Shenzhen’s factory hub status draws young tech companies seeking edge in hardware
Technology start-ups are taking a closer look at Shenzhen, drawn by a development ecosystem reputed to offer an edge over Silicon Valley
Shenzhen’s prominence as a manufacturing hub is gaining kudos among young technology companies, especially those with a hardware focus, according to industry participants.
Success stories such as as drone maker DJI, and smartphone manufacturer Huawei, both of which have chosen Shenzhen as their headquarters, have drawn attention to the value of being closer to the technology manufacturing ecosystem.
“In Shenzhen, the supply chain is amazing and there are a series of software parks,” said Benjamin Joffe, a partner at HAX, one of the world’s most active early stage investors in hardware. “［Compared with Shenzhen,］everything in Silicon Valley is expensive, there is no supply chain and little expertise about manufacturing.”
“The supply chain is the most important thing that makes Shenzhen the capital of manufacturing,” said Allen Zhang, founder of Crazybaby, a maker of earphones. “There are a lot of satellite cities around Shenzhen such as Dongguan, Huizhou, Zhongshan [within one hour drive from Shenzhen center] and they can form a complete supply chain providing almost everything from raw materials to computer components at very low cost.”
Eli Harris, founder and chief executive of Ecoflow Tech, a personal energy storage start-up valued at more than US$10 million said there were advantages in being located in close proximity to centres of production.
“The people in the city [Shenzhen] know how to enlarge factory production efficiently and they are pragmatic and have real experience in manufacturing,” said Harris. “That is a big advantage of the city.”