Pricing of Production Quantity PCBs and Assembly (USA vs China) - Page 1
Forum section: electronics / general

author: radiostuff
author_rank: Contributor
timestamp: January 13, 2021, 05:25:52 pm
content: Is it possible for US PCB manufacturers and assembly houses to be cost competitive with Chinese factories, under *any* scenario? Every year I send out quote requests in the US, but the numbers are always 5-times higher than quotes I get from the Shenzhen factories I use.I typically see per-placement costs under $0.01 in Shenzhen. In the US, the cost is at least $0.05 (the lowest I have seen). The highest I have seen for production quantities (1000pcs) is $0.10 per placement. All of my boards are single-sided and generally 100% SMT. On average, there are 75 uniques and 300 total placements. A new board I am working has 37 uniques and 67 total placements, 100% SMT. Even when factoring in express shipping and duties, the cost difference is still substantial.The only way I can figure out to be cost-competitive with Chinese production is by assembling the boards in house, but I'm not ready to do that just yet.Does anyone know of any smaller assembly houses in the US with lower overhead--basically a 2-3 person shop? The production quantity I am interested in 1000 pieces initially, to be followed by 5k piece productions.

author: SMTech
author_rank: Frequent Contributor
timestamp: January 13, 2021, 10:35:46 pm
content: We don't run those volumes, but we have a client that does in European & Chinese factories, they've indicated a price to me around where you suggest your Chinese price is. From there I have done some very crude maths and the throughput required to hit that number with a reasonable workshop rate isn't all that impressive. When running volume SMT its much easier to be competitive than with more manual processes which is how a high profile affordable product like the Raspberry Pi can be manufactured by Sony in Wales.So yes they can and there probably is someone who will, most likely those you have asked just have more profitable work they can do instead.One thing that seems to come across is that the US in particular is really really fond of rigidly followed processes in manufacturing and engineering. That can add expense you might not be getting elsewhere..$0.10/per component seems very high to me, more like the price we would be charging when building 10 boards not a 1000. That happens because @ 10 boards setup and loading is a significant part of the job run time, by the time you get to 1000, it really isn't and so the unique items count is much less important.

author: Mangozac
author_rank: Frequent Contributor
timestamp: January 13, 2021, 10:53:25 pm
content: We run those volumes and last year installed our own SMT line here in Australia. The overall cost (accounting for freight and exchange rates) for us manufacturing in-house is very similar to what we were paying in Shenzhen. Flicking through some of our BOMs it looks like we achieve an average of under US$0.02 per part for SMT assembly on runs of 200-1k.Quote from: SMTech on January 13, 2021, 10:35:46 pmThis is the crux of it. Different customers/applications/markets can be charged at different rates, so it's a matter of finding someone who wants your job. We don't (currently) do much pure contract manufacturing (i.e. just building something someone else has designed) because it's simply not as cost effective.

author: radiostuff
author_rank: Contributor
timestamp: January 14, 2021, 12:30:58 am
content: This afternoon I sent out quote-requests to about six US PCB fabricators and assembly houses. I spoke to one person specifically about assembly. I said that my Shenzhen per-placement cost was under 1-cent and that a Chicago-area CM was just above a nickel per placement. The website of this new company stated "low-cost, high-volume" as a speciality, but on the phone said they couldn't touch 10-cents per placement.Of the US PCB fabricators I contacted, three of them stated that they don't actually fabricate in the US; they manage the production, which is done in China. Hell, if that's the case then I'm better off just working directly with the factory. I'm sure these intermediaries provide some value for the right customer, but I don't have enough margin to share with anyone else.

author: Mangozac
author_rank: Frequent Contributor
timestamp: January 14, 2021, 12:38:03 am
content: Quote from: radiostuff on January 14, 2021, 12:30:58 amEvery middle-man adds cost. If you have the capability to manage a Chinese manufacturer yourself (which is really not that hard if you can get a good recommendation for one) then it would be silly to pay another company to do it.What's your motivation for trying to find a local manufacturer? Is it purely nationalism (I say that without any of the negative association the word has these days) or other points?

