Analysis of Development
Barriers of Low Volume
PCB Assembly Industry in China
1
Management
Ability Barriers
Low volume PCB assembly production mode puts forward high requirements for operators'
production management ability. In terms of production planning, material supply,
engineering data storage, production variety switching and uncertainty management, low
volume PCB assembly manufacturer need more reasonable operation management to achieve
their goals. In low volume PCB manufacturing, the probability of uncertain factors will
be higher. Effective and rapid adjustment and allocation of limited resources are the
key management capabilities that low volume PCB assembly manufacturer enterprises must
have for effective operation. How to ensure the optimization and orderly connection of
various production links, do a good job in quality control of many products and ensure
the delivery date of products are the embodiment of the core competitiveness of Low
volume PCB assembly manufacturer. For new entrants, to build a highly flexible
production line must go through a long-term accumulation process, which builds a high
barrier of production management.
2
Customer Resources
and Sales Network Barriers
The average order area of low volume PCB assembly is small, and the average order area
is only about 10 square meters. Enterprises need a large number of orders and customers
to achieve higher sales revenue. The establishment of a large number of customer
resources and sales network is a gradual process, and enterprises that enter first will
have obvious first-Mover advantage in this respect. In addition, the establishment cost
of sales network is high, while the maintenance cost is relatively low. Once the
first-entering enterprises establish a stable cooperative relationship with big
customers, it will be difficult for new-entering enterprises to compete for their market
share.
In low volume PCB manufacturing, in order to meet customers' demands for products with
different precision, it is necessary to invest more money to purchase advanced
production equipment, and enhance the production and testing capabilities, flexible
production capabilities and continuous research and development capabilities of
enterprises. There are more than a dozen low volume PCB fabrication processes, a wide
variety of production equipment, high unit price of advanced machinery and equipment,
complicated product production process and large occupation of working capital, so there
are high capital barriers. For example, a PCB production line needs dozens of expensive
equipment such as exposure machine, vacuum air compressor, automatic optical testing
machine, laser drilling machine and pattern etching line. Expensive production equipment
and complicated technological process make the investment in fixed assets huge, which
forms a high financial barrier for new entrants.
PCB manufacturing industry is a technology-intensive industry with high technical barriers.
PCB industry integrates electronics, machinery, computer, optics, materials, chemical
engineering and other disciplines to engage in product manufacturing services. Therefore, it
is necessary to have a comprehensive understanding of the corresponding disciplines and have
the ability to comprehensively apply them to actual production.
From the point of view of manufacturing process, with the development of PCB products
towards high precision and high density, the production of various low volume PCB assembly
products, especially various high-end products or special substrate products, requires
different engineering organization and process adjustment, and involves different patented
technologies, proprietary know-how and special processes, which have strong flexible
manufacturing characteristics. Secondly, in the process of product manufacturing,
enterprises need to have various abilities (such as electroplating, etching, drilling,
surface treatment, etc.) in the production of all kinds of low volume PCB assembly products.
Any defects in the process will lead to the decrease of the finished product rate, thus
affecting the operation of the whole supply chain where the enterprise is located.
From the perspective of application fields, the downstream application fields of low volume
PCB assembly industry are extensive, involving industrial control, medical instruments,
security electronics, communication equipment, aerospace and many other industries.
Customers in various industries have different demands for PCB products, and PCB products
have the characteristics of various varieties, complex processes, and endless applications
of new technologies and materials. PCB manufacturing enterprises need to have the ability to
provide solutions for customers in different fields. With the rapid development of the
industry, PCB orders are increasingly concentrated in companies with high technical and
manufacturing capabilities, and in large companies that can quickly provide customers with
comprehensive solutions. However, the small-scale companies are limited by their own
technical ability, so there will be few orders, which will lead to smaller and smaller
profit margins, which will increase the market risk of new entrants in the industry.
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