Issue link: https://iconnect007.uberflip.com/i/1473479
JULY 2022 I PCB007 MAGAZINE 33 I don't mean to put them down. I very much admire them for being able to sur- vive and do what they do, but I'm not sure how much lon- ger they can do it that way. It makes it hard for them to grow the business. ere's either bank financ- ing, or private equity financing is available. Johnson: How much influence has the recent U.S. govern- ment legislation—the CHIPS act, the PCB Act of 2022—had on the current M&A envi- ronment? Is government involvement helping to change the investment perspective? Kastner: Yes, particularly among the private equity world and other investors, and for banks as well. Every little bit helps. Every pri- vate equity deal that's done, every acquisition that's announced, is just further evidence that this is a good sector to be involved in. ere are also the other market dynam- ics that are helping. ere's the trend to move away from manufacturing in China for IP security reasons. ere have always been logistics and communications reasons, and now add IP security to that list. I'm hearing more and more that the end customer would like to move production to North America, because they're concerned about IP secu- rity for medical equipment, communications, or other things where there's a fairly high margin. Johnson: You just ran through some key areas where a fab might invest to upgrade their manufacturing floor. But simultaneously the U.S. electronics industry is increasingly pro- tecting the IP. We have the emergence of the CMMC (Cybersecurity Maturity Model Certification), for example, creating a cer- tification process that runs through the sup- ply chain. ere will be companies which, I suspect, receive notice that they need to go through CMMC compliance because some- thing that they build is specified for a system that requires it. Going forward, it looks to become a key part of the industry just to do business and, in many ways, a place to invest as well, regarding cybersecurity, data man- agement, and basic hygiene. Kastner: Everyone will need to pay attention to that bill sooner or later. Companies typically do not announce that they were hit by ransom- ware, but I know it has affected everybody. But in tandem with protection against ransomware or other cybersecurity issues, you must ensure you're compliant. ose concerns are only going to increase as the compliance require- ments come online, but it's also good business practices. If you haven't been hit yet, you're just lucky.