Have you thought about a prosperous future? Most of the companies I know have led “lives of desperation,” to quote my fellow New Englander Henry David Thoreau. Most of the time they are more concerned about making payroll than buying a new piece of equipment, more worried about pesky quality issues than sitting down to plan and strategize about the future.
Who can blame them? For over 50 years, since the 1980s, most of our domestic electronics companies have been like modern day Sisyphus, condemned to roll that boulder up a hill only to have it roll down time after time, working very hard but getting nowhere.
In this case, the hill was an even market playing field where domestic companies were held to different standards while the doors flew wide open for offshore companies that had no interest, or obligation, to play on that same end of the field.
While fledging Western companies (European and North American PCB and PCBA companies, in this case) had to manage and cope with new worthy and necessary regulations, offshore companies did not have to deal with those regulations. In what was probably a worst-case scenario, our customers—especially the larger ones who insisted that we meet all the laws, regulations, directives, specifications, and qualifications, all while keeping our prices down—merrily went off to Asia to enjoy the cost advantages that those unregulated companies could provide them.
Then, those companies came back here and asked the Western companies to keep up, which was the equivalent of our companies fighting the offshore competition with both hands tied behind their backs.
Kind of makes you a little mad in hindsight, doesn’t it?
Lest we forget, the Asians, especially the Chinese, did not come over here and “steal” our business. Not at all. Our large domestic customers ran over there and handed it to them, not only the huge purchase orders but the technology they needed to learn to build these products. This was our technology that we had developed in North America.
But you know that scene already and it’s a miserable visit down memory lane. So, let’s look ahead at our much brighter future. Here’s what I envision.
Our customers (even the entire country) have awakened to the dangers of being so dependent on foreign powers who are often no better than frenemies. If COVID wasn’t enough of a lesson, then the war in Ukraine has taught us that we need to be more independent.
Our customers no longer brag about buying from China. Even Apple, China’s largest U.S. customer, is not bragging about buying from China. In fact, Foxconn, their largest supplier, has announced it will put out its own phones. Gee, I wonder where they got that idea? I wonder what design they are going to use?
American companies are looking for American suppliers. They are not only looking for suppliers, but they are looking for American designers and engineers to design their products as well. They want to partner with their PCB and PCBA companies to ensure a stateside supply chain that will be safe and secure no matter what happens in the rest of the world. In many cases, these partnerships are leading to new product development. In some cases, our customers are willing to help fund new equipment to build the technologies they need both today and tomorrow.
Something I find interesting is that our customers actually care whether we make money. For the first time in the history of our domestic industry, our customers want us to make money, to be financially healthy, even to the point they are willing to pay a little more so their vendors are profiting too.
That playing field is getting flatter as more offshore countries pave their way to the middle class. Those countries are now imposing their own regulations and specifications. In many cases, human rights are starting to make their way into the culture of most of the world’s leading industrial countries. In most modern countries, companies are being held to the same regulations we have had to meet for 50 years now. The world is quickly running out of 1990s, which bodes well for everybody.
One more thing. It looks like President Biden will sign the CHIPS Act, allotting $300 billion to the semiconductor industry. Some of that money will trickle down to our level of the electronics industry. Can you imagine that? Our government is investing in its own electronics infrastructure. How very Chinese of us. Now that will go a long way toward leveling that playing field, won’t it?
It’s only common sense.
Dan Beaulieu is president of D.B. Management Group.