A look at Chinese Value Engineering

Seventy cents doesn’t buy you a lot these days. Maybe some sweets or candies at most. How about a string of LEDs that you can use to decorate your home during the festive season? [Amaldev] was curious to know what was, or wasn’t, inside these blinky LED strings which made them so cheap. He’s done a Christmas LED Light Teardown and shows how blinky LED string lights can be built with the bare minimum of components.

The string he purchased had 28 LEDs – seven each in four colors, a controller box with one push button and a  power cord. Without even knowing what is inside the controller box, the cost of the product seems astonishing based on this BoM. The single push button cycles through eight different light patterns for each press. It even has a faux CE mark for the supply plug. Cracking open the case, he finds that the controller board is sparsely populated with just seven through hole components and a COB (chip on board) module. A simple, 8-bit, 8-pin microcontroller is possibly what controls the device.

[Amaldev] sketches out a schematic to figure out how it works. There are two arms with 14 LEDs of alternating colors, each of which is controlled by an SCR. Two GPIO output pins from the COB control the gates of each of these SCR’s. The button is connected to a GPIO input, and a second input is connected to the AC supply via a current limiting resistor. Most likely, this is used to determine the zero crossing of the waveform so that the COB can generate the appropriate trigger signals for the gate outputs.

It is unlikely that these products are manufactured using automated processes. The PCB production could be automated, but soldering all the wires, fitting it all in the enclosure and preparing the LED string itself would require manual labor. At US$ 0.7 retail on the street, it is difficult to imagine the cost breakdown even when the quantities are in large numbers. Maybe a combination of cheap components, recycled or rejected parts (mains cord/enclosure), lack of safety and protection measures (no fuses, no strain reliefs) and reducing the component BoM to an absolute, bare minimum, coupled with very high volumes lets them pull it off? What are your thoughts – chime in with comments.

63 thoughts on “A look at Chinese Value Engineering

    1. What you mean is “lower wages abroad”. If you haven’t travelled much, you might not be aware that goods and services cost different amounts of money across the world. I’m not saying that unskilled assembly-line workers in China get paid a lot by Chinese standards, but you might be surprised how far your dollar goes over there.

      If everything cost 1/10th of what it currently does wherever you live, you’d be willing to work for 1/10th of your current wage, right?

      1. I hope this is just clumsy phrasing, but so-called “sweat shops” are *absolutely not* the same thing as “lower wages abroad”. To equate the two is to legitimise the brutal working conditions of actual sweat shops.

        Yes, the going rate of labour is lower in SE Asia, and yes, the cost of goods and services scales with it. That’s not necessarily what OP was talking about, and to suggest otherwise ignores the exploitation of workers.

      2. When Foxconn in China had problems with workers jumping off the roof, they fixed the problem. They installed nets around the building.

        Workers can be required to live at the factory, and pay part of their wage for the privilege, while working ridiculously long shifts of very repetitive work.

        Slavery can’t be fixed by paying people.

      3. Our fine “globalist” masters would “level the playing field”, making sure that employers “pay their fair share”, a “living wage” for everyone. All this while attempting to compete head to head with companies in Asia paying $0.10 a week to their laborers. I keep hoping people will see through all the rhetoric but then I see a meeting of the Flat Earth Society is coming up and I just shake my head.

      4. i would also couch that in “certain” goods and services, sure you can get a horrible knockoff of a proper device a bit cheaper than the real thing, in general finished electronics are pretty level between the fab countries and the consumer countries (plus or minus taxes usually)
        Gas for a car, or even the car is generally MUCH more expensive there, though from what I understand, about on par with Europe.
        If anything, I would assume that a ton of these types of things exist so that a company can fall into a specific niche to get a specific government subsidy. sure it costs $2 usd to make and get over there, but as an exporter you get X, as an electronics producer you get Y, and as a factory owner your get Z so, you are making $15 usd on each part before it even gets out of the country.

    2. Lol like fair trade electronics huh?
      Nah pal, this is straight up Mordor stuff right there :(
      I found a slab of rock inside a laptop to give it “heft” one time. Just insane and seeing the hand-soldered repairs on the mobo to get it out the door mad me a little sick at the thought. Kinda made me think of a family living in a box with an e-cig as a room light.
      They have delicious food as well!

