Pricing of Production Quantity PCBs and Assembly (USA vs China)

[SMTech]

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.

What machines and ballpark figure do mean?

Pretty 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.

[olkipukki]

  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.

That'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...

[SMTech]

  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.

That'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...

I'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.

[tszaboo]

  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.

That'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...

I'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.

I 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.

[Mangozac]

I 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.

That'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.

[SVFeingold]

"Pure" CM work just isn't feasible unless you have a modern, high speed, highly automated setup that facilitates rapid changeover.

Not 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 and then I'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. 

[Mangozac]

It really depends on what segment you're trying to serve.

Yes, 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.

[SVFeingold]

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.

[Mangozac]

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.

I definitely agree with you there! In 6 months we've gone from zero experience to confidently running our SMT line in many 1k batches.

[tszaboo]

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. 

That 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.

[olkipukki]

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).

If 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?

[SVFeingold]

That 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.

It 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.

If 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?

Because 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.

[tszaboo]

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:

On 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.

[SVFeingold]

Tell me, that the factory you mentioned ever would say for any project, that their setup costs are below 500 USD.

Doubtful!

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.