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An Integrated PCB Producer’s Approach to the Market
July 7, 2016 | Barry Matties and Stephen Las Marias, I-Connect007Estimated reading time: 13 minutes
![](https://iconnect007.com/application/files/8516/3122/1955/NCAB-AndyLiu.jpg)
NCAB Group is one of the biggest PCB suppliers in the world. Barry Matties and Stephen Las Marias recently met with Andy Liu of NCAB to discuss an integrated producer's approach to the market, new design tools, the current state of the Chinese market, and the future of 3D printed electronics.
Barry Matties: Andy, start by telling me a little about NCAB and what you do.
Andy Liu: NCAB Group is a leading player in PCB production, with 13 sales companies around the world. Our ongoing goal is to provide high quality products to our customers. We have our own staff, our own standards, and we also provide local and global support to our customers. It is a global society.
Matties: And you are introducing some new design tools? What made you to want to produce design tools?
Liu: Earlier, there was not a particular demand for this, but now the technology is increasing and we've got more and more FPGAs using finer pitches. This creates a lot of challenges for PCB layouts itself. In the meanwhile, we want to design something that we can have the manufacturer build at the lowest total cost. Our design team consists of ten people, and above that, we have about 283 people that manage our daily business from quotation to delivery.
Matties: Of the 283 people, what do they do?
Liu: We have two parts: the local offices which handle each local market, and then we have the factory management. They are centralized in Shenzhen and Europe, and they control the quality, implement our standards, monitor the deliveries, and sustain the factory. Our factory management team in China consists of around 60 persons.
Matties: If someone needs a circuit board, they come to you with a design and then you put it with your best supplier partner, and that could be in China, Europe, and the United States or anywhere they need it, basically?
Liu: Yes.
Matties: The advantage of them coming to you is that you manage the relationship with the factories. They don't have to worry about that, and you set a quality standard that you make sure your suppliers adhere to in order to make sure that your customers get the best product. Now, with the customers, do you do all the billing? Do they pay you directly for the circuit boards?
Liu: Yes. We take the full responsibility.
Matties: And you guys have been doing this for how many years?
Liu: Over 20 years.
Matties: So you've seen a lot change in 20 years. How long have you been with the company?
Liu: Ten years.
Matties: Boy, you've seen a lot of change in 10 years in China, for sure. What's the greatest challenge in that model for you?
Liu: I think it's about communication. Sometimes customers don't know what they want. They think, "I just need a reasonable product. I don't need this hole plating at 25 micro inches. Why do I need that? That’s an added cost for me." The challenge is for a customer to understand how important it is to have those requirements in place. It's not cost adding, but it's cost-savings in the long term. Plus, PCBs can be a surprise product. Different factories use different materials, have different internal standards, and you can get shocked.
NCAB is a company that can meet their customers’ expectations. In a way, we are selling sleep. If you buy the PCB from us, you can sleep. We don't want there to be any shock in the future.
Matties: So you guarantee quality and they don't have to worry about it. On-time delivery?
Liu: Yes, that’s very important.
Matties: What sort of revenue do you do?
Liu: Last year, we were doing about €138 million. This year, we're targeting about €158 million. Within three years, our target is €200 million.
Matties: That's a big number.
Liu: In PCBs, yes. Our vision is to be number one wherever we are and bring the benefits for our customers.
Matties: You certainly have competitors. There are a lot of brokers, if you will, that compete against you. How do you stand up to a competitor? I know that some of them have design tools, and they say a lot of the same things that you might say: "We provide quality, we give you the best price, and we let you make sure that you can sleep at night." They all say the same thing, right?
Liu: Of course. It probably sounds the same in one or another sales pitch. If you look at NCAB, we have been successfully partnering over 30 out of the top 50 EMS companies in the world. Actually, in the USA, we also received the highest award from the Parker Group, a famous American company. We are awarded their Gold Link Parker prize.
To have a good quality performance and on time delivery becomes basic, so, what we do is single out what the customer really wants based on customer value-added savings. For the last three years, we have saved about over $1 million for our customers with our ideas and innovations. This is what NCAB, as an integrated PCB producer, can offer. Normally, the business model for a manufacturer is that they’ll just manufacture what you give them.
Matties: There's a portion that do that, but that's the old thinking. I would argue that some of these fabricators don't do that. They come in, they run their design tools, and they provide a lot of what you're suggesting. The new thinking is more in line with providing the service, providing the tools, doing the DFM checks and helping them. A lot of fabricators are providing design services, design applications and engineering or consulting services. I think maybe the landscape has changed a bit to where more fabricators are offering what you're offering.
I think the advantage you have, though, is you can place the work with the right fabricator, where a fabricator is a fabricator.
Liu: You need size to do this, and what we have is buying power. If you only buy $1 million in total, but you have certain standards and want to implement this into everything you buy, sometimes that can be a challenge.
Matties: So the volume that you do allows you to give better competitive pricing?
Liu: Yes, and also to keep up the quality standards.
Matties: Well, quality is subjective, because they could produce higher quality, too, regardless of price. Quality is separate from price.
Liu: It's not only about machinery. It's also about the people. In the factories we use, we have approved some of the employees to be qualified to handle our products and who understands our qualification standards. If you look at the production line, you will also see some machines with the NCAB logo on.
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