Marcy’s Musings: The Legislative Outlook—Helping or Hurting?
It’s Only Common Sense: The Phone Is Still Mightier Than the Keyboard
The Marketing Minute: Marketing With Layers
Becoming an Automotive Supplier—Proceed with Caution
September 30, 2015 | Yash Sutariya, Saturn Flex SystemsEstimated reading time: 1 minute
In past articles about PCBs for the automotive industry, we've discussed topics such as applications and quality systems requirements for becoming an automotive PCB supplier. Possibly further fueling a growing desire in our industry towards participating in this sector have been further technology advancements in automobiles, as well as a tear in Tesla's stock price and headlines.
Sales dollars in the automotive industry are traditionally very sexy, top-line numbers, but a nice bottom line has often been an evasive target, as evidenced by the slew of automotive supplier bankruptcies in the past 10–15 years. Fortunately, the past five years have shown a tremendous recovery in the industry, leaving most participants with positive income and much stronger balance sheets. This is yet another carrot to becoming an automotive supplier.
Before you make that plunge to becoming an automotive supplier, we need to talk about liabilities. In our industry, the liabilities for shipping bad boards are generally limited to a range of a) replacing or b) crediting out the bare boards to pay for the assembly (parts and labor) that was affected. Historically, this has been the case for automotive applications, as well. It’s been my feeling that since the OEMs have beaten down pricing so badly over the past 20 years, they generally bore most of the costs of warranty claims.
That’s been changing in the past 3–6 years, as OEMs are under tremendous pressure to keep growing their bottom lines. Warranty reimbursement claims have been one method of achieving improved fiscal performance. Car manufacturers have pushed liabilities to their Tier 1 suppliers who have in turn pushed it on down the line. So if you supply a bad circuit board or assembly, you may have to pay for the installed part. Not only that, you may have to pay for the new part to be installed—and we all know how expensive dealer labor is.
My story goes back a few years, but it is, if anything, even more relevant today with the increasing number of recalls by automakers.
Editor's Note: This article originally appeared in the September 2015 issue of The PCB Magazine.
Share on:
Testimonial
"In a year when every marketing dollar mattered, I chose to keep I-Connect007 in our 2025 plan. Their commitment to high-quality, insightful content aligns with Koh Young’s values and helps readers navigate a changing industry. "
Brent Fischthal - Koh YoungSuggested Items
NOVOSENSE, UAES and Innoscience Advance Power Electronics for New Energy Vehicles
10/20/2025 | PRNewswireThe partnership focuses on developing next-generation intelligent integrated Gallium Nitride (GaN) products. Leveraging their combined expertise, the new devices will deliver more reliable GaN driving and protection features, enabling higher power density and paving the way for wider adoption in automotive systems.
PCBA Market Poised to Reach $147.5 Billion by 2035
10/20/2025 | Globe NewswireGlobal printed circuit board assembly market is projected to reach $147.5 billion by 2035, at a CAGR of 4.7% during the forecast period 2025-2035
indie’s Narrow-Linewidth Visible Lasers Drive Quantum and Automotive Innovation
10/14/2025 | indie Semiconductorindie, an automotive solutions innovator, has released a new Visible Distributed Feedback (DFB) gallium nitride-based (GaN) laser diode from its Photonics BU product line, enabling next-generation quantum, a wide range of automotive applications, including LiDAR and sensing, and Industrial Raman applications with ultra-stable, sub-MHz linewidths at wavelengths from the near-UV (375 nm) to green (535 nm).
Advanced Semiconductor Packaging Market Sees Rising Adoption Across Automotive and Industrial Sectors
10/14/2025 | openPRThe semiconductor packaging market size is estimated to reach at a CAGR of 7.2% during the forecast period (2024-2031).
Tobii, STMicroelectronics Enter Mass Production of Breakthrough Interior Sensing Technology
10/02/2025 | Globe NewswireTobii, the global leader in eye tracking and pioneer of attention computing, and STMicroelectronics, a global semiconductor leader serving customers across the spectrum of electronics applications, announced the beginning of mass production of an advanced interior sensing system for a premium European carmaker.