Peter BigelowAll but written off, North American fabs might be on the cusp of a new growth era.

For as long as I have been in our industry, which at this point is decades, the one constant refrain has been that certain technologies, company sizes or geographic locations mean eventual extinction. The technologies in question, just like the company size or geography, have continually changed over the decades. The constant, however, is that much of our industry is, well, just plain doomed!

Currently, the popular thinking is North American fabricators are on the endangered species list. The reasons are numerous. Many survivors are too small to meet capacity demands of global customers, are in a high-cost part of the world and thus noncompetitive with pricing, and lack the technology of newer, more advanced facilities. The general picture painted is North American fabricators are a bunch of bucket shops that can produce only high-mix/low-volume, single- and double-sided product. Commence the funeral march.

The data steer some to such a depressing conclusion. The North American PCB industry is made of far fewer companies today than a decade ago, or even the decade before that. And many are smaller than their global counterparts. Where the industry stands related to technical capability is less clear. If the benchmark is having enough technology and capacity and a low-cost basis to profitably supply Apple or Samsung, then that assumption is most likely true. If end-customers have more reasonable capacity requirements, however, my bet is there is more technical capability than North America is given credit for.  

Sometimes data can be flat. Technology can be harnessed and transformed from a perceived Achilles heel to the catalyst that catapults the marginalized to a position of strength.

A couple of interesting trends may be working – or be made to work – in the best interest of those left-for-dead North American fabricators. First is the relative age of most of the in-service capital equipment – in North America and globally. Second is the ongoing paradigm shift in fabrication technology. And third is that, while a few customers exclusively need high volume, most place greater value on flexibility because they are not in consumer-driven mass markets of Apple.

If nothing else, entrepreneurial North American fabricators know how to get the most out of their capital equipment. Most facilities are at the point that replacing equipment is necessary, if not critical. Pushing the plotter, drill machine or etcher much further is well past being a viable option. Therefore, for many North American facilities the retooling has begun, and will be continuing as older equipment retires and good, late model used equipment becomes increasingly difficult to locate. In short, money needs to be spent, which is good for the industry, as well as for the individual company making the expenditure. It also provides a unique opportunity – one that our Asian friends had a decade or so back.

At the same time, fabrication technology is going through some big changes. These changes are the result of new technologies being developed, refined and becoming cost-competitive. The biggest game-changer is the evolution of tooling. Our industry was established on the premise that hard tooling was the only cost-effective way to register product – through image, lamination, drill, plating and route. With the evolution of software, and the introduction of cost-effective cameras, the tooling paradigm has changed.  

Camera-driven tooling enables tighter, scalable, and less labor-intensive registration. CAM data can truly be used throughout the fabrication process for manufacturing and verification from image through electrical test. Couple this with direct imaging and laser or UV welding of books in lamination, and more advanced drill, route, and plating equipment, and the result is significantly tighter registration produced with higher yield and fewer man-hours touching the product. In short, the catalyst for lower-cost, higher technology capability.

As established companies replace their aging capital manufacturing infrastructure, this newer capability should – and will – be installed. I think more North American fabricators will offer world-class technology – and will do so at lower, globally competitive costs than most could have imagined even a few short years ago. The early entrepreneurs to rethink their process capability and reinvest in their facilities will be the first winners. Provided enough companies think it through and prudently invest, however, the entire North American industry could do an end-run on many of their Asian competitors.

It is rare the earth, moon and stars actually align, but in many ways that may be exactly what is happening in the North America fabrication industry today. The need to replace aging equipment, the emerging lower-cost and far less labor-intensive fabrication technologies and equipment now available, coupled with big investments in last-generation equipment, which makes it far more difficult for the buyers to quickly retool their facilities, may coalesce into a once-in-a-generation opportunity.

With any opportunity comes risk. The flat data have to be drilled into and fully understood. Any changes to process or retooling of a business are only as good as the weakest link (or last to be replaced) in the process. And yes, the competition all over the world will make similar investments. However, how often does a company, to say nothing of an industry, have the opportunity to totally rethink how they produce product, and harness new technology to improve technical capability and reduce processing costs? And, how often can naysayers be silenced by the rising phoenix? From my recollection, about once every 30 to 35 years.
I believe for this current generation, the time may well be now!

Peter Bigelow is president and CEO of IMI (imipcb.com); pbigelow@imipcb.com. His column appears monthly.

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