author: radiostuff
author_rank: Contributor
timestamp: January 14, 2021, 06:04:42 pm
content: My motivation for finding a local manufacturer has to do with reducing the communication latency. There is a decent amount of value to having the factory within an hour's drive. It means that issues can be resolved same-day and I don't worry about shipping.I'm always a little torn about made-in-America for the sake of made-in-America (nationalism, as your correctly describe it). From a selfish perspective, I would like to support the domestic infrastructure that allows my business to thrive. Having faster turnarounds and fewer communications issues is definitely a net-positive to product development, though it's hard to quantify how valuable that net-positive actually is; is a two-week project reduction worth a $10,000 cost differential?From a purely nationalistic perspective, there's a bit of internal dissonance. There are plenty of Americans who don't want people who look like me to be in this country, so why should I pay a premium to support their businesses purely on the basis of flag-waving? On the other hand, the Chinese supplier may also have a negative opinion of me. So the rational thing to do is whatever makes the most business sense.

author: radiostuff
author_rank: Contributor
timestamp: January 14, 2021, 08:55:10 pm
content: In case this is useful to anyone:A 2-layer board (~2500mm^2; HASL lead-free) has a delivered price of about $0.50 per board for 1000 boards (JLCPCB, PCBway). As the value of the shipment is under $800, there should not be a 25% tariff.Quotes from US-based fabs are about between 4x and 5x the price of Chinese boards.Turnaround time is about the same (two weeks), due to the number of days in transit from China.

author: olkipukki
author_rank: Frequent Contributor
timestamp: January 14, 2021, 09:33:40 pm
content: Quote from: radiostuff on January 14, 2021, 08:55:10 pmCan you source your components directly from CN or do you need import these?

author: asmi
author_rank: Super Contributor
timestamp: January 14, 2021, 09:35:25 pm
content: Quote from: SMTech on January 13, 2021, 10:35:46 pmI think the major reason is those fabs were designed to go after ITAR contracts which simply don't have a choice and will pay any price, but they are usually very particular about strictly following the process (sometimes at the expense of the end result). And since most mil contracts have essentially blank cheques attached to them and so don't really care about costs, these fabs can survive on scoring a couple of really high-paying mil contracts a year, and twiddling their thumbs for the other 95% of the time. Also because they were never really designed for low costs and high efficiency, it's often cheaper for them to just sit on their hands, rather then to pick up some "general market" contracts and later realize that their overhead might not be covered by the margin, or they might not even know (or care) how much exactly their overhead is.Compare that with something like JLCPCB factories which clearly are super optimized for lowest possible overhead. Yes, labor is still cheaper in China, but efficiency is also much higher over there because they have very strong incentive to optimize and innovate.

author: radiostuff
author_rank: Contributor
timestamp: January 14, 2021, 09:39:40 pm
content: QuoteYes, all of the components can be sourced from China.

author: Mangozac
author_rank: Frequent Contributor
timestamp: January 14, 2021, 09:43:09 pm
content: Quote from: radiostuff on January 14, 2021, 08:55:10 pmSounds similar to what I've seen.While there are benefits to helping your local economy, ultimately the decision needs to be made as to what's smart for your business and thus considering all of the relevant factors:Assembly costFreight costDuty/tariffsQuality controlGrey market component issues (if sourcing components from non authorised distributors)Lead times/speedEase of communicationYour level of control of the processNationalism for the sake of nationalism generally isn't the best business decision IMHO, but it can make sense when combined with other factors.Here's in Australia we're in practically the same time zone as China, so communication latency isn't an issue. Maybe you should be looking into assemblers in Mexico?

author: olkipukki
author_rank: Frequent Contributor
timestamp: January 15, 2021, 12:14:23 pm
content: Quote from: radiostuff on January 13, 2021, 05:25:52 pmHow quickly do you think they will need to flip these boards and place almost 70K parts to justify your sub-$1K order?What is a shop rate expecting?

author: radiostuff
author_rank: Contributor
timestamp: January 15, 2021, 05:03:21 pm
content: @olkipukki You are correct; this is not a project for a medium-sized assembly house. There is just too much overhead to make it worth their while, especially if they have an existing customer base that is happy to pay a very large premium for a domestic supply chain.This kind of project only makes sense for a very small shop. I regularly work with a industrial designer/machinist that has a similar type of shop. It's just him and a CNC machine.Assuming two hours to set up the machine and load the reels, it's probably four hours to run through 1000 boards. No test or inspection is required. So $1000/8 hours is $125/hour, which only works for the smallest of shops.

