To bring down the total production cost of XBOX, Microsoft has moved its manufacturing faclities from hungary to taiwan.
Here is what a report on Times of India says-""REDMOND: Microsoft said on Monday that it entered an agreement with Wistron, the manufacturing arm of Taiwanese computer maker Acer, to make the Xbox video game system. Wistron is the second manufacturing partner for Xbox, joining Flextronics International, which helped launch Xbox.

to read the full report go here