PCB market static but opportunities are there

electronics_contract_manufacturer1

Twenty years ago there were as many as 12 significant printed circuit board (PCB) manufacturers in Australia, says Andrew Pollock from the Surface Mount and Circuit Board Association (SMCBA). Today there is only one major manufacturer– Lintek, which operates out of Canberra. The cause of the demise of these factories began once stakeholders decided to go offshore to source component parts and services.

“The first phase started 15-20 years ago when the telecommunications industry started to shut down operations,” says Pollock. “Ericsson had the largest PCB manufacturing plant and highly automated assembly operation in Australia employing as many as 3000 workers. Then Siemens, Fujitsu, NEC an Alcatel closed their factory doors and Telstra wound up its product development divisions. Companies refocussed businesses offering turnkey solutions from design through to finished product and aftermarket support. Many boards were being sourced offshore particularly from China and components were also being sourced offshore.”

Pollock says although the industry will never go back to those heights there are still opportunities for small to medium businesses in the assembly, contract manufacturing, design and niche products and markets.

“About 100 companies throughout Australia offer contract manufacturing and many do small to medium product runs,” says Pollock. “Many OEMs supplement their business by offering contract services. The industry here is dominated by high-mix low-volume manufacturing with higher volume manufacturing going to offshore plants owned by the bigger local companies. PCB designers are working on revisions and new products but the majority of their current work is on designing new products which is a good sign.”

Then there are the peripheral areas with industry that some firms are exploring. “Some companies are positioning themselves to supply overseas markets,” says Pollock. “Who knows, GM or Ford could end up in the south-east Asian region and Australian component manufacturers could be well positioned to service that market.”

Finally, there is the issue of on-shoring, or repatriation, of jobs that has started to happen. Pollock cites one company, whose parent directed that they shift their manufacturing facility to the Philippines. However, the venture didn’t last long due to quality issues arising. Another company pulled the manufacturing of a new generation product back to Australia after also experiencing production difficulties offshore.

Volume PCB manufacturing may be a thing of the past, but there is still plenty of work and opportunities within the industry if companies look for them.