Issue link: https://iconnect007.uberflip.com/i/1530610
42 PCB007 MAGAZINE I DECEMBER 2024 that workers will likely speak a mixture of ai, Chinese, and English? Can they look to other regions in Southeast Asia for guid- ance? • Pricing for PCBs manufactured in ai- land is projected to be approximately 10–15% higher than in China. e current 25% U.S.-imposed import tariff does not apply to PCBs manufactured in ailand, which does lead to lower landed prices. However, the average time to ship orders from ailand is much longer: an average of six to eight weeks compared to three to four weeks from China (for most types of PCBs). Will these factors still justify insist- ing on a China+1 factory? • Don't forget the costs (time, energy, potential quality loss, ramp-up time) for any change in the manufacturing process. OEMs and EMS have experienced the effort and time required to qualify a new machine or even a line. Surely, qualifying a new factory is worse, and who will pay for it? • If main factories in China lack orders as they do now, how much business would they be willing to transfer to their joint venture subsidiaries abroad? Outlook Some highlights from the China Plus One dynamic currently playing out in Asia: • e trend to build factories outside of China is booming and will continue. • Companies headquartered on Taiwan island are promised orders from the U.S. and due to ongoing geopolitical issues there is a high probability they will get those orders. is means their Taiwan-owned suppliers in ailand will benefit from these orders. • Mainland Chinese-owned companies are also promised orders; there is much more uncertainty about whether these promises will actually turn into hard purchase con- tracts and orders. • It will be a long road to success for China Plus One and will cost a lot more than ini- tially planned. Already, several factories are delaying their official ramp-up dates to the middle of next year and even later. A shortage of construction workers, as well Figure 4: 2028 PCB manufacturing geographies. (Source: Prismark)