author: olkipukki
author_rank: Frequent Contributor
timestamp: January 15, 2021, 07:56:02 pm
content: Quote from: radiostuff on January 15, 2021, 05:03:21 pmSure, what is CNC in his workshop - Tormach-like or Haas UMC 5 axis?Can he do literally step up just for extra $1 per part from 100 pcs to 1000pcs order size?Quote from: radiostuff on January 15, 2021, 05:03:21 pmIf we skip time before (aka pasta placemement prep) and after (reflow, packaging etc), and will count on an ideal scenario, then PnP >15K cph rate... is it would be possible for a small shop to fit in the suggested target?

author: asmi
author_rank: Super Contributor
timestamp: January 15, 2021, 08:07:19 pm
content: Quote from: olkipukki on January 15, 2021, 07:56:02 pmI suspect that depends on whether PnP machine will need to be amortized as part of these jobs, or if amortization is taken care of by some other means and these jobs are taken in to basically fill the downtime of the line.

author: olkipukki
author_rank: Frequent Contributor
timestamp: January 15, 2021, 08:11:45 pm
content: Quote from: asmi on January 15, 2021, 08:07:19 pmDo you mean they nicked a machine... or they have 10+ old paid machine and fews years left before an retirement, so nothing else to do - let's have a fun (and responsibilities) and place 1000+ boards?

author: asmi
author_rank: Super Contributor
timestamp: January 15, 2021, 09:57:08 pm
content: Quote from: olkipukki on January 15, 2021, 08:11:45 pmCould be either of those. But I actually meant the amortization as the legal/accounting term. As in writing off certain part of equipment's price each financial year from your taxable income, until all 100% of the costs are written off. From this moment equipment is basically overhead-free in accounting sense, because amortization period is meant to be (but in practice very rarely is) equal to the useful lifetime of equipment, so whatever use you can get out of it beyond that time is pure profit. Think of it as financing for the period equal to manufacturer's warranty - it costs you real money while you are paying off financing, but once paid off completely, it's 100% yours and any additional use beyond warranty period you can get out of it is free.

author: SMTech
author_rank: Frequent Contributor
timestamp: January 15, 2021, 10:47:03 pm
content: How you cost your capital equipment into your quotes is up to you somewhat. You could keep all your SMT line costs unique to SMT production and spread those costs over your working hours or expected line utilisation rate, that is perfectly valid. Equally you could say that as an assembly house an SMT line is merely critical part of your operating costs as its hard not to have one and build that number into your overhead that is then amortised across all your billable hours. Or you could go somewhere in between and cost it at your standard rate + X%.Running an SMT job starts with importing data, that may not be a quick job depending on how the data arrives, on average IMHE I would describe it as poor to adequate, it often needs tidying up, verifying inconsistencies, decoding bizzarely name component packages and perhaps generating new part numbers and packages on your SMT system. Notice JLC for example removes almost all this work by essentially forcing you to use their part numbers and file formats to begin with. *You need to check the kit supplied or purchased, there's a good chance you'll find a snafu here too, many is the time I have been issued a SOT25 when it should have been a 353 or SOIC instead of SSOP all because an engineer somewhere has put the wrong letter on the end. *Assuming the kit was good, now you need to load your feeders. If the kit was all proper reels with headers etc intact, this is indeed quite quick perhaps even 1min/feeder might be possible in the real world. Next you have to check your loading, normally this is a 2nd operative, the "buddy loader".Setup the printer, probably a quick job unless you have something old or weird or a Jet printer.Run the first board and check it, here's where you'll find if the rotations are all correct or if there is a component height so wrong you can hear it slam into the board or if for some reason a package fails vision.Fix anything spotted on board one and run the rest - should be smooth sailing, keep the fresh reels flowing with care not to incorrectly replenish reels (this is THE time for loading error to creep in)Give the finished boards at least a cursory inspection before they move on to...Inspection be it AOI, visual, 100% or random sample there has to be something before you pack it upPacking, which adds another consumable cost as would labelling if that were required.There are clearly other steps/costs you or your client might require to meet certain requirements or standards such as cleaning, testing or de-panelling.* It should be noted that these issues reduce dramatically with repeat custom, whether you as a CEM buy the parts or accept kits you build up a dataset over time of their data, part numbers, practices, common mistakes, acceptable alternatives, and all the various things that can slow you down when running a one off. However depending on the work going through, these tasks can overlap with an exiting running job.In our case the hourly rate is far less than $125/hour but we don't run an line process which you would need to hit these volumes because we target lower volumes and more awkward builds. A fairly standard 2 machine line tho' hitting 40Kcph actual needn't be shockingly expensive and would be quick enough to hit the price point, but yes this kind of work would be filler, pure placement with no 2nd load, no component sourcing with margin and no other additional processes is as others point out seriously slim pickings and gives us little to no ability to stand out from the crowd.

