As governments realize the importance of investing in domestic manufacturing, opportunities are coming for EMS firms and PCB fabricators.

It takes time to gain perspective, especially perspective on the industry you are immersed in. In my case, it’s been 30 years since I entered the printed circuit board market. During the first six or seven years, it was heady, upbeat times in North America. Growth was a bounty supporting hundreds of domestic fabricators. Materials, supplies and capital equipment were made “locally” in North America. Then, around the new millennium, everything changed.

Suddenly, work headed to Asia, and fabricators contracted at an unprecedented scale to fewer than 200 within a few short years. The collateral damage was a collapse of materials, supplies and capital equipment companies that supported the industry. Even worse was the exodus of skilled talent who sought careers in more promising industries and never looked back. The relatively few companies that survived did so by hunkering down, focusing on a niche, and investing in only the equipment they needed to support their business base, in some cases taking draconian steps that worked short term but eventually led to their demise. Over the first decade-plus of the new millennium, it was depressing to be a North American circuit board fabricator.

However, times change, and with that change, opportunities emerge – finally!

After decades of ignoring reality – and for a variety of reasons and events, many of which have nothing to do with printed circuit boards, or even electronics – government and industry leaders are “shocked” to learn so much of North America’s manufacturers are no longer globally competitive and how much more capability and capacity is required for economic and military security. Now that they understand the need to invest in manufacturing, more specifically in electronics manufacturing – everything from chips to bare circuit boards and substrates – opportunities for the North American PCB industry finally may be knocking.

Do we open the door and take full advantage, or ignore it and squander our chance?

To take advantage of the current momentum to expand and enhance North American capabilities and manufacturing capacity may require a radical rethinking, or at least retraining, in how we as an industry operate. The entire risk/reward equation in particular needs to be revisited. After nearly 20 years of operating in a hunkered-down mode to mitigate risk and maximize reward, many in our industry may need to be retrained to break old habits and embrace a paradigm shift the opportunities of the future offer.

The first step toward taking advantage of new opportunities may be a brutally honest self-evaluation of what your company does, for whom, and with what resources. Most important is understanding what government or “C-suite” investment in electronics technology may look like and how that will impact your customers. As an example, if chip plants are built in North America, what other electronics manufacturing may now become more cost-effective if done closer to those plants vs. overseas. And, what printed circuit board technology will that increased demand for capacity impact?

With investment in more advanced technology, will new materials and the processing knowhow and equipment be outside current capabilities or comfort zones? Discussions with material suppliers should include a dialogue on what to be aware of; begin experimenting to be better prepared.

If the gap in North American electronics capability points to a specific type of printed circuit board technology that will be in especially high demand, that may be the place to consider increasing capital investment to either add capacity, enhance capability or broaden product offerings to include the growth opportunity. This review should include an estimated capital equipment budget and supporting cash flow, as well as a reality check with current customers to understand if their products and purchasing demands may also be impacted and shifting.

When demand increases, what type of employees will your company need to hire? This leads to workforce development opportunities that currently exist, and in the next few years will expand with an increase in qualified people seeking jobs in electronics. More important, with the emphasis on investing in new capabilities, what talent gap might you have that would prevent being able to produce a new technology? Getting involved now may be the best way to ensure having qualified talent when needed.

To take advantage of any opportunity that a reinterest in North American electronics manufacturing may present, it is essential to stay informed and get your team ready. Nothing will happen overnight, but it will happen more quickly than anyone who has become comfortable in the current industry paradigm imagines. We all need to be aware significant new opportunities are finally on the horizon.

After so long operating in a contracting industry segment, we in North America cannot afford to let the coming opportunities be squandered. Opportunity for growth is knocking for us all. 

PETER BIGELOW is president and CEO of IMI Inc.; pbigelow@imipcb.com. His column appears monthly.

To best help customers, suppliers must invest in dedicated software experts.

“Value add” is a term bandied about, especially when a business is in the process of selling its products or services to another one. Likewise, in manufacturing the term “capital investment” describes the process of a business selling its products to another. All too often, much less “value” is derived by the “investment.”

Over the years – decades, in fact – most of the equipment and services I’ve purchased have been of dubious value and less an investment than a needed cost. A significant portion of any capital budget is spent either replacing legacy equipment or on substantial repairs to keep old equipment functioning. While there are times a new technology is truly a game-breaking investment and provides real value for the future, the majority of capital spent is for the same-old, same-old.

Historically, capital equipment used in the fabrication of printed circuit boards has relied heavily on electromechanical/PLC controls to operate. Mechanics in most companies’ maintenance departments can troubleshoot and service or fix this technology reasonably well. Many a scrubber, etcher or drill that may be decades old can be found still chugging along in most established fabrication facilities. Technology and events, however, are impacting the same-old and offering an opportunity for some that, to date, have not been embraced.

Working unconventional hours in remote locations disrupts business more than material shortages.

As we enter the third year of our pandemic-altered world, more chains are strained than just supplies. With people working remotely during odd hours, changing careers, or stepping out of the workforce altogether to care for loved ones, the basic chain becoming strained is communication.

Communication has been transitioning over the past couple decades. Time, culture and technology have dramatically transformed. Long gone are the storied two-martini business lunches where colleagues, customers and suppliers met, broke bread and discussed one-on-one issues that needed ironing out. Over the past decades, face time (not FaceTime) with any business client has become extremely difficult to arrange. Today with Covid, meeting face to face is all but impossible for many. Long-changing trends compounded by recent events have had a negative impact on the ability to communicate effectively, which in turn has strained the quality of relationships in too many cases.

For years, a typical customer service or salesperson would spend so much time on the phone with clients, they were jokingly referred to as having “cauliflower ear.” The ongoing constant chatter between people – most business, but some social – helped build strong relationships. How times have changed. The phone-savvy businessperson and bonding over long lunches are no more. Over the past two decades, email has become the communication vehicle of choice. And the pandemic scattered employees, customers, suppliers – everyone – to remote offices, usually in their homes, hopefully with a quiet room from which to log on to Zoom, GoToMeeting and WebEx.

A counterargument to cutting staff and inventory.

One of those rituals that takes place around this time is developing the business plan and related budgets for the new year. Deciphering the crystal ball, discerning optimism from reality in the sales forecast, determining budget capital investments and human resource needs, and so on, is always a complex task. The very unusual pandemic/post-pandemic world we are now in makes it even more so.

As we look to 2022, we see some unusual and especially onerous hurdles: a more strained supply chain, deteriorating consumer sentiment, increasing inflation, and segments of the economy still reeling from the worst days of the pandemic. While no single hurdle can be compensated for, the combination of threats can tempt the planner to take a conservative approach and decide it’s time to hunker down.

But what does a conservative approach to planning and budgeting really mean? Typically, plans might include reducing inventory, cutting back capital spending and trimming staff (or hours worked by staff) to “right size” expenditures with the projected (feared?) lower levels of business. All are prudent steps that in normal times should be considered when an industry or the economy shows symptoms of fatigue. The problem is these are not normal times!

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