Tariffs

Leveraging Supply Chain Command for Lower Material Prices

As trade battles between the US and China heated up, Ventec USA has had a front seat. by mike buetow

Ventec USA president Jack Pattie talked with PCD&F editor-in-chief Mike Buetow in August on how the laminate manufacturer is coping with US tariffs, capacity constraints, and his advice for designers of short-supply materials. Excerpts. (See pcdandf.com for the complete interview.)

Mike Buetow: How are the tariffs affecting Ventec at present?

Jack Pattie: We followed the US trade representative website [ustr.gov] very closely, so we knew that there was a good chance that it was coming, but in order to fulfill our commitment to serving our customers, we still had to import material from our main factory in China. In the interim we were working on a transition of our US orders to our Taiwan factory. Fortunately, since April 2019 we are a publicly traded company in Taiwan, and we have a fully capable factory in Taiwan, but it took some time for that transition.

So initially we imported many containers and paid the tariffs and the main reason we did that was our commitment to the North American market, in particular the US obviously, because the tariffs are just in the US. It did cost Ventec a lot of money to absorb the tariff costs and ensure continued material supply for our US customer base while we transitioned production to our Taiwan facility, but that’s all part of our long-term commitment to our customers.

MB: What’s the capacity situation look like for Ventec in Taiwan right now?

JP: It’s good. We have plenty of capacity to support the US market from our Taiwan facility. We’ve been running that facility since 2011, and in line with all our facilities, our customers are assured by the strict quality-controlled processes there that are certified to IATF 16949:2016 and ISO 9001:2015.

MB: With 5G and related technologies eating up much of the high-speed laminates market, what advice are you giving designers and buyers working on new products today?

JP: We are telling designers and OEMs not to be “locked into one type of material.” Many of the designs are hybrid buildups, meaning they are mixing one type of bond-ply with another type of core. Getting locked into a design will put them at a disadvantage if a material shortage or lead times become an issue because they have no alternative. We recommend they spec out a slash sheet number and material properties that would allow alternatives to be used.

MB: In terms of capacity, my understanding is finding the higher-speed laminates right now can be a challenge. Alun Morgan has written on this in our magazine that one of your advantages is that you have the whole chain inside of Ventec.

JP: It’s true. We are really the only laminate manufacturer that basically owns its own distribution channel in North America, the UK and Europe. That certainly is an advantage for us, especially where you’ll see prototyping in the West and production volume in the East. We are able to manage that full supply chain for the customer.

MB: Let me go back to the tariffs for a moment. Have you noticed any changes in customer buying patterns since they went into effect, or is it more of a matter of having to communicate and reassure customers that there will be material available and there will be some kind of cost containment if possible?

JP: We haven’t seen changes in buying patterns, but you must remember that the US is mostly prototypes, so a lot of our customers have had a very difficult task in forecasting. We try to look at their usage history and we can clearly see patterns, but a lot of customers don’t have the bandwidth and capability to forecast what they’re going to need in the future.