Issue link: https://iconnect007.uberflip.com/i/1493797
58 SMT007 MAGAZINE I MARCH 2023 the North American market, including proj- ects I've never seen before. If something happens geopolitically in Tai- wan, for example, the factory space in North America will be at a huge premium. From a cold start to a legal agreement to manufactur- ing ODM product in North America, it won't happen that quickly. e bigger deal is worrying about whether the world will be stable or whether it's best to move manufacturing to a region unaffected by global instability. We hear that in almost all our conversations. Is it fair to say that the geopolitical effect is a primary driver for your customers? Yes. ere was a switch six months ago; many are just resigned to a difficult sourcing situa- tion for the next year or two. Now, they're worried about the next shoe that will drop. Frankly, it all started when Rus- sia invaded Ukraine. It seems unrelated, but that's what customers were sharing. ese days, anything can happen. If you told me two weeks ago we would be talking about Chinese balloons, I would have said that's crazy, but that's where we are now. Supply chain managers are probably no lon- ger thinking that we'll go back to normal—that ship has sailed. The overall view of the supply chain was starting to shift toward becoming resilient and multi-channel after COVID and that has only amplified, in my opinion. But the real action is the quoting activity in the supply chain. e CEOs can say whatever they want on their earnings calls, but if they're not incentivizing their teams to diversify their supply chain, nothing will happen. We see that happening. Is the reshoring activity coming from new projects, or are your customers bringing existing product back as well? It's both. What we see is that if the contract is up for renewal, they'll run a competitive bid with a multitude of companies, including companies in North America. Off to the side, they'll whisper, "Just between us, we want you guys to win this." It's a competitive process, but if it's in the range of 7–10% more than my Chinese counter-parts, they'll award that deal to North American companies. is may not last forever, but we are in a sellers' market right now. North America is in demand. at doesn't mean that we can do whatever we Misha Govshteyn