Get ready to uncover the intricate dynamics of the European PCB industry as we converse with industry leader, Thomas Michels of ILFA. Thomas provides an intimate look at the sector, highlighting challenges and opportunities, such as reshoring efforts and the fight to stay competitive in the global marketplace. We delve into the changing currents of customer tendencies, the role of the ZVEI in promoting the importance of the microelectronics ecosystem, and the pressing need for balanced government support and sustainability initiatives. We also learn about the recruitment obstacles in the industry and how companies like ILFA are overcoming this through apprenticeship schemes and internal growth opportunities.
Thomas also talks about digital transformation within manufacturing and shares his insights into the benefits of automation, ranging from enhanced efficiency to improved quality control and reduced human intervention. Thomas also voices the industry's concerns and needs in Berlin and Brussels, making him an inspiring figure within the community.
PCB@C-Level was generously hosted at productronica 2023 by Adeon technologies - learn more at https://www.adeon.nl
Like every episode of EMS@C-Level, this one was sponsored by global inspection leader Koh Young (https://www.kohyoung.com) and Adaptable Automation Specialist Launchpad.build (https://launchpad.build).
You can see video versions of all of the EMS@C-Level pods on our YouTube playlist.
Speaker 1:
Hello, I'm Philip Sotun. I am on the Adion Technologies booth here at Productronica 2023 and I'm joined by Thomas Michaels of Elfa. Thomas, great to talk to you. We've known each other for a long time. You're back running a PCB company again, BoldMove. How do you see the industry at the moment in Europe? What are the current pressures with respect to volumes? We're hearing of some reshoring in EMS. I'm not sure whether we're seeing it in PCB just yet.
Speaker 2:
We can see it recently, but right now we have challenges. On one hand, all the shops doing defense medical are really full, while the shops doing industrial applications have their issues due to the last couple years of COVID.
Speaker 1:
When you look at competing in the global marketplace, you've got to have a willingness on the part of the customer to want to short a supply chain, to want to buy in Europe. Do you see a shift in the way customers are thinking, or is it too early for that?
Speaker 2:
We saw a shift right after COVID, because everybody noticed that our supply chain is quite fragile Right now due to the necessity to fill the factories and getting the situation better. We see that some of the bigger guys go back to Asia just for price, while the defense people, the medical industry, they clearly shift towards Europe and commit to Europe.
Speaker 1:
Yeah, and I think that I see the criticality of certain supply chains as being at least perceived differently to others when you look at, perhaps, industrial and automotive and other sectors. You re-entered the printed circuit board industry after having the opportunity to retire and obviously that's been exciting, but you've also recently taken on yet another role within the ZVAL-IE to be their spokesperson on the political front.
Speaker 2:
Tell me a little bit about that and how that's going Well you know, what we have seen the last year is, everybody talked about chipsack, chipsack, chipsack, which is correct. It's good, it's important that we have leading edge technology in Europe and that we get a certain market share back, so to say. But I missed the discussion about the ecosystem microelectronics, and that's something you know. I'm more than 25 years at ZVAL-IE and I'm active at EIPC, at IPC, and we said we have to give the industry a voice. So that's what I now try to do with Sava Fainer from Solner, with other people, because we have to get awareness. We're going to publish a two-pager with some more information to the politics. I was in Berlin last week, I was a couple of times in Brussels and we now see a shift that they understand. Oh, there's more than just chips.
Speaker 1:
Yeah, that's really important and it will take time when you look at first that understanding. Once you've broken through there, what do you want governments to actually do? What's the action they can take that will secure the supply chain in Europe and, by default, the PCB industry?
Speaker 2:
We are not so keen to get a lot of subsidies. We would take them, obviously, but we are asking for a level playing field. We just have to have the same situation in all countries. We think we are very innovative, we are very creative, like me. We have a lot of companies in Europe where the owner is running the shop. We have a lot of medium-sized shops and we are all willing to expand. I expanded the last year significantly. We are going to double again within the next three years. We are willing to support the industry. If the industry supports us, the politics should just make sure that carbon footprint, for example, then energy Germany is the country, for example, but Europe in total, but Germany in particular, we have the highest cost on energy. We have three times higher cost than in America and PCB in particular is very energy-intensive.
Speaker 1:
Some of that is work that we absolutely need to do On the sustainability side, because I see that as a big benefit for having a shorter supply chain. Are customers talking to you more and more about that and are they looking for you to provide them with scope 2 and scope 3 data on your carbon footprint?
Speaker 2:
Yes, they do, and that's good and we hope it's more and more. We can see this. One big player now will start with a called Green Pass, so you have to provide certain data and it is really part of the evaluation. We hope to see this from more people in our industry.
Speaker 1:
They're going to have to pay a premium to do that. The other area which I think is interesting is the issue of talent. If we do have a manufacturer in Renaissance here in Europe and we're certainly seeing a bit of that within the EMS industry one of the challenges is to recruit enough people to grow. Do you see a better way of doing that and a better way of educating the potential employees, or do you see automation as being a solution to perhaps grow your business without growing your headcount?
Speaker 2:
I would think it is as well as In Germany we have apprenticeship systems. So in Germany our education is pretty good. So the people we can get usually have already a decent education In general. Of course it's not easy. So what we do, we grow the people in-house. So we have corporations with universities, we have corporations with other companies where we give people a chance apprenticeship, we give people a chance to educate themselves within ILFA and then we try to keep them.
Speaker 1:
I was going to say if you are constantly developing people and you are giving them not just opportunities but challenges, your retention should be much higher.
Speaker 2:
Yes, absolutely. We call it truly young talents and we have always 3-4% of our staff. We have young talents who don't grow into the company.
Speaker 1:
What about automation in the industry? Are there opportunities to digitally transform the manufacturing process, perhaps make the environment a little bit more pleasant and actually make the business more efficient and more competitive?
Speaker 2:
We can see this Talking about my company, but also from other companies in the PCB industry. We automate significantly, we start to use AI all of us. Germany is also helping us a little bit. We call it a digital transformation pact, where you can get some help from the government because it costs a lot of money, but we are convinced it pays back and it's not just about being more efficient, it's also about having a better quality, a more controlled quality.
Speaker 1:
And less human intervention. Generally, we have greater repeatability, which is good. Thomas, thanks for talking to me, thanks for being a voice here, but, more importantly, thanks for being the voice in Berlin and Brussels. The industry absolutely needs that and appreciates that. Thank you.