Report: Low yields plaguing Microsoft Surface magnesium chassis production

Report: Low yields plaguing Microsoft Surface magnesium chassis production

Summary: Microsoft is reportedly suffering from poor yields in the production of the chassis, threatening to keep the company from producing Surface tablets in mass quantities.

TOPICS: Microsoft, Tablets

The story about Microsoft's decision to jump into the tablet wars with its own hardware centers on Apple's ability to control its supply chain and the extreme lengths it goes to in order to ensure it can corner the market on the materials it needs -- the now famous example being how Apple purchased huge amounts of aluminum from a mine in Australia for its iPad chassis.

Microsoft's new Surface tablets were to be forged from the same attention to such details. During its launch event, the company took pains to emphasize the quality of its magnesium chassis (which will be similar ), though it apparently only turned to that material when it realized it couldn't procure enough magnesium-aluminum cases. According to a DigiTimes report, however, Microsoft is suffering from poor yields in the production of the chassis, threatening to keep it from producing Surface tablets in mass quantities.

If the "upstream supply chain" sources DigiTimes cites are to be believed, the Chinese company that is manufacturing the magnesium chassis is "a second-tier maker," which has resulted in yields that could make it difficult for Microsoft to reach its goal of producing millions of Surface tablets in the next year.

Microsoft now apparently has to spend time trying to figure out ways to improve the yield from its manufacturing process. So while the company has clearly learned some valuable lessons about how Apple can succeed through its hypervigilance when it comes to its supply chain, its late entry into the game means it's going to suffer some severe growing pains. It will need to be more proactive in securing materials so it doesn't need to rely on alternatives, and then it will need to work with manufacturers to perfect production techniques.

It's a tall order -- especially when Microsoft is under pressure to keep prices as low as possible to compete against the iPad -- but that's the world the company finds itself in today. Does Microsoft have what it takes to master the hardware supply chain like Apple has? Let us know your thoughts in the Talkback section below. 

Topics: Microsoft, Tablets

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  • Microsoft has already lost!

    By entering into Apple's world of hardware this late in the game, Microsoft has technically, already lost. Microsoft? "Soft" meaning software, became the world's most successful company with a premise that software was the key. That strategy works in their world, but Apple decided to control every ounce of the manufacture of a superior product as an alternative to the PC world. Apple competes against Apple, as consumers cannot buy a different Apple based computer. Microsoft has hiccuped for years now because Apple changed the game by not only providing an alternative to a Windows dominated culture, but an alternative to the plastic throw away machines on which windows runs. Even Windows runs better on a Mac. Remember Windows? The software company? Oh yeah, those guys!
    Stephen Wood
    • Too much of an apple fan???

      Whats your point?
      • My point?

        I think I made my point. Microsoft can't compete out of their own space - the software space. I'm no mega billionaire, but even I know better than to announce a product that I don't have the manufacturing capabilities to produce. This is what happens when a company that is struggling to remain relevant ventures into unknown territory without truly doing their due diligence. My post has nothing to do with being Mac loyal. I'm just stating an opinion based on experience in life.
        Stephen Wood
        • Allow me point out

          an example of Microsoft hardware that worked: Xbox. They also produced the mouse, you know. So I won't write them off completely.
          • Two examples in 20 years?

            I'm impressed.

          • Well...

            MS has made a lot of hardware:
            - Sidewinder - Joystick
            - Sidewinder - Gamepad
            - Sidewinder - Strategic Commander (I loved this thing till someone spilled Coka Cola all over it :( )
            - Corded & Cordless Mice
            - Corded & Cordless Keyboards
            - Xbox + all it's extra goodies (Kinect, Controllers etc.)

            So it seems that there are more than just 2 examples... and that IS within the last 20 Years.


            If you select that you can see the list of hardware (check the downloads section) that MS currently has out in the wild.

            my 2c
          • xbox...

            Mouse, hardly in the same league.
          • Xbox is not a good example

            Google Xbox Red Ring Of Death.....

            Microsoft can't get hardware right either.....
          • Well, if you want to bring up six year old problems..

            I guess we can remember the "spontaneously combusting" laptops from a couple of different companies who apparently are manufacturing gods.

            Of course, that would break your double-standards, wouldn't it?
          • ???

            iPhone 4 antenna... over heating iPads... burning batteries... come on! I guess the same goes for apple...
          • Dont Forget

            Dont Forget The PUCK Mouse
          • Ahhhh yes - the puck mouse...

            ..otherwise known as the original "you're holding it wrong" device from Apple.

            For years, people apparently were using mice wrong by letting the palm of their hand touch the bottom of the mouse.. The only way to make sure the puck worked right was to "curl" your fingers over it.
          • Apeti, you can't

            mention those Apple issues. Fanbois don't notice them. There's a great one on iPhones where you have to bend the power cable connector to pop the 'start' button back into place. Quality device.
          • While I agree the RROD is not relavent anymore

            your list isn't even comparable due to both over-hype and percentages.
          • Red Ring of Death?

            Why are you still talking about that? They haven't had that problem in years. No one gets hardware "right". The two people closest to me who have gotten Mac Book Pros have had a terrible time with them. I have another college friend who had a Mac desktop and has never had a problem with it (as I have never in the last 20 years with 4 windows desktops). Electronics can go bunk. Some do so at a greater rate but no one does it perfectly. For PCs I prefer Windows over Apple because I can buy 3-4 times as many at the same price point, making potential technical problems less important and meaning that I can always have more up to date hard ware for the same cost.
          • They made a mouse did they!

            That's simply amazing. Given that level of knowledge behind them I'm surprised the didn't go building spaceships instead of tablet computers. I mean, after all, they built a mouse!! Takes some going that does.
          • Your sarcasm falls apart

            I dont have to tell you that at the time Microsoft made their mouse, mouse qualified to be refered to as a sophisticated piece of hardware, do I?
            Let me also intorduce you to the concept of technology maturity. If you could make a mouse twenty years ago, should a tablet be too much of a big deal to you today? Twenty years is more than enough to develop your skills, isnt it, Bozzer? In whatever job you are today, would it be smart or fair to compare your skills with that of twenty years ago?
          • Hmmmm...

            ... I remember using a mouse in 1980 and a little place called NOSC, now SPAWAR, in San Diego.

            Microsoft was very late to the mouse.
          • What's your point?

            Nobody remembers or cares what NOSC or SPAWAR is. Google (or Bing) NOSC and you get North Olympic Salmon Coalition.

            If Microsoft was late to the game, then NOSC (whatever that is) was disqualified from it long ago, and was asked not to return.
            milo ducillo
          • They built THE mouse, not A mouse

            Yes, it was a piece of hardware that is now ubiquitous with any personal computer. So yeah, there's a lot to be said about being one of the first to pioneer a technology that becomes globally recognized and used. Even if it's a simple mechanical device in nature.
            milo ducillo