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.