Issue link: https://iconnect007.uberflip.com/i/1519075
APRIL 2024 I PCB007 MAGAZINE 17 Johnson: We've recently spoken to well- known industry leaders working to shift PCB fab startup costs down dramatically to just barely eight figures. Is this a game changer in terms of potential investment into new PCB shops in the United States? Kastner: I think there's been a fair amount of talk, but you really haven't seen existing fabs do that. Instead, they have chosen to invest in their facilities. It sounds good, but I do not know whether that would translate to new facilities being built in the United States. DuBravac: It goes back to the conversation we had in the beginning: the constraint is not about cost as much as it is demand. Not having clear demand is the bigger concern. As Tom mentioned, it seems that the companies that are investing typically are tied to a DoD con- tract or some other type of commitment. Johnson: It does seem like the growth for brand-new facilities in North America has been captive. Kastner: at's right, and believe me, I would love to see new plants go up here. at would be fantastic. In my view, the economics are just not there. LaRont: Shawn, do you foresee significant changes or shifts globally? DuBravac: Well, China has its own headwinds, and it's massive. It's not going away. China pre-announced its economic growth recently, and it was the lowest reported in decades. It's not really growing. Outside of China, there's growth in Malaysia and Vietnam, for exam- ple. ere is opportunity here in the U.S., but it's not clear what that is. If the opportu- nities were clear, people would come. at's the beauty of America. If somebody sees an opportunity, they will 100% go aer it. Tom and I agree that several things must line up for it all to make sense. But we will certainly keep an eye on it and look forward to reporting on what we see. Johnson: As always, it's interesting and edu- cational talking with you both. Any parting thoughts? DuBravac: e main thing to walk away with is that everything hinges on demand. If demand is there, everything else gets in line. If demand is there, everybody comes out of the wood- work and says, "Yeah, I'll put money behind that." If demand is there, everything else will take care of itself. Kastner: Investors are committed to growing, but for how long? ese are smart investors. I don't foresee anybody going IPO on either side—boards or assemblies—but there is mea- sured investor support out there. It's not crazy, over-the-top support, but it's there. LaRont: Tom and Shawn, thank you both for your time and insights. PCB007 Tom Kastner is the president of GP Ventures, an investment banking firm focused on sell-side and buy-side transactions in the tech and electronics industries. GP Ventures has offices in Chicago and Tokyo, with five people in total.