author: ebclr
author_rank: Super Contributor
timestamp: January 16, 2021, 09:15:19 am
content: "I can figure out to be cost-competitive with Chinese production is by assembling the boards in house"It Will be even worse, it's impossible to be competitive with 50 USD a month VS 16 USD/ hr

author: SVFeingold
author_rank: Frequent Contributor
timestamp: January 16, 2021, 09:57:01 am
content: Quote from: ebclr on January 16, 2021, 09:15:19 amI don't think this is a generalization that can really be made. There is definitely a strong "anti DIY" sentiment floating around when it comes to stuff like this. And the implication that Chinese production is 50 times cheaper is nonsense."You can't possibly be cost competitive with China! The pay people $0.25 per hour! They get everything cheap! They work nights and weekends!"Doing production in Chinawellis not so easy. Sure, you can fire off a "cheap" order for $1k boards. The quality of what you get is a wildcard. Any problems? Consider yourself lucky if the manufacturer even listens to your complaints, much less acts on them. Don't fall into the classic engineer trap of saying "Management? How hard can that be!"If you are doing production in China and you yourselfare not physically present in Chinato oversee production (or have someone else working for you that is), then you are not properly managing and you can't reasonably have high expectations of getting consistently high quality work done. How much this risk actually matters for you is dependent on you, your product, and your needs. The big players don't get consistently high quality work done in China just because. They get it done becauseeven theyhave employees physically present, in-region, for every build. Even they do not automatically get good work done just by firing it off in an email and kicking back til the boards are in.Any small business that expects miracles like this is gonna have a bad time. Guaranteed. Big companies can absorb huge losses. You can't.On the other hand, while the US might be better (at least easier) in this regard it will be very expensive for small runs. And in both cases the leadtimes will be long.The only way to get small quantities assembled quickly, with good visibility and control of the process, and for cheap, is to do it in-house. Contrary to the "expensive" $16/hr worker in the US: if you have enough work to actually hire someone full time just to run the line then you are doing great. Hell pay them $100/hr. If they keep your line fed for 8 hours a day you will be making more than enough money to justify them.As for DIY you can buy a rock solid Assembleon or Yamaha PnP, less than 10 years old and well supported by a local service center, for $20-30k if you're patient. Often with a bunch of feeders. Stencil printer <$10k. Reflow oven <$10k. If you're doing volumes that aren't unreasonable for manual pasting or batch reflow then even less. If you're willing to risk a bit of maintenance and service calls for the PnP, or don't need 0201s and below, you can get a machine for even less.Call it ~$50k to get a used, semi-modern, reliable line running, as well as the training. $50k? That's the cost of the NRE for ~10-20 US orders. If you're doing large runs (1000s) the payoff will be even sooner. And instead of 2-4 week leadtimes you can get boards turned around within a day or two (sans PCB/stencil build times). 500 boards/day X $0.01/placement X 100 parts = $500 you save on each run. For the $0.05/placement figure quoted for the US that's $2.5k you save per run. Those 500 boards can easily be knocked out in a day unless they're motherboards with 1k+ parts each or something. Do the math. Maybe it works for you, maybe it doesn't.I can tell you for me personally I had a few design contracts that included PCBA and I did them by hand. I told them I was far and away their most expensive assembly option but they didn't care. SMT + THT, manually pasting, reflowing in my DIY oven. I did about 100 boards over a weekend, each with ~130 components and double-sided. It sucked. But the vast majority of the time was part placement. If I had a real PnP I could have easily knocked those out in half a day, no sweat.PCBA - at the level that most hobbyists/companies do it - is not rocket science, no matter how many people try to convince you that it is. Don't discount bringing it in-house. There are very valid reasons to do so, ESPECIALLY for small shops for whom money still matters. At Tesla we sometimes paid $10k-20k for expedited orders of 5 boards. Five! And we never considered doing it in-house because Tesla has plenty of money and the engineers had better things to do. Do you have billions of dollars in cash sitting around? If not, it's probably worth your time to consider.If you have the work you can recoup your investment within months. After that it's all gravy. Plus it's fun watching a PnP run.

