The question sounds like a price comparison and it is not. Two contract manufacturers quoting the same board can differ by three times on the assembly line item and still land within ten percent of each other once components, tariffs, freight, scrap, and your own engineering time are counted. Where the boards get built is a supply chain decision that affects cash flow, response time, IP exposure, and sometimes whether you are legally permitted to sell the product at all.
What you are really buying: turnkey or consigned
Settle the sourcing model first, because it changes the arithmetic more than geography does.
Turnkey means the assembler buys the bare boards and every component, builds, tests, and ships finished assemblies. One purchase order, one throat to choke. You pay a markup on parts, typically ten to twenty-five percent, and accept whatever distribution channel the assembler uses.
Consigned means you buy and ship the parts and the assembler charges only for labor and setup. You keep control of sourcing, avoid the markup, and eliminate one class of counterfeit risk. You also own every shortage and the kitting paperwork.
Partial turnkey is what most companies land on: the assembler buys passives and commodity parts, you supply the processor, radio module, or anything long-lead and expensive. Consigned suits low volume with expensive parts; turnkey suits volume and is close to mandatory offshore.
Where the cost difference actually comes from
| Cost element | Typical US | Typical China |
|---|---|---|
| Engineering and setup NRE, first build | $400 to $1,500 | $50 to $400, often waived |
| Stencil | $100 to $250 | $25 to $80 |
| Per-unique-part setup and programming | $8 to $25 per part number | $1 to $8, frequently bundled |
| Assembly labor at volume | Higher, but a small share of a dense board | Lower |
| Bare PCB fabrication | More expensive at all volumes | The largest single gap |
| Components | Same global market and pricing | Same, plus local access to some parts |
| Shipping to your door | Days, low cost | Air days, ocean five to eight weeks |
| Import duty | None | Applicable tariff rates |
Two things fall out of that table. First, the gap is dominated by fixed charges and bare board fabrication, not assembly labor, which is why the difference feels enormous on ten boards and shrinks at ten thousand. Our breakdown of PCB prototype cost shows how fixed costs dominate small quantities.
Second, components are a global commodity. A reel of capacitors costs about the same wherever it is bought, and on a typical board the bill of materials is sixty to eighty percent of finished cost. If your board carries a $12 processor and a $6 radio module, moving assembly offshore addresses a shrinking slice of the total. Do the math on your actual BOM first.
Tariffs and freight change the answer
Assemblies imported from China have been subject to additional tariffs under Section 301 for several years, layered on the normal duty rate. Rates move, so verify the current rate for your HTS code. A double-digit tariff applied to the full landed value of a finished assembly, components included, can erase an assembly-cost advantage entirely. Our guide to US import duties and tariffs on products made in China covers classification and valuation.
Freight adds cost and, more importantly, time. Ocean shipping is cheap per unit and takes five to eight weeks door to door. That transit time is inventory you cannot sell, and it is the delay between discovering a defect and receiving corrected units. See our comparison of ocean freight versus air freight.
Quality: the standard matters more than the country
The idea that domestic assembly is inherently better quality has not been true for a long time. Top-tier Chinese assemblers serving global brands run better process control than many small US shops, and the variance within each country is wider than the difference between them. What determines quality is what you specify and verify:
- Workmanship class. IPC-A-610 Class 2 is the commercial default; Class 3 is for high-reliability work and costs more. State it in writing, because an unstated class means Class 2.
- Test coverage. Automated optical inspection is standard, X-ray is essential for BGAs, and in-circuit or flying probe testing catches shorts, opens, and wrong-value parts that optical cannot.
- Functional test. The highest-leverage thing you can supply is a functional test fixture with a pass or fail result the operator cannot argue with. Our guide to production test fixtures explains why every product needs one.
- Component authenticity. The real offshore quality risk, and it comes from open-market brokers rather than the assembler's soldering. Insist on authorized distribution and read our article on keeping counterfeit components out of your supply chain.
When domestic assembly is not optional
Some products cannot go offshore regardless of cost:
- Defense and ITAR-controlled hardware. Technical data subject to ITAR cannot be shared with foreign persons without authorization, which rules out sending the design package abroad, and federal contracts add domestic sourcing and cybersecurity obligations. Our overview of defense product development covers the contracting side.
- Medical devices, where the assembler must run a quality system compatible with yours. Qualified suppliers exist in both countries, but audit travel and change-control response favor domestic early on.
- Products with genuinely sensitive IP that would be trivially cloneable in an easy-entry market.
- Anything needing rapid iteration, because a two-day feedback loop beats the unit savings during development.
The split most companies land on
The sensible pattern is domestic for prototypes and early builds, offshore for volume. During development you value engineer access and fast turns. A US assembler will talk to your engineer on the phone, flag a footprint problem before building, and turn a five-board run in a week. That responsiveness is worth several times the offshore price, because the boards are a rounding error next to engineering time.
Once the design is stable and volume justifies the fixed costs, an offshore transfer is worth evaluating. Do it deliberately: qualify the new assembler with a small build, compare first-article results against existing units, keep the test fixture identical, and expect a learning curve. The broader considerations are in our comparison of manufacturing in China versus the USA.
Either way, the design package decides how smoothly it goes. A complete, unambiguous data package with clear part numbers, approved alternates, and a documented test procedure gets you good boards from either country. Our guide to DFM for electronics covers what belongs in it.
Projects House designs electronics for manufacture and manages assembly with vetted partners at home and overseas, including supplier qualification, test fixtures, and the transfer when volume justifies it. Get in touch through our contact form.