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24 SMT Magazine • December 2014 As Chinese manufacturers ramped up capacity from 2000–2002, they offered prices far below what domestic manufacturers could charge, re- sulting in a decimation of the North American PCB fabrication industry. events from 2000–2002 (the downswing) From a population of more than 700 PCB fabricators in 2000, we now number less than 300. More importantly, the North American PCB fabrication capacity has shrunk by closer to 70–80%, depending on whose estimates you go by. For certain technologies, the re- duction in production capacity is even more drastic. events from 2002–2014 (the Upswing) Once the dust settled, North American pro- duction plummeted from approximately $12.0 billion in 2000 to about $3.5–$4.0 billion in 2002. The remaining list of PCB fabricators ranked by size mimicked the much talked about income disparity between us and the "one per- centers." Events occurring since 2006 have resulted in the list becoming gradually more and more top- heavy as a result of considerable M&A activity: 2006 TTM acquires Tyco's PCB division: This is a situation where a high-volume, high-tech com- pany acquires a high-tech and high-volume military operation. Note: Tyco's Stafford, Con- necticut plant is the single largest supplier of military PCBs. 2009 TTM acquires Meadville: TTM doubles its size by purchasing Meadville, whose operations and ownership are based in China. Chinese ownership of TTM is now 45% of outstand- ing shares. DoD cites national security protec- tion and requires firewalls to be set up between military and non-military operations as well as three seats on the board of directors. 2009 Viasystems acquires Merix: High-volume, overseas automotive producer acquires domes- tic high-volume, high-tech producer. 2009 DDi acquires Coretec: Mixed-volume pro- ducer with advanced technologies and signifi- cant military gains high-volume mixed tech- nologies with a small military presence. By 2010, the top 10 PCB fabricators account- ed for more than 25% of the entire market. Ac- tually, it's even more if you consider that it's es- timated that 25–30% of the remaining market value is comprised of PCBs produced overseas and resold by domestic fabricators. Further exacerbating the revenue disparity, we have recently witnessed two mega-mergers that should result in a single entity producing up to 40% of North American production. 2012 Viasystems acquires DDi: Roll-up of mixed volumes and capabilities with primary North American presence. 2014 TTM acquires Viasystems: Creates one of largest PCB fabricators in the world. It also ac- counts for a large portion of U.S. military-certi- fied PCB production facilities. Based on published data, we can surmise that the combined entity's military revenue is approximately $370 million. The military mar- OUTLOOK FOr 2015 ANd beYONd: A SUPPLY cHAIN PerSPecTIve continues FEATurE Figure 2: Make sure all the eggs are in one basket.