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It’s Only Common Sense: Get Ready for Price Increases

You know it’s coming. In fact, in many cases, it has hit already. Our PCB and PCBA companies are going to have to raise their prices this year. It is not a matter of greed; they are not trying to gouge you or take advantage of you. That's not it at all. It is simply a matter of fact that prices must go up if these companies are going to stay in business.

You do want them to stay in business, right? I know I have heard all our customers say this during the two years of the pandemic. Remember how shocked you were when you found out that we could not produce ventilators or respirators in this country anymore? Remember how outraged you were when your products could not be delivered to you on time because the lead times on capacitors had gone out into next year? Remember how you swore that we should never have let this happen, that never again would we allow ourselves to become so dependent on other countries for our critical products?

Why, I even heard some of you say that the $29.99 Blu-ray player from Asia just wasn’t worth it anymore, and that we were all going to have to bite the bullet and agree to pay a little more to keep and support our own domestic manufacturing facilities in order not only to survive but to protect the American way of life.

Well, I certainly to do hope that you remember saying (and feeling) that because the time has come to put your literal money where your proverbial is.

In terms of your domestic PCB fabricators, here is what they are facing:

• Increased prices for all laminates, especially the high-tech laminates
• Increased prices on chemicals and other commodities
• The demand to start paying a good living wage to their employees
• Increased costs of shipping charges, especially expedite charges, as they need to pay extra to get the products to meet your lead times
• Increased costs of getting equipment repaired or replaced. They have had to wait weeks (if not months) to have critical equipment repaired and then actual years for that new piece of equipment they ordered and partially paid for already.
• A severe annual increase in health insurance (probably the worst license to steal this country has ever seen). If you want to complain about the increasing costs of doing business, you should look at health insurance first. The companies’ insurance premiums are going through the roof as are their employee’s monthly contributions. Nobody wins this insurance game, not users, not doctors, not hospitals… oh wait, of course someone is winning. I wonder who?

I am not sure I have covered all of the increasing expenses, but I feel like I’ve got a pretty good start and an excellent case for why your PCB board prices are going to rise during the coming year, and justifiably so.

Now let’s talk about our assembly companies. They are faced with the same increasing costs of doing business as the bare board shops are, and more.

• They are being hit with huge increases in component costs, if and when they can get them at all
• Because of a lack of available components and long lead times, assembly companies are also hit with the cost of money. Their business is based on turns, which is how fast they can turn all the orders around so they can be paid for everything they have already prepaid. If their assemblies are sitting on the floor waiting for missing components they are literally burning through money
• They have the same increases in costs of shipping, costs of paying a living wage to their people, and that good old health insurance
• Of course, let’s not forget the increase in the cost of the bare boards as well

This is not affecting just our business, but in all businesses. We are all facing some drastic increases in everything we are going to buy in the coming year and beyond, from groceries and cars, to clothing and, well, everything.

All I ask is that you recall what you said a few months ago, when you were cursing the demise of this country’s infrastructure, when you couldn’t get paper products, masks, or even sugar and flour for a while, never mind a respirator to save your mother’s life. Remember how you promised that you would be willing to pay a little more to support our domestic industries? Well, that time has come.

By the way this increase in prices might have been exacerbated by COVID, but it was already heading our way long before COVID. We have had this problem of not supporting our domestic infrastructure for years. Most of us did not realize it, or chose not to recognize it, until it hit us square in the head.

And one more thing: This phenomenon is global. Every country in the world is facing the challenges that are causing prices to rise everywhere, no matter where you are in the world. So, when you sneak over to Walmart to buy that Blu-ray player for $29.99 you are going to be shocked when you find out it now costs $129.99. Get used to it.

It’s only common sense.

Dan Beaulieu is president of D.B. Management Group.