EMS@C-LEVEL
As Forbes, Entrepreneur, Fast Company and SCOOP writer, Philip Stoten, continues to talk to EMS (Electronic Manufacturing Services) executives he learns more about their individual and collective experiences and their expectations for their own businesses and for the entire electronic manufacturing industry.
EMS@C-LEVEL
Electronica 24: Estonia's Electronics Industry Amid Global Challenges with Arno Kolk
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Join me for an insightful conversation with Arno Kolk from the Estonian Electronics Industry Association, who sheds light on Estonia's pivotal role in the European electronics manufacturing landscape amidst a world of rising geopolitical tensions and protectionism. Explore how Estonia, despite its geographic proximity to Russia, remains steadfastly oriented towards Western markets, offering a reliable manufacturing partnership for Western Europe. Arno addresses the modest decline in industry growth following a boom year, while highlighting the encouraging upward trajectory witnessed as 2024 year progresses. This episode promises a deep dive into the strategic dynamics of Estonia's electronics sector and its resilience in the face of global challenges.
Discover the key investments Estonia is making in technology and sustainability, keeping its electronics industry competitive amidst increasing labor costs and the growing demand for eco-friendly practices from Northern European customers. Arno discusses the critical role of automation, emphasizing advancements such as cobots and selective soldering machines that are not only cost-efficient but also align with the industry's sustainability goals.
Learn about the essential shift toward green initiatives that is reshaping Eastern European manufacturing, as Estonia positions itself at the forefront of innovation. This episode is a compelling exploration of how technological advancement and sustainability are interwoven with the future of manufacturing in Estonia and beyond.
EMS@C-Level at electronica 2024 was hosted by IPC (https://www.ipc.org/)
EMS@C-Level is hosted by global inspection leaders Koh Young (https://www.kohyoung.com) and Global Electronics Association (https://www.electronics.org)
You can see video versions of all of the EMS@C-Level pods on our YouTube playlist.
Hello, I'm Philip Stoughton. I am here at Electronica 2024 and I'm joined by Arno Kolk from Estonia, the Estonian Trade Association for Electronics.
Speaker 2Yes, we are from Estonian Electronics Industry Association.
Speaker 1So tell me a bit about. I mean? We're in a world of increasing protectionism, increasing geopolitical unrest. The importance of having good neighbors for Western Europe that can manufacture competitively is becoming even greater. Where is Estonia sitting at the moment in terms of the performance of the industry and?
Speaker 2its trading partners. Well, I mean, we are part of Europe so, of course, all European trends and all the global trends they affect us as everybody else.
Speaker 2So we see an increase in RFQs. People want to really bring production back from wherever it is to Europe. We also see an increasing number here at the exhibition A lot of Chinese distributors are trying to sell their components. Yeah, we are located next to Russia, but for our electronics industry Russia has never been a really big market and neither has it been a really supply base so we've been always selling to the west mostly always looking to the west absolutely. We've seen the industry challenge this year?
Speaker 1selling to the West, Always looking to the West? Yes, Absolutely. And what about the? You know we've seen the industry challenge this year in Europe. Typically, we're looking at 15 plus percent decrease on last year. How does that look for Estonia? Is it basically the same trend?
Speaker 2Well, very slight decrease compared to the last year, although not very big. Of course, 2022, especially, was an excellent year. It was a boom year. 2003 was slightly slower this year. The summer was quiet let's say July was quiet but it's been picking up ever since, looking good at the end of the year. Of course, prices have also changed. They were higher at some point going back to normal, so it's difficult to compare really.
Speaker 1Apple to Apple, yeah absolutely. If you look at turnover in terms of revenue, it's one thing, but if you look at turnover in terms of volume, it's quite something different, isn't it?
Speaker 2It is absolutely yes. Statistics is usually done with some fixed prices. Ten years ago. That shows one number and then the company books you other numbers. Yeah, no, absolutely.
Speaker 1I completely get it and I completely understand that Estonia still remains competitive. It's a good trading partner, particularly for Germany. Are you seeing new investments coming into the country, in terms of not just capacity but also capability?
Speaker 2technology yes, well, since the capacity is, we still have capacity available at the moment because over the last few years most factories have extra capacity, so they are not investing much there, but they do invest in technologies For several reasons. The labor cost has been going up, so it makes sense to automate many things which were not reasonable to do before.
Speaker 2Second, a lot of technologies have become cheaper. The cobots, they are pretty cheap nowadays affordable. Some x-ray equipment, some other stuff. Selective soldering is very popular, so the last traces of hand soldering have been replaced with selective soldering machines. So these kind of things. And of course there is also renewal, because machines they get old. The new ones are more capable, they consume less power. So there is this green part of it as well to be more efficient, to be more environmentally sustainable. So these investments continue all the time.
Speaker 1Is the sustainability side an important factor in Estonia? Is it something that is considered to be a key to the future of the industry?
Speaker 2Absolutely yes, because customers demand it. We have lots of customers in Northern Europe, scandinavia and they are very strict on those things, but also elsewhere.
Speaker 1This is really becoming a demand and we are trying to turn it into a competitive edge that we really do it, not because it's fancy or something, but because it's a trend, but because it's the right thing to do?
Speaker 2Yes, absolutely, it's the right thing to do and it also can help to increase competitiveness.
Speaker 1Yeah, absolutely, and I think when you look at Eastern Europe particularly, the door was definitely open with low-cost labor. But to keep that door open and keep trade flowing, there needs to be investment in automation, there needs to be investment in sustainability and those other factors becoming increasingly important. Absolutely, yeah. Thank you so much for your time. I'm glad to hear things are continuing to move in the right direction.
Speaker 2I look forward to another event in Tallinn.
Speaker 1There are always such first-class events.
Speaker 2Thank you, we will have the next year EMS and Beyond seminar on the 5th of December 9.25. Everybody is welcome. Yeah, that's a good time. I think Productronica is a little bit later We'll maybe get to spend a week in between at the Christmas markets, and then we'll come see you guys in Estonia. Thank you so much. Thank you for inviting me.
Speaker 1Thank you,