SIPLACE Grand Opening
2012
The future of electronics manufacturing in the Americas
Forecasting the impossible
A quick glance at the electronics manufacturing market in the Americas shows a
somewhat mixed picture. Developments in North America hardly seem to
correspond with the situation in Middle and South America. Looking at the
industry all over the world, rapid swings and movements control the sometimes
stable and sometimes shaky field of electronics. Forecasts are difficult to make:
will the future be bright with a chance of rain or will it be the other way around?
It seems contradictory that the electronics manufacturing market appears to be in a
constant struggle, when at the same time all over the world people depend more and
more on the latest electronics devices, in every single element of daily life. But it is
exactly this awareness, that the electronics manufacturing market is one definitive
market of the future, which causes difficult and different situations all over the Americas
and the world.
Governmental support is vital
In a time of complete economic uncertainty, what every country looks for the most is to
protect its own companies and markets. “We have a trade war going on and it will
become more and more cut-throat”, Ken Disbrow, Consultant and Founder of Public
Knowledge LLC, explains: taxes on import, an increased support of export and big
companies everywhere searching for the one place where they can save yet another
dollar. The emerging country Brazil for example takes great care in having consumer
products such as TVs produced by Brazilian companies. At the same time companies in
the US complain about a lack of governmental support. While the government offers
indirect help by pushing infrastructure, its efforts in promoting R&D and fueling
educational programs have been lacking so far, says Dr S. Manian Ramkumar,
Professor and Director of the Center for Electronics Manufacturing and Assembly at the
Rochester Institute for Technology (RIT). “Government is more interested in pushing the
fancy stuff, such as chip fabrication. They don't promote chip packaging and electronics
assembly nearly enough, even though lately they have started shifting focus a little.”
Varying regulations from state to state make operating from within the US even more
difficult and so far, there is hardly any change in sight. Money to launch a well
coordinated lobby and make the manufacturers’ struggles known is, sadly, still missing.
Challenges in education
Yet another problem within the US is the lack of skilled workers. Low public interest in
electronics manufacturing does not bring in nearly enough university or college
graduates to fill the empty positions at US-American companies. And while in Mexico
and South America studying manufacturing is much more highly regarded and attractive,
their schedules are not up-to-date and even conservative in most cases. “We are
working towards creating more and more exchange programs,” Dr Ramkumar describes
how the RIT tackles this unbalance. However once the students are trained and ready to
start, it is hard to keep them in the US, despite them being able to choose from up to
three or four job offers, due to visa and employment restrictions. Turnover of labor is
soaring high: as soon as hardly skilled workers have undergone the necessary trainings,
it seems they leave again.
Fresh ideas and new angles
However, it is not all either or, rain or sunshine: there appears to be more and more
unexpected success stories which are born out of what at first looked like obvious
downturns. For small contract manufacturers with big customers in medicine or defense,
the future even seems bright. Electronics manufacturing is a worldwide business and the
industry is making about 66 billion dollars a year. Only 3 billions of them are made in the
US. So what does that mean? It is about keeping what the country already has. This
requires, most of all, innovative thinking. Instead of offering just what a company has
always offered to the customer, what is interesting to them now is added value: high
quality, good service, presenting the whole package and collaborating. A few years ago,
large OEM companies were focusing on slimming down and outsourcing. This lead to
them losing touch with their contract manufacturers and their research – in the end it
became a disadvantage. Today they are hiring again and communication is also
improving.
Another unexpected turn for the Americas market comes with rising costs of labor and
living standards in Asia. Companies in the US, Canada, Mexico and Brazil who had
moved their facilities to China are now realizing that the total cost of operations due to all
the taxes, travel costs etc. has long risen to a level where on-shoring might be the new
and brighter future. And the high mix low volume production that has become a specialty
of the market is hard to transfer in any way. Then there is yet another factor of the future:
sustainability is becoming more and more important. Keeping productions close to the
customer is not only starting to become a cheaper option and a way to offer customers a
hands-on feeling and better service, it is also much more eco-friendly. For North America
this means that there is sun breaking through the clouds. For Middle and South America,
business is getting brighter every day.
For more information about ASMPT, please visit www.asmpacific.com
Please direct any reader inquiries to:
ASM Assembly Systems GmbH& Co. KG
Susanne Oswald
E-mail: susanne.oswald@asmpt.com
Mark Ogden
E-Mail: ogden.mark@asmpt.com