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70 I-CONNECT007 MAGAZINE I JULY 2026 V ertical integration in PCB fabrication is a gen- uinely contested strategic question with real tradeoffs on both sides. The core tension: Fabricators integrate up into design and down into assembly to gain margin and stickiness, but risk di- luting their manufacturing focus and alienating the EMS and design-house partners they depend on. A Master's Thesis to Reality I earned my MBA 25 years ago while working at Plexus, the $4 billion global contract manufacturer, and I decided to do my thesis on "Should Plexus Acquire a PCB Manufacturer as a Captive Fabrica- tor?" Managing a global PCB supply base of around $150 million in spend (which would more than dou- ble in the following decade), I had been toying with this idea of vertical integration for quite a while. Now, why would I risk investigating something that could potentially eliminate the need for my position? I was early in my 15-year tenure with Plexus, and if the conclusion was yes, my next step after presenting the results to the leadership team was to leverage my 22 years of leadership in PCB manufacturing to convince them that I should run the new division. But after eight months of research, quantitative analysis, case studies, and endless "what ifs," the data-based conclusion was a resounding "no"; it did not make financial or strategic sense to vertically inte- grate with a board shop. However, there was a bit of poetic irony that the Plexus business model had always combined electronic assembly with design capabilities, so upward integration made sense while downward integration did not. Back in the heyday of PCB fabrication, when the U.S. was the global leader and had over 2,000 board shops, almost every major OEM had its own captive PCB manufacturing operations. When OEMs began shifting production overseas to lower-cost countries, they shuttered their captive shops and purchased on the open market. My thesis research had proved this was the right decision. Twenty-five years later, I stand behind my conclu- sions for EMS/PCB integration. With the ongoing quantum changes in technology, equipment, and processes, no single shop, or even group of shops, can handle all the technology needs of today's market. I still believe it is most cost-effective to source PCBs in a competitive market and utilize a stable of shops that are experts in a select portfolio of technology. While those are my personal biases, let's explore some unbiased, objective, specific pros and cons of vertical integration. Pros For the PCB fabricator: • Margin capture. Design services and as- sembly both carry higher margins than bare-board fabrication, which is a commodity business (to the customer) under constant price pressure from Asian competitors. • Design-for-manufacturability lock-in. When the same company designs and builds, DFM feedback is immediate and iterative rather than arriving late via back-and-forth with an external EDA firm. Yield goes up, and respins go down. • Customer stickiness. Once a customer's IP, libraries, and process knowledge live inside the fab's ecosystem, switching costs are high. The relationship becomes hard to unwind. • Data continuity. Fabricators that also as- semble have complete visibility from Gerber BY ST E V E W I L L I A M S, T H E R I G H T A P P ROAC H C O N S U LT I N G THE PROS AND CONS OF PCB Vertical Integration T H E R I G H T A P P ROAC H