Okay you know they are coming. In fact, in many cases, they have already hit. Our PCB and PCBA companies are going to have to raise their prices this year. No, it is not a matter of greed. No, they are not trying to gouge you. No, they are not trying to take advantage of you… not at all. It is a simple matter of fact that prices have to go up if these companies are going to stay in business.
And you do want them to stay in business, right? I have heard all of our customers say that during the two years of the Pandemic. Remember how shocked you were when you found out that we could not produce ventilators or respirators in this country anymore? Remember how outraged you were when your products would not be delivered to you on time because the lead times on capacitors had gone out into next year? Remember how you swore that we should never have let this happen, that never again would we allow ourselves to become so dependent on other countries for our critical products?
Why I even heard some of you say that the twenty nine dollar and ninety nine cent Blu Ray player from Asia was just not worth it anymore, and that we were all going to have to bite the bullet and agree to pay a little more to keep and support our own domestic manufacturing facilities if we were not only going to survive but actually protect the American way of life.
Well, I certainly do hope that you remember saying that… and feeling that, because the time has come to put your proverbial money where your mouth is.
In terms of your domestic PCB fabricators, here is what they are facing:
- Increased prices in all laminates, especially the high tech laminates
- Increased prices on chemicals
- The demand to start paying a good living wage to their employees
- An increased cost in shipping charges, especially expedite charges as they need to pay extra to get the materials in time to meet your lead times.
- Increased costs of getting equipment repaired or replaced. They have had to wait weeks if not months to have critical equipment repaired and then actual years for that new piece of equipment they ordered and placed a down payment on.
- A severe annual increase in health insurance (probably the worst license to steal this country has ever seen). If you want to complain about increasing costs of doing business, you should look at health insurance first! The companies’ insurance premiums are going through the roof as are their employee’s monthly contributions. Nobody wins this insurance game, not users, not doctors, not hospitals…oh wait yes of course someone is winning. I wonder who?
I am not sure I have covered all of the increasing expenses, but I feel like I’ve got a pretty good start and an excellent case for why your PCB board prices are going to rise during the coming year, and justifiably so.
Now let’s talk about our assembly companies. They are faced with the same increases of costs of doing business as the bare board shops are, and more.
- They are being hit with huge increases in component costs, when they can get them at all.
- Because of lack of components availability and long lead times, they are also hit with the cost of money. Their business is based on turns. Which is how fast they can turn all of the orders around so they can be paid for everything they have already prepaid. If their assemblies are sitting on the floor waiting for missing components they are literally burning through money.
- And they have the same increases in costs of shipping, costs of paying a living wage to their people and yes that good old health insurance.
- And of course, let’s not forget the increase in the cost of the bare boards as well.
And this is all not just in our business, but in all businesses as well. We are all facing some drastic increases in everything we are going to buy in the coming year, and beyond, from groceries to cars, to clothing to…well everything.
All I ask is that you remember a few months ago when you were cursing the demise of this country’s infrastructure, when you couldn’t get paper products, or even masks, or even sugar and flour for a while; never mind a respirator to save your mother’s life. And remember how you promised that you would be willing to pay a little more to support our domestic industries? Well, that time has come.
Oh, and by the way this increase in prices might have been exacerbated by Covid, but it was already heading our way long before Covid. We have had this problem of not supporting our domestic infrastructure for years. Most of us did not realize it, or chose not to recognize it, until it hit us square in the head.
And one more thing. This phenomenon is global. Every country in the world is facing these global challenges that are causing prices to rise everywhere, no matter where you are in the world. So, when you sneak over to Walmart to buy that Blu Ray player for twenty nine dollars and ninety nine cents you are going to be shocked when you find out it now costs one hundred and twenty nine dollars and ninety nine cents to buy! Get used to it. It’s only common sense.