EIPC 2025 Winter Conference: Business Outlook and New EMS Opportunities

Estimated reading time: 9 minutes

And when the purchasing managers index for the eurozone was considered, the news was disappointing:

“The HCOB Eurozone Manufacturing PMI, a measure of the overall health of eurozone factories compiled by S&P Global, posted its thirtieth successive sub-50.0 reading in December, marking two-and-a-half years of continuous decline in factory operating conditions across the single-currency market. At 45.1, the headline index dropped fractionally from 45.2 in November to a three-month low.”

Specifically for Germany:

“Germany's manufacturing sector ended 2024 on a disappointing note, recording sharp and accelerated declines in both output and new orders, the latest HCOB PMI survey showed. There were further cutbacks to employment and inventories as firms adjusted to the weaker demand environment, albeit with the rates of decline easing in each case. Growth expectations amongst goods producers remained muted, and even weakened slightly from the month before, reflecting political uncertainty and concerns for the German economy.”

And even worse for the UK:

“A stalling domestic economy, weak export sales and concerns about future cost increases led to the steepest contraction of UK manufacturing production for almost a year in December. Manufacturers are facing an increasingly downbeat backdrop. Business sentiment is now at its lowest for two years, as the new Government's rhetoric and announced policy changes dampen confidence and raise costs at UK factories and their clients alike. SMEs are being especially hard hit during the latest downturn.”

But things weren’t looking as bad in Southeast Asia:

"The overall performance of the Thai manufacturing sector strengthened in December, with the fastest rise in new orders recorded in over a year-and-a-half. Output growth picked up but could not keep pace with demand, partly because of a lack of hiring during the month. As a result, backlogs of work rose at the strongest rate since June 2023, and manufacturers continued to sell directly from stock. The two-month outlook remained positive, with sentiment continuing to run above its long-run trend level.”

Prismark forecast that global PCB output will increase from $69,507 million in 2023 to $90,414 in 2028, a CAGR of 5.4%, but China’s figure will be only 4.2% and the U.S. and Europe down at 3.9% and 3.1%, respectively. The highest growth will be in Taiwan (7.8%), with Southeast Asia and the rest of the world,  accounting for 12.6%. The U.S.’s share of the market will decrease from 4.6% to 4.3% and Europe’s from 2.5% to 2.2% over the same period.

Nakahara counted the numbers of PCB companies by region in October 2024. The corresponding numbers of factories were: China 1,480; North America, 235; and Europe, 190, of a world total of 2,692.

Dieter Weiss  reckoned that at the end of 2024 there were 184 factories in Europe, belonging to 169 companies, 152 companies having vanished over the past 15 years.

“China has a global market share of more than 60% and Europe staggers at around 2%. There are discussions again on European and local levels, the same in the United States. Will that help? I cannot answer it at present. But I can guarantee, that in 10 years from now, another 50–60 factories will be gone, the European share of the global PCB market will have reduced to below 1.5%, and we will not be able to even manufacture PCBs needed for system critical applications (that is not only defence) in Europe.”

Sobering thoughts!

The second keynote came from Otto Pukk president and CEO of InCap Corporation focused on EMS needs and expectations.

He introduced his company as a full-service provider in electronics manufacturing services, operating around the world, with headquarters in Helsinki in Finland and operations in Finland, Estonia, India, Slovakia, the UK, the U.S., and Hong Kong, employing a total of 2,270 people.

With a bold opening graphic, “INCAP ROCKS: From prototypes to global mass production, InCap's factories are specialised in manufacturing electronics, electromechanical products and final assemblies.” He listed the locations, factory sizes, and industry sectors serviced at his seven manufacturing plants. 

He stressed that sustainable operations are an integral part of InCap’s mission in achieving the company’s goals, and declared his commitment to actively promoting sustainable development to meet the increasing expectations of all the company’s stakeholders. The objective is to increase the positive impact of InCap’s operations and to reduce its negative footprint through systematic development work focused on economic, social and environmental themes. These have been defined through a materiality analysis involving key stakeholders, employees, customers, and investors and will be promoted as defined in our sustainability program.

InCap’s business included manufacturing PCB assemblies, prototyping and engineering, test development, box-build assembly, and customised solutions. Their success formula is based on a de-centralized business model with a customer focus, cost-efficiency and employees taking responsibility. Their growth strategy focuses on three strategic cornerstones: growth, profitability, and operational excellence.

The company has an impressive list of quality standards and accreditations: ISO 9001, ISO 14001, ISO 45001:2018, ISO 13485, IATF 16949:2016, AS 9100D, 10CFR 50 Appendix B and 10CFR Part 21 Compliant, and a policy of continuous improvement.

So what are the EMS providers needs and expectations? Pukk identified the procurement process as a fundamentally important factor, combining precise scheduling from order-taking to delivery, automated supply processes to optimise efficiency and ensure reliability, an integrated control system to place orders quickly and efficiently, the ability to source components anywhere in the world backed by a network of global suppliers selected and managed according to their technical and economic performance.

InCap’s philosophy is to aim at building strategic partnerships with its customers and long-term relationships with its employees, achieved by having a strong focus on quality and productivity, valuing time-to-market and always excelling in on-time delivery, offering a very flexible operational model, having a proactive work culture, maintaining the highest level of ethics and being an equal-opportunities employer.

Pukk went on to discuss areas for improvement and the company’s roadmap for the future. There was an ongoing program of investment in state-of-the-art production equipment to increase capacity and SMT capability. In India, it has enhanced its share of renewable energy with a substantial investment in solar power, aimed at reducing the company’s carbon footprint and improving energy efficiency.

Tarja Rapala-Virtanen moderated questions and answers before the commencement of the technical conference sessions, which are reported separately.

I am grateful to Alun Morgan for generously sharing his photographs.

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