author: tszaboo
author_rank: Super Contributor
timestamp: January 16, 2021, 10:16:58 am
content: European manufacturers can compete with the chinese on price. At least, there is a range of quantity, where they can. I've just asked 6 quotes for a board, that is prototype quantity. The CN price was 3x better. Set up costs drove up the price significantly here. Basically, the "I dont touch it unless you pay me xxxx EUR" was going on here.But that's not the situation when it comes to producing in the -several thousands a year- quantity. EU is price competitive, quality is better, support is infinitely better. Even if there is a difference in price, you end up using local assembly house for the convince and reduced paperwork.And if you go above this, the situation changes again. At those numbers, you are forced to change the BOM to use local CN parts, and produce there. It will start mattering, if you use the Murata capacitor, which costs 0.002 or the local CN one, that is 0.0008. At that point, we can't compete in price. And that's fine.I design products that are sold with 500-1000% margin. Consumer products are sold with 10-30% margin.But there is a large variance in quotes in the west. If you cannot get a good price, maybe you turned to the wrong manufacturer. If it is too big, you have to pay their overhead costs. If they are too small, they might not have the right equiment to do every step automated. And they are not going to tell you this, if you just wrote an email asking: "how much this PLS?".You have to find the assembly house that's the right size, and has a good management.

author: mikeselectricstuff
author_rank: Super Contributor
timestamp: January 16, 2021, 11:11:34 am
content: Have you compared pricing with Macrofab, who have a more automated setup process than most assemblers, and some facilities in Mexico

author: SVFeingold
author_rank: Frequent Contributor
timestamp: January 16, 2021, 11:43:44 am
content: Unless they've drastically cut their prices, the likes of Macrofab and Circuithub aren't really in the same ballpark. For volume production they're still very expensive. Well, they're expensive for small batch production too but it's not as big of a deal. Biggest problems I've had with them are always leadtimes. 3+ weeks out typically.

author: fcb
author_rank: Super Contributor
timestamp: January 16, 2021, 05:10:20 pm
content: There are places in the UK that like to say "penny-a-placement", the reality is somewhat different. Problem with smallish runs is ALWAYS setup time. Simply takes along time to load/unload feeders.We make small batches of our own products, bought alot of feeders, so we almost never unload, our (secondhand) P&P line paid for itself in the first few of board runs.Having been round a number of CEM's in this country and abroad I would say the efficiency in China far exceeds what I've seen in UK/EU - the staff just seem to move faster, less wasted motion, better tools, & automation. The average age of a UK CEM staff member must pushing 55.

author: olkipukki
author_rank: Frequent Contributor
timestamp: January 17, 2021, 05:47:36 pm
content: Quote from: SMTech on January 15, 2021, 10:47:03 pmWhat machines and ballpark figure do mean?

author: SMTech
author_rank: Frequent Contributor
timestamp: January 19, 2021, 02:44:29 pm
content: Quote from: olkipukki on January 17, 2021, 05:47:36 pmPretty much anything flexibly configured from Hanwha/Mirae/Juki/Yamaha would suit this kind of work at speed, I have a sample complete Juki line flexible rent quote in my email for instance that costs ~€4k EUR/month. The same place was offering a 2nd user dual Siplace X2 line for a bit less. If you wanted a better fit with lower volumes and more changeover then you might go to Europlacer/Mycronic and if you wanted to buy outright such a line you could easily do it for £250K in all new equipment, equally however you should be able to get a pretty decent 2010-2012 line for much much less.

