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Looking at the SMT industry right now, I see some very interesting things going on with shifts in production locations, ease of manufacturing, and intellectual property (IP) protection. OEMs are bringing production back to the U.S. in greater numbers—some even back to Mexico. A significant driver of this over the past year has been the tariffs. For the majority of OEMs I speak with, it’s becoming clear how manufacturing in China is affecting their bottom line.
Most companies are genuinely surprised at how easy it is to bring manufacturing in-house—even financially. Some companies I’ve worked with have seen payback times of less than one year. With the rapid depreciation allowed through Section 179, payback can even be reduced to nine—or even six— months. Of course, after those months, manufacturers see a big increase in profits, and in most cases, a huge increase in quality. Better quality means fewer RMAs, less waste, and greater profit.
Most assembly equipment suppliers make the switch easy for manufacturers by looking at all production needs and considering board size, quantities per year (both now and forecasted), component types, etc. Then, they can formulate the equipment needed to handle both current and projected production. Some suppliers go further than that and diagnose your bill of materials (BOM) to determine which peripherals would be needed, from feeders to ancillary equipment, to make production integration as seamless as possible.
But it’s not just sourcing equipment that has become easier. As the years have passed, the production process itself has become more reliable and less complicated. Items like predictive profiling on reflow ovens eliminate the tedious guesswork that used to go along with profiling a board through the reflow oven for the first time. Solder pastes are more forgiving than they used to be. Even the “dreaded leadfree” is almost a term of the past with it being a more simple process now.
To read this entire column, which appeared in the October 2019 issue of SMT007 Magazine, click here.