Report: Low yields plaguing Microsoft Surface magnesium chassis production

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.
Written by Sean Portnoy, Contributor
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. 

Editorial standards