Every few years someone decides they must build “the American JLC.” Nearly all of them fail or whimper into obscurity for the same reasons. After dozens of conversations with PCB manufacturers, customers, industry professionals, and founders who attempted it themselves, I’ve come to a singular conclusion: don’t build the American JLC.
The following is a collection.
Don’t take venture capital, or if you do, don’t compete with simple or standard boards. Certain products, commodity goods as an example, are a terrible product to build a venture-capital backed business around. PCB boards, unless manufactured through some novel method or are of a unique formfactor (RF boards and many-layered boards as examples), are a commodity good. At the end of the day you must ask yourself “Is your product well-equipped for the type of capital you are utilizing?”
You need cash, a lot of it; and not venture cash. Venture capital isn’t well formed for commodity good based businesses. Estimates range from a scrappy $5MM to $12MM for just the most basic facilities and machinery, and even then you won’t be seeing returns - even on the machines alone - for many years.
Commodity based businesses only succeed when they can make something cheaper, faster, or of higher quality than their competition (or a few other things like volume, branding, smaller MOQ, etc. but these are all typically pretty aligned with the above three in this business). You will not beat China or even most American fabs on cost in PCB manufacturing. You will not beat either on quality, at least initially. This leaves speed, and the only way to compete on speed in commodity manufacturing is to grow slowly. You must be patient.
If you take venture capital you either need to be an engineering focused or a research focused startup. Engineering startups design products based on known physics (loose terminology) for an unproven customer base. Research startups design products in hopes they’ll find the physics along the way for customers they already know exist. For PCB manufacturing that means either inventing a fundamentally better manufacturing process or offering something that isn’t a commodity good or service in the first place.
“Location, location, location” applies to more than just real estate. Electricity cost, regional regulations, and even job markets, all affect the bottomline.
China is cheaper than us for bare board fab for many reasons, one of them being because they have lighter restrictions on the disposal of the toxic byproducts used in PCB manufacturing. In addition to this though are supply chain density, chemical supplier proximity, an extensive local equipment ecosystem to purchase from, having a trained workforce, massive government support, economies of scale, and decades of accumulated process knowledge. You must be ready to compete with them on all of these fronts simultaneously.