Issue link: https://iconnect007.uberflip.com/i/1116895
MAY 2019 I PCB007 MAGAZINE 111 based business. Now, they're beginning to understand. China is starting to shift toward a more service-based model, whether that's from an app or a software standpoint to spe- cialty businesses like Microtek that provides high-end services. The big companies are still going to do ev- erything themselves, such as Huawei, ZTE, and Haier. Those companies have decided that if they need to do something, they will build a division. They don't want to subcon- tract anything. And every place that has under- gone development goes through that process where they bring it all in, and then at some point, they spin it all off. But that hasn't hap- pened yet here. That's another development in the future that will help us grow—when larger companies start realizing that their laboratory and testing services are all cost centers. They don't make them any money; they're just full on cost. And they have significant burden of overhead that we can save them. Microtek can save them money because we spread our bur- den of overhead over a bunch of companies while they're stuck with it just for themselves. Matties: But in many cases, everything in Chi- na is a secret. There's still some of that mental- ity out there. Neves: A lot of the innovation comes from look- ing at what's in the industry and doing it better ourselves—not necessarily spending a lot of time doing the innovation themselves directly, but innovating on how to make it better, faster, and cheaper. And that's always been China's success. And another thing that's changing is the people, education, and engineering here is leading to a lot of new and unique stuff. Matties: Maybe less copycat stuff? Neves: I don't know if copycat is the right word. It's looking at a product and saying, "Wow, that's expensive. I can do that cheaper." Matties: Well, there was a foundation of copy- catting, which is part of the ongoing nego- tiations between China and the IP. With that aside, I understand that you're saying they've reached a level of innovation where they're in- novating on their own. Neves: Correct. But every market economy has gone through this. When the new Americans left Europe to come to America, they carried a lot of innovation with them. When Japan was rebuilding after the war, they gained a mar- ket as the cheap electronics copy place and evolved into what they are today. It's happen- ing in a similar way in China. Matties: When you look at China 15–20 years ago, there weren't the manufacturing process- es and knowledge that there are today. Back then, they were learning through partnering with US OEMs. Now, they're capable of manu- facturing and competing on a world-class lev- el with their own product lines because they have the experience. Neves: When you look at the local experts who have been doing it for 5–6 years, they're good, but in the West, we wouldn't consider people "experts" unless they've been doing it for 20+ Humidity lab 1.