  1. The cheap LED products from China are made from rejected materials that simply don’t last the 100,000 hours or whatever LED should these days. They also put them in serial strings so that when one fails the entire string stops working, so that divides the already shorter life by a factor of 10 or 100. They are selling you well marketed garbage, it may be very cheap and usually works at first, but it is still mostly garbage that would otherwise get destroyed. Sorry Mr China you may be very “efficient” but your ethics are just not up to Western standards, not that everyone in the West is either, but you know what I mean.

    1. On the other hand, what would happen to all these not-quite-perfect rejected parts like those LEDs? For some uses it may be perfectly fine to have LEDs that only lasts 10% of those 100K hours. Cupboard lighting, for example, would benefit from the low cost and 10K hours is still more than enough. It would probably last as long as the kitchen cabinets.

      1. You assume the failure modes are all harmless and don’t involve burning down houses and killing people etc. Plus the problem is still that you don’t know what you are getting, until it fails, so unless they badge them as “Hoo Flung Dungs Shity 100 hour LEDs” you are being treated in an unethical manner.

    2. All this “them” and “us” disdain makes me sick. Are some commenters too narrow minded to think that many Chinese are reading and sometimes contributing to this blog too ? Hello, this is Internet, people from all over the world can read this blog (and mistreat the english language in the comments, sorry) which is US-based but not Western-centric, for Christ’s and Buddah’s sake !

      Now about “their” garbage : did the whole so-called First-World moved a long time ago most of its manufacturing (and polluting) activities to Asia especially to make build all “our” stuff by cheap labor at the minimum price and quality in order to maximize profits, because Chinese forced them to ??

      And please, at least click on the damn link : It is clearly stated right from the beginning that those 70 US cents were in fact 50 rupees of a DISCOUNT SALE IN INDIA, about what is paid for two hours of crafting “your” shits there !

      1. Hi Dan,
        Agree to with you on the first half of the comment. I don’t think anyone has the right to take a morale high ground here or point fingers.

        I did mention that it was a discounted sale in the post. Its actual retail price was still only INR 69(INR 19 or $0.3 more)

      2. A lot of Chinese products are either garbage or toxic in the case of their food exports. In some cases they;’ve shipped poisoned pet food that killed tens of thousands of pets here in the U.S. Or sent us tainted medicine because that killed several hundred Americans because it saved them a few bucks. Or selling us toxic toothpaste and toys.

        Yes they are unethical, they also treat their workers like garbage and cut corners in their products to the point they are hazards.

        And U.S. the American executives who moved their companies to China are just as evil. They knew full well that they were exploiting foreign workers and even driving them to deaths in order to make more money.

        This is what globalization has given us.

      3. I agree with you.

        People (not just Westerners) will do anything for a buck, it seems.

        Hence Marx said that capitalists will sell the workers rope for capitalist’s own hanging. True then, true now.

    3. Proper Christmas lights then.

      There are two failure modes for Christmas lights, work the first year you buy them or so tangled next year that they go in the bin. 100,000 / 10 / 10 = 1 Christmas.

    4. “””The cheap LED products from China are made from rejected materials that simply don’t last the 100,000 hours or whatever LED should these days.”””

      And then someone imports containers full of that stuff, puts that in an own case and you’ll never know that you just got expensive trash.

      Then I really prefer to knowingly buy trash in CN directly!

      1. 70 cents retail on low margin items means probably 1/10th margin, leaving 63 cents. Half of that is shipping and middle men, leaving 31.5 cents for the manufacturer. If we assume 1/10th margin again that leaves roughly 28 cents for parts, labour and shipping. If we take half for the LED’s (that’s 0.5 cents per LED, which seems achievable) that leaves 14 cents for the board and labour. Someone hand-soldering boards like this is probably making about 3 USD/h. If he/she does 120 boards an hour (one every 30 seconds, a speed that they no doubt are pushed to achieve at the very least), thats 2,5 cents in labour, so now there’s 9 cents for components. 2 or 3 of that goes to the PCB, if we can call it that. One cent for tools and consumables. So theres about 5 cents for those components on the board.

        And one wonders why they are frequently recalled for being a fire risk…

        1. Good Analysis!

          When I double checked on the number of Soldering joints. There are
          28 joints/pads for soldering parts and wires on to the PCB.
          3 joints per LED x 28 = 84 joints (Each LED contains a resistor)
          In total, 84 + 28 = 112 Solder joints
          All of these are done by hand soldering.
          Not to mention the heat shrinking of all 28 LEDs.

