Estimated reading time: 6 minutes

The Bleeding Edge: Why Do So Many Board Shops Fail?

By Robert Tarzwell with Ken Bahl - Sierra Proto Express

Why do so many board shops fail? This question has crossed our minds many times over the last 20 years in the industry. In the 80s, the industry lost hundreds of good, viable shops. In the 90s, it seemed if your board shop was not going out of business, you were the odd man out. During that time, literally thousands of shops closed throughout the U.S.--the number of shops has gone from approximately 2,800 to little over 300 in existence today. Yet, during that time of massive board shop closures, Canada stayed strong with 70 to 90 board shops and the numbers in our neighbor to the north went up, not down, during the carnage in the U.S. We often question why Canada stayed strong while so many PCB shops in the U.S. closed--and continue to close--at such a quick pace.

The simple, one-word answer is TECHNOLOGY.

We've visited so many company auctions and read about so many closures that we wonder when the trend will end and why the industry cannot stop such losses. The causes for these losses are varied--bad management practices; loss of key accounts to offshore, low-cost suppliers; or even outdated technology.

We once visited a facility to review their technology before an upcoming acquisition attempt and learned the company had very unique, but very old, RF technology. I had never even heard of the company, as their advertising budget was zero dollars. The shop was clean and well-equipped, but offered only single-sided capability--with limited double-sided capability--and no multilayer technology. The line and space was only 6 mils and the future for this company looked dismal--sales had been devastated, the company was out of money and the auctioneers were at the door.

Why would any company let the situation go that far without calling in advertising help or hiring a consultant to reduce line widths or hire a multilayer specialist? Once things move down this path, options quickly decrease as the money runs out. No revenue is left to allow the hiring of a consultant or to by much needed multilayer equipment.

We have been in some pretty filthy board shops and the reasons for their failures are obvious--lack of commitment and lack of care. If a facility cannot be kept as clean as a hospital room, how can that facility produce today's higher-technology circuits with acceptable yields?

Often, when consulting, some non-engineer management type will fight every suggestion made to help his company improve technology. The company has just paid big bucks to have us come in and improve the line width or increase the number of layers produced, yet every suggestion is met with sarcasm or a defeated attitude. At that point, all we can do is shake our heads in wonderment and move on to a company that truly wants recommendations for improvement. The situation can be compared to coming across a dying man and trying to save his life with CPR only to have him tell you, with his last breath, that he knows CPR won't help him.

Accepting new ideas is one of the greatest hurdles facing board shops today. As men who like to think way outside the box, we are forced to deal with, as we call them, "no" people. Why is it so hard for a board shop to accept change? Because not much in the industry has changed; the names on the machines, and their prices, may have changed and are now computer-operated, but, honestly, how much evolution has occurred within the processes and equipment in the past 40 years? Developers, etchers and plating lines have witnessed minor changes, but are still basically the same. At the same time, silicon manufacturers have invested in the PhD, people with master's degrees have reduced line widths so dramatically that the industry cannot keep up with PCB technology. In fact, most board shops are outdated old dinosaurs just waiting for the next cataclysmic meteorite to hit. The U.S. cannot compete with China or any other low-wage, non-pollution policy-complying country, so why try?

The only way a shop in the U.S. can make money and stay alive is with technology and the ability to sell at higher prices per square inch with less competition. Let's face it--shops in the U.S. cannot even buy the laminate for the price at which China sells finished boards. For example, if a six-layer board, 10" square, is $4 in China and your best price is $10, you will not survive in that market no matter how many times to say to yourself, "Just a few more sales and we'll break even." A 40-layer high technology board may fetch $10,000 in prototype quantities, but it will not matter if the facility lacks the technology and the internal training to build such a board. High technology is not just 40-layer boards. We've seen successful, profitable small shops selling very small niche boards, higher temperature circuits or special long-flex circuits. Shops must find their "special gem" within existing products to promote and sell.

Back to the issue of internal training and discipline: Most PCB shops we visit have employees that do not completely understand the technology that goes into board production. These employees can destroy a high-cost special job because they didn't realize that leaving a board in the plating will overplate and mushroom the top of the dry film. The actual cost of properly training employees is minimal--sometimes costing only a few dollars per employee. This small amount is much better than the potential cost of replacing materials destroyed due to ignorance.

Most PCB shops can achieve success by finding a suitable niche market and evolving to be the best in that market. Shops must stay current with technology, hire someone who really knows the technology behind their niche market and invent new products. Shops must also work with qualified engineers and consultants to refine processes to lower costs and increase prices. Facilities should make the effort to hire smart, qualified engineers--not PCB manufacturing non-engineers. Without extensive expertise in electronics and material properties, an employee would not understand why, for example, printed carbon resistors do not make good resistors or why diminutive 15-micron microelectronics can work in impedance applications.

If you do not want the auctioneers knocking on your door, clean up the shop (this cost basically nothing; just paint and housekeeping); hire an expert in the high-technology field you want to enter; invent new methods to make high-technology circuits; write articles (they are free advertising); hire Dan Beaulieu to show you how to sell and reinvent your company; hire representatives and create a professional Web site; and learn to sell yourself.

Bob Tarzwell, Director of Technology at Sierra Proto Express, is working with Ken Bahl to introduce new bleeding edge, advanced circuit technology like lead-free, high reliable electronics, heat sinking technology and ultra fine lines to the world. Since selling his company in 2000, Bob has disseminated PCB high-tech to many companies as a consultant, and has written ten books on PCBs and car racing. He has three patent-pending applications in fine lines, high reliability and outer space PCBs. He is currently semi-retired in the Bahamas, spending his free time writing books, working on antique cars and deep sea fishing.

Ken Bahl, President of Sierra Proto Express (San Jose, CA), started in the PCB business in 1965 as a process engineer with Honeywell in New Hampshire. In 1986, Ken founded Sierra Proto Express, the PCB industry's leader in innovative bleeding edge technologies--dedicated to producing Tomorrow's Technology Today.

For more information, visit http://www.protoexpress.com/.