author: olkipukki
author_rank: Frequent Contributor
timestamp: January 19, 2021, 03:34:51 pm
content: Quote from: SMTech on January 19, 2021, 02:44:29 pmThat's exactly bulk figure I got from last on-site Productronica visit in Munich, approx €200K-250K range per mid-level my300/iineo-class machine with decent number of different feeders and a room to grow up later. Not sure if possible to build a line from A-Z for above budget. My impression if a small shop (as OP suggested 2-3 people) wants to be in low-cost PCBA game and don't starve to death, only new/up to date to be in a place and spend more time over phone with customers rather than dealing with old tech issues...

author: SMTech
author_rank: Frequent Contributor
timestamp: January 19, 2021, 05:03:57 pm
content: Quote from: olkipukki on January 19, 2021, 03:34:51 pmI'm not sure I follow the 2-3 man team logic tbh. Properly running a line needs two sets of eyes for proper checks, other bodies are needed for packing, inspection, stock management, quoting, liasing and all the other stuff that goes into running a business. We have encountered very "lightweight" CEMs who have perhaps only 1-2 people with desk jobs, but they also have very little they can offer a client beyond we'll load up your parts and stick them onto boards. No advice, low technical knowledge, no feedback for DFM, no 2nd load capability on some cases, etc.Europlacer pricing is some of the oddest I have encountered, list price is incredibly expensive and you will get that if you make a cursory enquiry. Get serious tho' and the discounts I saw last time were far more considerable than the small % or free feature others would throw in.. YMMV.

author: tszaboo
author_rank: Super Contributor
timestamp: January 20, 2021, 11:23:00 am
content: Quote from: SMTech on January 19, 2021, 05:03:57 pmI think the main issue with these small houses is their business plan. I dont think a pick and place machine could really be profitable, unless you run your factory in at least 2 shifts. The machine costs the same, and you actually don't need 2x the engineering staff or purchasers to run it.Getting/training technicians to load it up and keep it running is not hard. Their overhead cost become too large, and it shows up in their pricing.

author: Mangozac
author_rank: Frequent Contributor
timestamp: January 21, 2021, 01:35:14 am
content: Quote from: NANDBlog on January 20, 2021, 11:23:00 amThat's a fair observation and why I think you'll find that the majority of small shops with an SMT line are either using it for their own products or products they design and manufacture in business partnerships. "Pure" CM work just isn't feasible unless you have a modern, high speed, highly automated setup that facilitates rapid changeover.

author: SVFeingold
author_rank: Frequent Contributor
timestamp: January 21, 2021, 02:58:47 am
content: Quote from: Mangozac on January 21, 2021, 01:35:14 amNot sure I agree. It really depends on what segment you're trying to serve. Not all assembly work is high volume, low margin. If you're a small (even one man) shop with low overhead and you cater to clients that need low volumes for either prototypes or just because it's a low-volume product, and you can turn things around in under a week, there is absolutely a market for that.At my last job we routinely paid $5-$10k per order for five boards at a time, and even with the maximum possible expedite it would rarely be done in less than 5 business days.Take places like Macrofab or Circuithub which have been wildly successful. Why? Their volume scaling is terrible. And I've never seen leadtimes under ~3 weeks. Even so, they serve a valuable market of small businesses and startups that need low quantities and don't want to pay $3k for NRE before a single board is made. They don't mind paying $100/board for 5-10.And then let's say they need 300 boards. Where do they go? A "high volume" CM with the fancy superfast machines that can place 01005 (metric!) are going to have high NRE costs and long leadtimes. A place like Macrofab is still going to charge them $50/board. That's a $15k order.If you're even halfway competent and you have reasonably modern equipment you can easily knock that order out in a day. $20-$40k gets you a 5~10 year old Assembleon or Yamaha PnP with less than 10k hours and several dozen feeders, that'll place 0201s all day long (if you get the right feeders...). $5k gets you a moderately large batch oven. The payback period is not very long if you can find the right clients. You could do an order like each week for $5k and be happy (and not too busy either).There are quite a few underserved market segments. If you want to compete with a giant CM for giant orders, you're gonna have a rough time. If you try to do it with a 40 year old DIY pick-and-place you glued together - like so many do and then talk about how difficult it is to get any good boards out - you're gonna have a bad time. If your first thoughts are "OK I need to rent this 10,000 sq. ft. facility for 25k/month andthenI'll look for clients!" you're gonna have a bad time.But if you have the space (a big garage can do nicely), have the inclination, and are halfway smart about it, then you shouldn't have too much trouble finding a niche you can happily fill.Anecdotally, a mentor of mine back in Atlanta had a few friends that somehow won a 10 year contract to build parking meter PCBs for their city, despite never having used any SMT equipment at all. The contract was somewhere in the range of several million $$ per year. Not only did they figure it out, but the contract paid for their salaries, a couple of employees, a large space, and the entire line. It took them maybe 1-2 months out of the year to fulfill the entire order for that year. The rest of the time they just kicked back while paying themselves $300k salaries.Obviously that's a "stars aligned" kind of situation, but my point is that it's not rocket science. If you begin by focusing on all the ways you're definitely going to fail then yeah, you're probably going to fail.

