Did Microsoft build its own factory for Surface?

It's hard to believe that its been almost four months since Microsoft surprised us all with the announcement of the Surface tablets. The shroud of secrecy around the big reveal was extraordinary - particularly in a year when Apple, who turned clandestine product development into something of an art form for many years, saw almost all of its product secrets leaked well ahead of their announcements.

With the Surface RT finally set to go on sale in less than a fortnight, there's still much that we don't know about Microsoft's new tablets, and even questions previously thought to have been answered appear to remain up in the air. Back in June, we quoted a Bloomberg report claiming that Microsoft had contracted Pegatron to build Surface units - but a WMPowerUser report now claims that isn't the case at all.

An unnamed person "close to Microsoft employees familiar with the matter" - about as useful a citation as 'a friend of a friend of a dog who knew someone I once met', frankly - is said to be the source of a claim that Microsoft has built its own dedicated factory in China. The "huge" factory will be used to manufacture Surface tablets, which the same source stated would be "just the beginning of a new product range", echoing similar claims elsewhere that Microsoft plans to offer more own-brand hardware, including a so-called 'Surface Phone'.

If Microsoft has indeed built its own factory, it would support the assertion that the company is working to become more vertically integrated, relying less on OEMs and ODMs to build hardware, and establishing the kind of software+hardware development cohesion that has brought Apple such success over the last decade. It would also be a strong demonstration that Surface is not just an example of Microsoft trying something new in the hope of selling 'a few million' units, but rather a significant step towards becoming the "devices and services company" that CEO Steve Ballmer alluded to earlier this week.

The problem is, the source of this information is so ambiguously defined that it's impossible to get any real sense of how reliable this claim is. For now, as with so many other questions surrounding Surface right now, your guess is as good as mine, his or the dog's.

Source: WMPowerUser | Top image via Microsoft

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26 Comments

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So the god-tablet Surface is going to be made by China villagers... Really, Microsoft? Really??

There is only one reason to manufacture in China, to do things to your slaves that are illegal to do to workers in most countries that have half-decent labour laws. Microsoft should be manufacturing in Taiwan if they want quality at low cost and treating their workers properly, or South Korea or Japan for quality at high cost. Also the workers will be far more attractive.

Shame on you Microsoft, shame on you.

Uhh, not! I am sure most of you know that the overhead cost for a software company to build and maintain a production plant is astronomical! If it was more efficient build a plant and make devices, Apple would have done it years ago with the iPod. More than likely, MSFT is using a hardware companies like PegaTron, Sharp, KaKatech and Foxconn. The "NEW Microsoft" (Services and Devices) may have a large sum of cash but what they will not do is throw it away without doing some research

That is true, but they have been producing the Xbox for a long time now and might be looking to manufacture it themselves. With increasing talk about Xbox vNext, this could be where it is manufactured.

It's also possible that this is the reason why the Surface Pro is delayed until January.

Its highly unlikely they built a new factory as it would take at least a year of planning,construction and equiping which even for Chinas high rise story a day construction industry is a big achievement,along with huge investment which even for MS is a huge gamble for the shareholder.As to the "leaks" from Apple theres nothing like sprinkling a little gold flake around or salting as it used to be called, to keep interest in a product.

arachnoid said,
As to the "leaks" from Apple theres nothing like sprinkling a little gold flake around or salting as it used to be called, to keep interest in a product.

Yeah, but not this many leaks. There's nothing to be gained when an entire product is leaked before it's even announced.

SteveSaywell said,
Maybe Microsoft will build the new Xbox at their new factory too. Would make sense.

Oh... that's a good idea. That would not be surprising at all.

SteveSaywell said,
Maybe Microsoft will build the new Xbox at their new factory too. Would make sense.

This is exactly what they are doing. This gives MS massive control over quality. There is no way that they are going to take a hit again like they did with the 360.

ahhell said,

This is exactly what they are doing. This gives MS massive control over quality. There is no way that they are going to take a hit again like they did with the 360.

This would be nice. I love the 360, but I am definitely hoping the next XBox has better build quality...

M_Lyons10 said,

This would be nice. I love the 360, but I am definitely hoping the next XBox has better build quality...

I don't understand how anyone loved the 360 when it came out. It had a ~50% failure rate. If that's love then marriage isn't for me.

Back in June, we quoted a Bloomberg report claiming that Microsoft had contracted Pegatron to build Surface units - but a WMPowerUser report now claims that isn't the case at all.

well, maybe pegatron is building the motherboards for surface...

It would make sense for MS to build its own factory only to make the magnesium case of surface, as I guess it is the most costly part of the device, and that may help reduce the cost.


Anyway, this information is surprising since even Apple no longer owns its own factories!
Same for the xbox which is manufactured by foxconn, not MS.

If Microsoft have built a huge factory in China, wouldn't we know about it by now? Surely there must be evidence of it somewhere?

TCLN Ryster said,
If Microsoft have built a huge factory in China, wouldn't we know about it by now? Surely there must be evidence of it somewhere?

Like there should have been leaks of surface details months before the official presentation...

TCLN Ryster said,
If Microsoft have built a huge factory in China, wouldn't we know about it by now? Surely there must be evidence of it somewhere?

It's more likely that the reason why Surface has been such a well kept secret is because they built their own factory. If they started involving outside companies, we'd start seeing leaks... like how months before a new iPhone comes out, we start seeing pictures of new components.

Relativity_17 said,
The only actual question I really have at this point is what color Surface Pro will I get?

You mean the cover/keyboard, right?

Neobond said,
If true, good news

If their workers commit suicide or riot then microsoft won't be able to pass the blame on to pegatron or foxconn.

torrentthief said,

If their workers commit suicide or riot then microsoft won't be able to pass the blame on to pegatron or foxconn.


Why do you even bother posting **** like this?

ahhell said,

Why do you even bother posting **** like this?
actually he made a good point. chinese labors are cheap but the politics over there is very complicated.

torrentthief said,

If their workers commit suicide or riot then microsoft won't be able to pass the blame on to pegatron or foxconn.

Wrong. Microdoft china has nothing to do with MS US. they are by law 2 different companies

iguanas said,

Wrong. Microdoft china has nothing to do with MS US. they are by law 2 different companies

but it would still be a huge PR problem, do you think consumers are really going to care? in most people's minds it's all Microsoft