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JULY 2022 I PCB007 MAGAZINE 55 it. It used to be that a car had something like three circuit boards. Now, they have 103, right? We're walking around with circuit boards in our pockets, on our bodies every day, whether it's your watch, your phone, or your earbud. Some- times you have all three at once. Twenty years ago, you had zero. You had a bag phone in the car. at's why all these private equity money guys are trying to get in this space right now. Johnson: Is that where the money's coming from? Private equity? De Serrano: Yes. Johnson: What about venture capital? De Serrano: PE guys. ey want to get in now, turn it in three to five years, and sell it. ey'll buy two or three. Johnson: It seems that the strategy is to gather up the small mom-and-pop shops into a larger operation under private equity money. at con- solidates the market. Will this be good for us? De Serrano: In the long run, yes, if it doesn't become a monopoly. For example, the DoD used to have quite a few vendors, but many of those vendors were acquired and now the DoD has that one big supplier, us, and a couple oth- ers; but they don't have a lot. If suddenly there were only 10 fabricators in the United States but they're all U.S. owned, that wouldn't be too bad, because you would still have compet- itiveness. e problem is with the mom and pops that are doing $4 million. You buy them for $5 or $8 million, then you have to invest $10 or $12 million more, just to get it up to where I can build a three-lam job with a 0.5 mil pitch BGA, stacked microvias, or rigid-flex. Sooner or later, it will probably boil down to having maybe 15 or 20 companies in the United States that build circuit boards for the whole country. Each one of them might own three or four shops. Numbers vary depend- ing on who's counting, but there are about 150 le. Some additional acquisitions haven't been announced. I know because we were trying to buy one when it got sold to another company. We're probably down to 140-something now. Out of the 140, my data shows us that about 90 of them are $10 million or less in revenue. ere are about 25-30 shops that are $10 mil- lion to $21 million in revenue. en you have maybe 10 or 15 le that are above that. at's about all there is. I don't think anybody will catch up to the two major companies because they continu- ally look at making investments. If they consoli- date the market too much, then it would be ter- rible for the whole United States. It would be like the cellphone networks. We used to have 20 companies doing cellphone networks. Now you have Sprint and T-Mobile together, AT&T, and Verizon. ere are three. I don't think three suppliers would be good for our industry. Johnson: Is there hope for the small boutique shops? De Serrano: If the PE guys come in and acquire them, there's hope. When I'm analyzing these companies, I find that some have very large buildings—maybe 40,000 square feet—but their revenues are more like $15 million. If you have a building that large and you do things Sooner or later, it will probably boil down to having maybe 15 or 20 companies in the United States that build circuit boards for the whole country.

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