author: Mangozac
author_rank: Frequent Contributor
timestamp: January 21, 2021, 04:05:39 am
content: Quote from: SVFeingold on January 21, 2021, 02:58:47 amYes, that's fair. I'm talking about 100 to 1k volume orders in competitive markets.It may not be rocket science but your parking meter story isn't really valid. Essentially the city didn't do sufficient homework (did they even get another company to quote it!?) and they grossly overpaid for their production services. Awesome if you can land such a situation but it's absolutely the exception. Most of the time you're competing against other quotes and if your competitors have fast machines with rapid changeover then you don't stand a chance.

author: SVFeingold
author_rank: Frequent Contributor
timestamp: January 21, 2021, 04:16:11 am
content: Government contracts, what can I say.I realize that's a unicorn situation, I'm pointing out that the two guys who successfully filled the contract had no prior PCBA experience. There's a definite tendency especially among the more traditional folks that you can't possibly succeed at PCBA, or machining, or *pick an industry* as a side gig without years of apprenticeship and training and experience and you'll never figure it out on your own and blah blah blah. Basically telling people they're doomed to fail. Hence my comment that it's not rocket science. If you're determined and halfway intelligent you can figure it out.

author: Mangozac
author_rank: Frequent Contributor
timestamp: January 21, 2021, 05:06:11 am
content: Quote from: SVFeingold on January 21, 2021, 04:16:11 amI definitely agree with you there! In 6 months we've gone from zero experience to confidently running our SMT line in many 1k batches.

author: tszaboo
author_rank: Super Contributor
timestamp: January 21, 2021, 08:52:33 am
content: Quote from: SVFeingold on January 21, 2021, 02:58:47 amThat is terrible pricing. I've just recently asked a quote from Eurocircuits, and it was 450 EUR for 2 PCBAs, with 6 working day leadtime. This price included PCBs, Component souring, Component prices (about 20 EUR per board) and setup costs. Only excluded shipping. NRE+Assembly was 300 EUR. And Eurocircuits is a very high profile prototype PCB fab, with 12000 customers.

author: olkipukki
author_rank: Frequent Contributor
timestamp: January 21, 2021, 10:59:55 am
content: Quote from: SVFeingold on January 21, 2021, 02:58:47 amIf you are so competent and confident, why you would deal with old tech and waste time on that while US financing one of easiest on the planet?

