What’s the SCOOP – April 2022

Aside from the continued disruption to supply chains, what else is going on in the EMS industry as we enter Q2 of 2022? Here are a few of the headlines and stories the SCOOP team have been reading and writing recently.

• For me one of the biggest trends we are seeing in the industry is consolidation and the race for scale. For some companies this is the ‘raison d’etre’. Katek has grown from unknown to European top five and German top two with an ambitious acquisition strategy and last week they announced their plan to acquire SigmaPoint, one of Canada’s leading suppliers of high-value electronics manufacturing services. This expands KATEK’s presence in the industry to include Homeland Security & Defense and strengthens the offering for KATEK’s European customers in North America as well. This underlines not only the desire for scale, but also the importance of regionalization as global players look to shorten some of their outsourced supply chains.
• I recently wrote a piece on this topic for Fast Company exploring the “Three trends driving scale in manufacturing”. The trends in question are the ongoing supply chain crisis, the drive to regionalization and a seat at the negotiating table. I firmly believe that these trends will drive another bumper year of acquisitions.
• Underpinning that was the release of Manufacturing Market Insider’s annual report showing the a significant part of the 9.9% revenue growth of the EMS Top Fifty came from consolidation through deals that included LACROIX, which at the end of the year purchased Firstronic and grew by 62.8% and Creation Technologies, benefiting from its acquisition of IEC Technologies and growing by 58.3%. Also worth watching are some of the newer Asian players rocketing up the chart with significant growth like Orient Semiconductor Technologies (47.9%), BYD Electronics (35.5%), SMT Technologies (31.3%), and SIIX Corporation of Osaka, Japan (30.1%).
• I guess the significant warning and potential cloud on the horizon for the M&A market remains inflation. Take a look at Forbes Manufacturing Editor Amy Feldman’s and Lauren Debter’s article “How Bad Inflation Might Get, According To The Companies That Will Raise Prices”. It’s still much more expensive to get stuff to the U.S. from Asia a year after shipping costs first shot up. Fuel for concern, or fuel for more regionalization and great localized supply chain security?
• Meanwhile, intelligent disruptive business models continue to become more interesting and more relevant and SCOOP partner and Forbes contributor Marco Annunziata has been writing about several of them. Read “Why WAZP’s On-Demand Manufacturing Solutions Win Large Customers Like IKEA” for a real insight into an exciting way to manufacture on demand using additive technology for even the largest brands. And while we’re on 3D printing read Marco’s commentary on 3DP4ME in “Tech For Good – It Takes A (Tech-Savvy) Village”. 3DP4ME is an inspiring story of technology being used to solve real world problems and deliver life changing hearing aids to refugees. And lastly from Marco an update on the amazing and impressive success of Xometry in “A One-Stop, AI-Driven Manufacturing Marketplace”. Last December Xometry acquired Thomas, the company running the Thomasnet B2B (business-to-business) manufacturing platform with over 1.3 million users. Thomasnet’s customer base ranges from giants like General Electric to small business, and covers a range of fabrication techniques that complement Xometry’s traditional areas of strength in 3D printing, injection molding and die casting. Xometry also purchased assets of Big Blue Saw LLC, a company offering instant quoting for waterjet cutting and laser cutting, again complementing Xometry’s pre-existing offerings.
• Season Group President and CEO Carl Hung continues to write insightful columns in Forbes, with his latest “Four Reasons To Do A Redesign (And When You Might Choose Not To)”. To manage the current supply chain crunch affecting everyone’s lives right now and mitigate long lead times and component shortages, redesign services are becoming a hot topic in the electronics industry.
• Finally, I want to thank guests Indium’s Brian O’Leary and Zollner’s Michael Kollmer and host Eric Miscoll for a vibrant and informative episode of The EMS (Eric Miscoll Show) exploring the importance of EVs to the EMS industry. This is one exciting topic to follow and these two guests really have their fingers on the pulse. Take a look!!