Issue link: https://iconnect007.uberflip.com/i/1532052
44 SMT007 MAGAZINE I FEBRUARY 2025 comprises entrepreneurs and long-established companies. Most entrepreneurs think about their exit plan and receiving the full value of what's been built, while established companies always try to figure out ways to grow. Part of growth is getting new customers, but can also be acquiring companies that strategically fit. at acquisition part is our focus. Chaim Lubin: We will talk about what's occurred in the market over the past year, as well as the past several years, that have shaped the EMS industr y into what we have today. We will also talk about where the mar- ket is headed. We'll be infusing our knowl- edge of the industr y not only from the vari- ous companies we work with, but also from the standpoint of how mergers and acquisi- tions are helping shape the industr y. What has happened recently to put us in the current position? Calderon: Since 2016, we've been saying that the EMS industry will be a great beneficiary of what we call the Electronics Super-Cycle. You can see this in your everyday life; electron- ics are taking over. Whether it's an automobile, a coffeemaker, or a machine on a factory floor, electronics are revolution- izing the world. Some- one has to build this stuff. at will pri- marily be the EMS industry. To us, the future of EMS has a spotlight on it. We track a lot of data. We do more deals than anybody in this industry. We talk to a lot of executives, and we've seen an upturn in data starting in 2016. at's what gave us the impetus to talk about the Super-Cycle. Of course, in recent times we hit two big speed bumps. One was COVID, but most EMS companies were des- ignated as essential businesses and could oper- ate through COVID, although it certainly wasn't optimal. What really hit the industry was the sup- ply chain crisis following COVID. Nobody could get parts or predict their revenue. From an M&A perspective, that was a big red light. Most deals were very small. No deals of significance were made in 2022, and especially in 2023. e supply chain crisis froze us, and now, 24 months later, we're coming out of that. Were those disruptions enough to interrupt the Super-Cycle or just pause it? Lubin: I wouldn't necessarily call it either an interruption or a pause. A Super-Cycle is a long- term sustainable growth path that has been around for decades. In our previous presenta- tions at the EMS summit, we defined the Super- Cycle and talked about its previous versions. e Electronics Super-Cycle 1.0 (we now have a 2.0) shows several decades of growth, but dur- ing that time, there were ups and downs. What caused those ups and downs? ere was a variety of effects, but those impacts during these Super-Cycles ultimately caused the soness, then a resurgence once the industry devel- oped a pathway out. Calderon: I would say there was no pause, and because of that, it exacerbated the problem. Demand never came down, and the backlogs at EMS companies went up. Nobody could get parts to sat- isfy the demand. So, while there wasn't a pause in the actual demand, there certainly was a pause in being able to deliver. The Electronics Super-Cycle