author: SVFeingold
author_rank: Frequent Contributor
timestamp: January 21, 2021, 08:06:39 pm
content: Quote from: NANDBlog on January 21, 2021, 08:52:33 amIt isn't great pricing, that's for sure. That's kind of my point. But it's not substantially worse than anywhere else we were quoted. I would also hazard a guess that the PCBs in question are very different and can't be directly compared on pricing. Which has been a topic in this thread, the high price-per-placement cost of most US fabs vs. Chinese fabs. In this case, it was a pretty large double-sided board with a bunch of SMT placements and a bunch of through-hole connectors. Anytime you mix technologies the cost shoots up quite a bit.In your example, what would the cost be if you wanted 100 PCBAs? I've also ordered PCBs that cost around the same as your example but obviously different boards. And never with a leadtime shorter than 2-3 weeks.5 business days w/ local pickup vs. 6 business days + international shipping are also not the same. That's effectively 1 week vs. 2 weeks. This is also my point. There are quite a few companies who will pay the premium in order to shave a few days off the schedule.No matter what the details, whenever this topic comes up there is always someone to say "That's ridiculous, why didn't you use X instead of Y?" The answers are usually the same:1) Because engineers rarely have the luxury of spending weeks to farm out quotes. It's time consuming. It's creating a bunch of random accounts, waiting for quotes, then starting the process of getting a company added to the approved vendor list. Oh, they're in Europe? Hooray! That only adds like 5x the complexity. Your manager will be thrilled that you saved a few thousand bucks at the expense of a week of red tape, in a group that spends close to a million/month anyway. No, you hit up the usual suspects and choose the best one.2) Almost always once the person with the "ridiculous" price submits their particular board to Y vendor, the cost ends up being not quite as amazing as it seemed. Because the boards are different. That you paid $20 and another person paid $100 is not really informative in and of itself.Quote from: olkipukkiBecause financing isn't free money? Because this is exactly the "I gotta take on a massive debt before I can do anything" attitude I was talking about earlier? See my earlier point about not making ridiculous decisions and then blaming the business/the market instead of yourself. To wit "Hey smart guy if you're so smart why don't you finance $300k of equipment instead of spending 15% of that amount on a perfectly functioning used line? That's what the smart money does!" Ok sure. I'm specifically talking about small operations which can still find a niche. 1-2 people. Can you lay out a tangible benefit of the brand new machines that would matter for a small shop focusing on low volume clients?I have a Yamaha service center within driving distance that can provide support and training. Even if it needs service to get running (and if you paid $40k for a broken machine that's on you) the cost won't even come close to what you'll pay for a new one. A PnP from 2010 onwards isn't "old tech." It's not in the same league as buying a beat up 40 year old PnP for a thousand bucks - one that still mashes components against a reference edge for alignment - and trying to place fine-bitch BGAs with it. This is a completely false equivalency.Again - if you are trying to compete on high volume production then yes, you have a much tougher climb ahead and in that case I would agree with you that you need every advantage you can get - which usually means new equipment that can squeeze those pennies out of the margin with increased speed or yield. You will need more capital to start an operation like that. If however you're trying to provide a small, low-volume (~50-1000) line to cater to small business that need prototypes, pilot runs, or small production, then IMO that's something much more achievable.

author: tszaboo
author_rank: Super Contributor
timestamp: January 21, 2021, 10:58:43 pm
content: Quote from: SVFeingold on January 21, 2021, 08:06:39 pmOn some level, I agree with you. If I have to ship something, it will be DHL, local pickup, because I dont have time to compare prices, and why the hell do I have to ship something in the first place.But, just to give you some background. I got the Eurocircuits quote in 5 minutes. I've uploaded the gerbers, BOM, PnP and it gave me a qoute online. They are not going to take my order for 100 boards, that's not their business, but they will gladly make 2 boards for me. I also know, that they have a large engineering group in India, preparing the gerbers, and possibly ordering components now. I could get PCBs (not PCBAs, yet) in two days, if I pay the extra fee for it. I send the order 5 PM, they prepare the gerbers overseas, next day it is in the local factory, next day in my hands.Meanwhile I also see fabs, that are just living in the last century. Tell me, that the factory you mentioned ever would say for any project, that their setup costs are below 500 USD. I'm actually trying to point out, that there is a huge difference between fabs, and you will never see it, unless you look closer. Otherwise you only see a price.

author: SVFeingold
author_rank: Frequent Contributor
timestamp: January 21, 2021, 11:22:18 pm
content: Quote from: NANDBlog on January 21, 2021, 10:58:43 pmDoubtful!I'm not really trying to make a serious argument that the price we paid that one time is indicative of what to expect. From talking to colleagues at my old company they're currently paying a few hundred per board (still small quantities, low tens is typical). Really I'm trying to point out that there is, IMHO, room on the lower volume prototyping side for small shops. It's always a bit of a gray area between quickturn prototyping (cost per unit is high) and mass production (cost for NRE, leadtimes). It might hurt as a startup to pay $5,000 for assembly of a couple hundred boards. But if you're a one-man shop you can easily do that order for less than half the price and still come out ahead.In-house production is another story, which initially got this tangent going, but IMO is extremely attractive for low to medium volume production.