a contract manufacturer, disappointing sales drove it to shutter the plant. (Motorola was owned by Google at the time and is now owned by Lenovo.)þþHal Sirkin, a senior partner at the Boston Consulting Group, said some “reshoring” of jobs from overseas was taking place. “It’s good for marketing,” he said, “but we don’t see in the tech space yet a wholesale movement of companies back to the U.S.”þþIn an interview last week at Microsoft, Mike Angiulo, a corporate vice president, demonstrated what Surface Hub could do, flanked by an 84-inch model on one wall and a 55-inch model (price: $7,000) on another.þþPeople in a meeting can scribble on the screen with a stylus and pan around an image using their hands. Everything on the screen, along with video images of meeting participants, can be shared over the Internet with people in other locations.þþA company making a new piece of hardware often piggybacks on the supply chain that has emerged for other products, taking advantage of the economies of scale that have already been achieved for screens, microprocessors and other components. Mr. Angiulo said no such option existed for the Surface Hub’s giant screen.þþ“We are the scale,” he said.þþOne reason Microsoft’s factory is in Wilsonville, a city of about 21,000 about 20 minutes south of Portland, is that the Surface Hub originated at a start-up called Perceptive Pixel, which Microsoft acquired in 2012. The start-up had an assembly plant in Wilsonville for its giant touch-screen device, which then sold for about $80,000 and was used by broadcasters like CNN to display election results and other data.þþMicrosoft said the factory, covering about four acres with 18 docking bays for delivery trucks, now has a combined engineering and manufacturing staff of a couple of hundred people, about seven times that of the original Perceptive Pixel team. Although many components in the product will come from overseas, the Surface Hub will be stamped with the phrase “Manufactured in Portland, OR, USA.”þþMr. Angiulo would not rule out eventually making the product in other locations, though he said Microsoft would first “have to launch this product and get it right.”þþKristin Retherford, the economic development manager for Wilsonville, said Microsoft had taken over one of the largest empty buildings in the city, which had seen vacancy rates in its industrial neighborhood soar after the recession of 2008. She said the jobs in Microsoft’s plant are higher-paying than in other similar businesses in the area.þþAs it has increased Wilsonville’s population, the Microsoft factory has lifted demand for other services. Brewpubs and other restaurants are opening in the city.þþ“It had a very significant impact,” Ms. Retherford said.þþOregon has a long history of tech manufacturing. The state’s largest private employer is Intel, the chip manufacturer, which has about 18,600 workers there. Bill Calder, a spokesman for Intel, estimates that several thousand of those employees are directly involved in manufacturing in the state, which is home to a new $6 billion, 2.2-million-square-foot chip-making facility.þþWhile Oregon saw big high-tech job losses from 2000 to 2003, employment in the state’s high-tech manufacturing sector has been stable in recent years. “A lot of that has to do with the anchoring impact of Intel,” said Josh Lehner, an economist with the State of Oregon.þþThe Surface Hub is also benefiting from the manufacturing expertise of the alumni of Oregon’s once vibrant display industry. Mr. Hix said his company InFocus once made projectors at a factory in Wilsonville.þþWhen he ran InFocus from the late 1980s to 1994, Mr. Hix said he resisted sending the manufacturing to Asia because he believed the quality of products would suffer. He watched with dismay as InFocus and other local tech companies later moved their production overseas. “It’s disappointing to me,” he said.þþMr. Hix had a downbeat assessment for what would happen to the manufacturing of the Surface Hub if the product took off and the production process was refined. “Once they get all the problems out of it, it will go offshore,” he said.
Source: NY Times
