Issue link: https://iconnect007.uberflip.com/i/1475010
36 SMT007 MAGAZINE I AUGUST 2022 a good time to add capacity? It's hard to fig- ure out. It's a cloudy crystal ball. ere are plenty of reasons to argue that now is a good time to invest in this industry. ere is pent- up demand. Electronics are used increasingly in products. We know that there will be a step function in what needs to be produced for automotive alone, let alone other parts of the industry. You see the U.S. government start to understand the need to be strategic with the industry to achieve a healthy domestic manu- facturing sector. We've also learned about sup- ply chain resilience. It would seem like this is a reason- able time. You've got pri- vate equity firms that seem to be getting involved. As a smaller shop in this space, is this a good time to be seek- ing out additional invest- ment, capital, or help? DuBravac: I think it could be a good time to seek outside investment. It remains to be seen how external capital will change and if that will become harder to come by. Monetary poli- cies are tightening, and that will reduce liquid- ity by design. Presumably, there will be less funding available, so it will become harder. To me, the ideas around resiliency makes a lot of sense. ere will be growing demand to pro- duce products and other pieces of the produc- tion cycle closer to the market that you are try- ing to serve. Building strategic capacity makes a lot of sense right now, and private investors are looking for long-term returns. For example, not just building out capac- ity in terms of how much you can produce but in areas that have strong demand. Whether that's more sophisticated, more complex elec- tronics, or whether that's some of these areas we've already hit on when we think about the defense, industrial, auto, but especially around some of the more sophisticated and technical pieces. ere are long-run opportunities there. As you pointed out, the demand is growing. To satisfy that demand, we must add capac- ity over time, and companies that are looking to gain share will be adding capacity broadly; companies that are looking to be more influen- tial in these markets will be adding "strategic capacity" that's focused broadly on some of the complex, highly technical pieces of the supply chain. Johnson: It's an interesting situation to be in. We're starting to see the U.S. government and Con- gress line up and send the message that we need to bring this infrastructure back, both in semiconduc- tors, and PCB, with what's going on there. at level of funding can make a huge difference in our industry. At the same time, we're a free market in the United States. It needs to be com- pelling for private invest- ment. at's how our eco- nomic system runs well. But it's about know- ing the right time to invest, because we have not been a desirable place to spend money in the past. DuBravac: When I've had conversations with the U.S. Commerce Department—and IPC's Vice President of Government Relations Chris Mitchell is obviously in constant conversation with them, so he would be a good source— they're looking at how to incentivize private investment. ey recognize that any amount of support that the Commerce Department or the federal government provides would be limited; not just how to move beyond creat- ing subsidies, but to really create long-lasting investment. What they would like to do is almost match private investment so that it can, in ways,