Issue link: https://iconnect007.uberflip.com/i/1447212
56 SMT007 MAGAZINE I FEBRUARY 2022 Matties: Where are counterfeit components fitting in? Ghalili: We have been lucky. Procurement has been exceptionally adamant about verifying the source and making sure it is indeed the right source before we even take a chance of paying them any money or getting parts. We generally cannot get parts to check and verify, so we must be very cautious in this area. I know that we've delayed production because procurement was not comfortable with the source. Johnson: What would be your recommenda- tion for the industry to manage input costs? For example, if you had to work just with the Fremont facility, how would that change your strategies? Ghalili: We had the manufacturing facility in China first, and then we set up the U.S. facil- ity. But if I didn't have the China facility, then setting up the Fremont operation would be a major challenge for me because I wouldn't have the backup resources I have now. I know that it's not going to be easy for anyone start- ing off, but if you specialize in the market and you have good connections with one or two major customers that you can work with, that may change the dynamic. But I would not have started at Fremont if I didn't have the full sup- port of the China operation. Johnson: Is this a time to be pursuing mergers and acquisitions or is this more akin to a time to, well, start something up? Ghalili: When I think about our Fremont oper- ation, it was a great time to set it up and go for- ward because once you have the capability to leverage resources globally, it works. ere are a lot of entities, for example in India and other areas, that can support you, whether it's a pro- curement of raw materials, or maybe program- ming of your systems. If you're able to lever- age that, then I think you're in a good position to start. But the old style of doing it all yourself, hir- ing your own procurement and engineer- ing program teams is going to be a challenge. ere are a lot of available resources and it's not a bad time to experiment. I don't think that many people are doing that yet. Matties: How is China dealing with the chip shortage? Ghalili: e chip shortage has impacted every- one, especially in China. A few of the factories supplying automotive parts have been shut down for weeks. e ones supplying mechan- ical parts can supply components. But due to shortages of semiconductors upstream, supply has been impacted. Matties: Oentimes, the Chinese government will step in, help subsidize and get things mov- ing again. Is there any of that conversation or is this le to the private sector? Ghalili: From what I know, they are investing a lot just like I think the U.S. is in semiconduc- tor fabs. But this is not something that they can change overnight. It will not impact produc- tion right now. In our city, for example, the gov- ernment has been aggressively seeking to bring semiconductors and fab shops into the city. Everyone is working on it, but nothing is going to happen overnight. is is one area where it takes time to build a fab and bring it up. Matties: It just depends on how much red tape is in the way in any country and how willing I know that we've delayed production because procurement was not comfortable with the source.