          There is quite a bit of manual labour involved.

  2. I purchased a few strings of these sorts of lights from Amazon.com a few years ago just for the LEDs so I could use them in some of my crappy projects. I think I paid about $3 USD each for strings of 100 LEDs, which at that time was cheaper than any other source I could find for white LEDs. I knew they were crap before I bought them, but I was surprised at just how amazingly terrible they were once they arrived. They were a serious fire hazard, which I dutifully reported to Amazon. Then I chopped them to pieces, put the LEDs into my parts bins, and didn’t give them another thought.
    Several months later I received an email from Amazon stating that the lights I bought had been determined to be a fire hazard and that they should not be used. They gave me a full refund, so I ended up with a bunch of crappy but usable white LEDs for nothing.
    I’m okay with that.
    I’m not okay with the crappy quality, but I knew about it when I bought the stuff so I guess I shouldn’t complain too much.

  3. But don’t forget that China is not a homogeneous monolith. There is cheap total crap like this — and there is cheap amazing stuff — like the ESP8266 and more and more really good stuff all the time. My hat is off to the poor hard working people who bust their butts over there. Tragic when that work ethic gets converted into stuff like this.

  4. It is mostly about the exchange rate.

    As for the labor, she was probably getting a decent wage to solder it for you, and it only took her a few seconds. Think about how fast you solder, and understand that she’s more of an expert because she solders all day. She’s very fast.

    And the BOM is very small.

  5. Mains voltage straight in one side of the board and then straight out the other side with wire rated for 25 Volts.

    This thing is a death trap, especially in countries that have 220 Volt or 240 Volt mains.

    1. Exaclty, cheap Chinese electronics + mains voltage = big no no! Chargers, adapters and other stuff that can present fire or shock hazard are items that have to be properly designed with decent components and because of that cheap ones are almost always dangerous.

  6. Why is it, that all these “I hate Chinese products” readers KEEP buying and testing and buying and whinging and buying and more buying and …

    STOP if you don’t like it.

    Keep on buying and admit they are cheap_&_nasty but also admit THEY ARE THERE for everyone to have them.
    How hard could it be?

    1. I agree….
      Stop buying lenovo! They’re Chinese.
      Dell, HP, etc…
      Or ask for the Compal Electronics, Inc. manufactured/designed boards (Though they may still use China for the PCB stage).
      Heck… LG TV… on the back: made in china…

      Heck, just go empty-house or check if the bricks were made in the UK or china… Knock down the house if it were China-mart supplied bricks.

      There are good stuff from China and there are bad stuff from China…
      Heck, Cowboy electrician vs Qualified Electrician… Source: The country you are living in!

      Doesn’t matter what country something is from, A scam is a scam.

      1. Yup, the problem’s really just buying stuff from unknown companies with no reputation. Ebay in particular is a huge example of that problem (and Amazon, and others who offer products direct from China). Companies who have brand names and reputations won’t sell you shit, because it’d destroy their business. Companies in some guy’s garage in Shenzhen, or running for a month in an abandoned factory because somebody found a million reject LEDs in a skip, don’t trade on reputation, just on price. Half of the time you could barely pronounce their name, never mind know their history.

        1. I can assure you that selling on the brand name is exactly what large fortune 50 companies are doing and that it is slowly but surely destroying parts of their larger business. But smoke, mirrors and some sort of brand loyality you feel for them is why they are getting away with it.
          When you are OEMing and literally selling the same rebranded electronics in the same market space for more money, it’s misguided brand loyality which is keeping them afloat and selling. No superior product or support, which is all having to be done behind closed doors through the orignal OEM.

          Fear of the foreign brand is why they are still selling.
          All that work is being exported to china and other countries as the cost of US jobs to squeeze margin.
          All profits are being kept in the US or offshore to avoid tax.

          Chinese companies know this. They are happy to build upon those brands. All this OEMing is supposed to be secret but in most segments the main players know exactly who is buying from who. Ask any chinese company which western brands OEM from them. You as a potential customer of theirs will happily be told, if they do not already blatently advertise it. Forget any clauses in OEM contracts. Its’ mere ink on paper and they know it cannot be atributed back to them.

