What’s Old is New
Supply Chain Pressures in 2022
How prepared is your organization?
Here we are in January 2022 with a future fraught with more uncertainties than any other during my six decades in the PCB, IC fabrication and assembly industries.

Business is strong despite shortages in labor and parts. Prices are rising, dramatically in some cases. Profits are being squeezed. Rapid government changes in travel restrictions and worker conditions seem endless due to the continuing evolution of the pandemic.

Supply chains are under pressure from a variety of events and circumstances. These include some brief power shutdowns at plants that produce wafers and PCBs in China, chip and other component shortages, shipping issues with a backlog of over 100 cargo ships carrying, for example, container loads of copper-clad laminates anchored off the Southern California coast waiting to be unloaded. The battery industry is gobbling up copper supplies. Major consumers are buying into chipmakers who can guarantee their needs. This affects those who cannot, causing them to scramble for new sources.

Not only are ICs in short supply, especially for automotive needs with the increase in the manufacture of EVs and hybrids, but substrates are needed for their mounting and connection to the outside world. As a result, major automotive companies in Japan, the US, and Europe have curtailed production in several factories to the tune of several million vehicles in the coming year.

We have seen some companies redesign the printed circuits to accommodate available chips when the delivery of the ones originally ordered became uncertain.

Because not every application needs the latest and greatest chips with <10 or 12nm nodes, a scramble is on to expand production of chips with less stringent specifications, including larger feature sizes. This has created a demand for and a shortage of refurbished “older” equipment.

A new focus is on semi-additive and additive circuit manufacturing. New technologies in these fields are gaining attention and some traction in the US, while others across the Atlantic are in the advanced development and field test stage. These will require new standards and design skills. There are also major advances in the use of AI and XR for equipment design and system use, as well as support services.

Another emerging technology on the horizon reduces energy consumption by 80% or more in some electronics assembly (and other) applications with the use of photonics to replace IR or laser heating of parts for soldering, disc separation, and resin curing (e.g., protective coatings or solder masks), while providing reduced factory footprints. This technology will be demonstrated live at IPC Apex Expo 2022.

The aforementioned creates the need for not only locating and training new workers, but also upskilling existing employees. Private companies and trade associations around the world alike are putting a major effort into this. Some are focusing on individuals, like PCEA and SMTA, others such as the MittelStands Campus are focused on midsize companies. These groups are becoming more affiliated with each other.

All this brings to mind these questions:

  • Did you check the security of your supply chain when you made your business forecasts for the year?
  • How prepared are you for rapid changes?
  • What contingency plans have you made?
  • What relationships do you need to build or solidify? With customers, suppliers and/or employees?
  • What new cooperative activities do you plan to initiate?
  • Are there competitors with whom you can cooperate?
  • How strong is your relationship with all your suppliers?
  • Do you have alternate sources for key needs?
  • Can any of your customers provide the parts you need to assemble their boards or make their electronic packages?
  • Can you reach out to the OEM that will be the final customer for support in meeting their present and future needs?
  • What are you doing to upskill your employees?
  • Is there a need or opportunity for shared resources?
  • How will you evaluate new products/processes?
  • How can you offset shrinking margins?
  • Is there a possibility of cooperative buying to strengthen your purchasing power?

More questions will arise as new challenges and opportunities occur.

Meanwhile, as we look around the world, we learn Meiko Electronics will build a new major PCB production and R&D facility in the newly completed Yamaguchi Industrial Park in Northern Japan.

Japan appears to be aggressively active in reshoring and solving some of its supply chain woes by subsidizing half of TSMC’s $8.8 billion planned fab there. Ford is one of the recent automotive companies to take direct action to secure its future IC supply chain. It has a new agreement with Global Foundries. Did you know today’s cars now use up to 1,000 or more chips?

The PRC (China) will start the construction of eight new chip fabs in 2022. Don’t expect this to be any help to those in the Americas. It’s interesting to note, even though TSMC has a major effort in Arizona, its chairman Morris Chang said, “It would not be a possible task to rebuild semiconductor supply chains in the US due to high costs.” Is that a challenge? Or even true?

Some new help is on the way, especially for individuals and smaller companies with limited budgets. Effective this month, the Printed Circuit Engineering Association (PCEA) is acquiring staff and assets of an organization with over 2.5 million annual engagements with printed circuit engineers, designers, fabricators and assemblers around the world. The acquisition includes two industry-specific trade shows (PCB West and PCB East), the PCB2Day workshops, Printed Circuit University, the dedicated online training platform, and more. Current PCEA affiliations are said to include the EIPC (European Institute of Printed Circuits), the SMCBA (Surface Mount & Circuit Board Association), the FED (professional association for design, circuit board and electronics production), ECEDHA (Electrical & Computer Engineering Department Heads Association) and the SMTA (Surface Mount Technology Association).

Headshot of Gene Weiner
Gene Weiner
is a business and technical consultant dba Weiner International Associates, serving the specialty chemical and electronics industries. His clients have included several Fortune 100 companies. His executive experience includes president of New England Laminates; vice president of sales and marketing of Dynachem, and director at Wong’s Kong King International; gene@weiner-intl.com.