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A Glimpse at the Domestic US Board Business
By Mark L. Casey | December 21, 2007
Back in the late 1990s I worked for a division of Flextronics in Austin, TX. Our office was located next door to the Multek Austin PCB fabrication facility. Multek, which was itself a division of Flex, had purchased the Austin board house from IBM, which was in the midst of an aggressive divestiture program. The Multek Austin facility was well over a half million square feet (700K as I recall) and was producing, among other things, IBM Thinkpad notebook mother boards. The factory was large and very impressive, but there were board houses in San Jose that were even larger than Multek. The point is that the domestic board business appeared pretty healthy at that time. However, this was just before the dotcom bubble burst. I certainly didn’t envision the changes in store for the board business.
Today my former office next to the Multek Austin factory is in The Domain, an upscale shopping development. The old board house itself is being demolished to make room for more shops. Somehow this turn of events is apropos given what has happened to the US board industry as a whole. There are still bare circuit boards being fabricated in the US, but the scale has changed dramatically.
The reason for these changes is obvious. Offshore board houses are able to charge significantly less than domestic houses due to labor savings and other cost advantages. OEMs and contract manufacturers began shifting their business offshore heavily, causing a virtual collapse of the domestic board business as we knew it prior to the 2000s. With these changes we saw the usual merger and acquisition consolidations as firms tried to remain competitive. Many of them still did not survive.
So where are we today? There are still domestic board houses producing circuit boards for their customers, but their strategic role has changed quite a bit. I represent South Bay Circuits in Chandler, AZ so am quite familiar with their offering. Domestic firms like South Bay excel at quick-turn boards and fairly high technology boards. They also do a good job with production level boards for many applications. They offer excellent customer service, and, not to be discounted, they speak English as their primary language. When the volumes grow to a certain point, however, cost pressures are applied by the customer that make it necessary for the domestic houses to partner with an overseas firm to offer bare boards to their customers for a reduced price. Of course, the end customer can also go directly offshore, so the value-add of the domestic board house has to be customer service and quality assurance.
Many US board houses have added services to enhance their value to their customers. These services may include board assembly, backplane assembly, and even sub-assembly or system assembly. Those that have gone this route have become hybrids of fab and assembly. They still have fab-only customers, but also have some customers that look to them for much more.
Domestic board shops that are thriving have found their niche. Some focus on military and aerospace business that is required to be domestic. Others have made the investment to offer leading edge technology with regard to tight lines and spaces. Some have decided to focus only on prototype boards. These firms offer small production panel sizes to make it cheaper when customers need only a few or very small boards. They can even “share” panels by putting more than one customer on a production panel when space allows. All of these niches exist because it is difficult or impossible for offshore houses to compete in these specific spaces.
Don’t get me wrong, many domestic board houses still want to do volume manufacturing and are ready when the right opportunity presents itself, but they also know that they can no longer earn their living that way. The niche is their avenue to prosperity.
How do you find good board houses? In addition to simple web searches, many board houses can be found and researched via Globalspec and many other sourcing directories.
Topics: PCB Fabrication, Services | 2 Comments »
2 Responses to “A Glimpse at the Domestic US Board Business”
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February 12th, 2009 at 1:08 pm
[...] circuit board factories where bare boards were produced. My office for a time was basically in the IBM Austin board house which was purchased by Multek. I have also been in many circuit board assembly factories both in [...]
February 12th, 2009 at 1:09 pm
[...] circuit board factories where bare boards were produced. My office for a time was basically in the IBM Austin board house which was purchased by Multek. I have also been in many circuit board assembly factories both in [...]