Issue link: https://iconnect007.uberflip.com/i/1309864
18 PCB007 MAGAZINE I NOVEMBER 2020 Matties: The point is you have to be willing to make that R&D investment because you can't just go to an OEM and say, "What do you want?" and then magically build it. You need to have the infrastructure to support it. Stepinski: There has been nearly zero R&D in our market for a long time, and one of the things that we offer is R&D. We offer the abil- ity to do customization of processes. It looks like there's a lot of interest in this and we can monetize it. The end result is you're bringing higher technology back to the U.S. market, and that's the goal—not just profit. Day: If you have a shop with a high-mix, it's very difficult to be a mass producer. This is also a factor in this argu- ment. By default, we have to do a lot of R&D, but again we're not mass producers. We're not going to mass pro- duce, so we also have the ca- pacity for R&D. Sometimes, R&D has good ideas and a time and place to supply them. A mass production fa- cility could never do this because usually, they owe work; they're behind on work, have stuff on the floor and remakes, and don't have time for R&D. Stepinski: Usually, you do everything on net present value, plus the investment worth. You don't do a bunch of R&D on some one- off thing; you have to really look at what do the customers want and make sure you're designing product lines that appeal to everbody. But if you can't, do at least a couple segments. Nolan Johnson: One of the things that I picked up on when you talked about cutting costs in half on your low tech line is that could be the order of magnitude or more change to the mar- gin for the profitability to a company. That funds the R&D. Matties: You have to be willing to believe it. Stepinski: We have a lot of growth that has to be funded, too. As an example, our equipment company is over 10 times what it was last year for revenue, and these are not easy things to ab- sorb either. Profit is profit, but growth is growth, and a lot of the profit has to support the growth. You look toward the future on everything. Matties: Most fabricators aren't investing in equipment-building companies—they're look- ing at sticking to their PCB fabrication—but you are taking a different approach and build- ing this total solution. Stepinski: When we came to the market with our sec- ond factory and had all these struggles with the suppli- ers, it was like the last gasp of the West to support a PCB fab shop. Everything's in Asia now and is low-cost. Some companies went belly up in the middle of it, and we decided to address any risk in our process equip- ment supply chain by build- ing it ourselves out of our Polish equipment division. With everything elsewhere we have sol- id partners, we don't need to do that. We're protecting the growth of our PCB division and other PCB companies in the West that struggle with suppliers. This is a stab that we didn't ex- pect to have to take, but we had to take it to support our growth. It really hurt the compa- ny not having this in place, and we had a lot of delays because of supplier issues. But that's behind us now because we had to form our own destiny. Day: It puts us in a unique position. Because of this, we have the feedback loop, so then the offshoot from this is we are in a position where we can create turnkey factories because of it. Stepinski: And we are in the process of doing this now. A week doesn't go by that someone doesn't contact us about another factory.