          Chinese comapnies know that they can build off the backs of those fortune 50’s and become an established brand in the US market because of whom they have been supplying to already. People like these “western products”.
          So they start to take market share in their own right because they are cheaper and hey it’s the same kit anyway. Slowly they take over distribution channels offering massive margins. Then go direct to installers and cut out distribution. Then go direct to end users with simple to install products and cut out installers. Maximising their own profit at each step.

          Then the china brand turns off the taps for OEM and the western brand who decimated their own R&D and ability to make product is screwed and exits the market.
          Wake up. It’s happening. It’s the chinese long plan in any market segment. Can you blame them?
          The US company plan is share holders and profit for the next quarter.
          The chinese company thinks about the next decade.

          They are beating/teaching the west at capitalism too.

      2. I agree, except on balance there’s a lot of crap.

        And the worst part is that the cost of distinguishing the two falls on the western taxpayers or consumers themselves –
        take a look at the EU consumer alerts website linked alsewhere in the comments.
        That represents a huge amount of work, testing all this crap from China.

        And you have to wonder how many lines simply slip through the net, and therefore skews the incentives for Chinese manufacturers towards the “lets try and get away with it, a few lines will get banned, but a lot will get through” rather than actually upping their standards as EU manufacturers must.
        I am in favor for “quality” tariffs to be imposed by default, and then removed once the importer demonstrates quality compliance.

  7. My father in law bought a couple of these sets in the U.K., Happy Christmas times… until one exploded and caught fire. The controller board was almost identical to this. But it wasn’t a 70c cheap store set. It was bought from a well known high street store. Garbage in a different box… the second set, again identical, is still working fine after a couple of years. I’ve bought quite a few cheap goodies from AliExpress and found the quality to generally be very good. Notably… nothing mains powered…

  8. It’s always interesting to see teardowns, but I don’t think this can be called “value” engineering.
    At best it’s “skimping” and “corner cutting”, at worst, “dangerous fraud”. Besides, none of techniques of value engineering are being discussed, just that it’s “minimal”

    I’d like to see a post with detailing tricks and techniques in action, eg https://wp.josh.com/2015/09/06/inductive-power-on-the-cheap-philips-imageo-teatlight-teardown/

  9. I talked to a guy in china years ago working for the cheap lights industry: There is no µC in it. Its a in silicon hard wired state machine for the control. Veeery cheap. The price may be low because the reseller wants get rid of the junk. So sold below price.

  10. Personally, I don’t think the Asian manufacturers are to blame for much of bad products, they just do the work they are paid to do, as specified, and with the materials provided, and appreciate the business. A lot of the US-based companies send their production jobs overseas, because there are all the product safety checks, inspections, or much else standing in the way of profits. No union wages, no mandated benefits, no responsibility, no liability, just the cost of importing anything they can dream up. They don’t care about quality, since they can just point the consumer to the manufacturer for warranty, replacement, or refunds. The asian companies don’t take responsibility, because they didn’t design the crap, nor agree to take responsibility for it, correct the design or anything else, beyond just making the stuff, as instructed. The vast majority of consumers buy the junk (As seen on TV), if it sort of works, for a little while, great, if not it gets tossed, don’t expect, or care to waste the time complaining, it was cheap.

    Ever country on the planet has scammers, those who deliberately intend to sell a bad product, and then change their name and game quickly, when it gets too hot, or money flow gets too slow. There are likely a lot of people in China, who get a hold of those unsold products, and rather than bury them in a landfill, find some way to produce something useful, least send the trash, to some other countries landfill. I’ve snagged a few electronics out of dumpsters over the years, spotted while walking the dog, fixed for personal use, sold, or gifted. I’ve gotten quite a few computers, set out for the trashman, some worked just fine, maybe just a little old. Most, just the power supply needs replaced. Point is, somebody picks up cast off products, cheap or free, not knowing what’s wrong, finds a way to make use of basically free stuff. Where do all those recalled products go anyway? Get destroyed, burned, buried deep, rebranded and resold?

    There are a lot of quality, and innovative products coming out of China, It’s not all junk, or a scam, they are very capable of doing some amazing work. You get what you pay for, and if a customer pays them to produce crap, they’ll make it, just as crappy as specified, and at the lowest possible cost, not their problem afterwards.

  11. I can understand cheap labor and even free rejected parts but there must be some loss in supply chain of these lights. Maybe someone bought it and didn’t received some quality certificate and is selling it below the price. Maybe it was stolen and reselled. Or it was made only to transfer few kilos of cocaine in the same container and selling it below cost is fast money loundering?

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