The arrival of a new stock exchange for Silicon Valley tech companies raises the profile of the tech industry’s best and brightest (and perhaps notorious) even more – as if that were possible.
It also is a significant reminder of what – or whom – is not represented in the public markets: the printed circuit sector.
Has it really been 20 years since the investment banks surrounded our industry, sniffing out hot new buys and running up hearty banking fees – along with tremendous amounts of debt – while encouraging players to buy or sell? Scale and exit strategies were the name of the game then. It made multimillionaires out of folks who only years earlier were pumping gas on the graveyard shifts.
Reality was bound to re-clutch those out-of-body experiences, and it did.
In the years since the Tech Crash of 2001, however, something approximating sanity has returned. If anything, perhaps the pendulum has swung too far the other direction. The number of publicly traded PCB-related companies has been trending down for years. Often, this has been due to merger activity. Valor was acquired by Mentor, which in turn was consumed by Siemens, which previously nabbed UGS Tecnomatix. Amphenol digested Teradyne’s PCB operations. TTM now owns the formerly public DDI, Coretec, Merix and Viasystems. Circuit World disappeared as part of a reverse merger with Firan Technology Group.
The ranks of the formerly standalone public firms also includes Park Electrochemical (now part of Asahi), Orbotech (KLA Tencor), Hadco, ESI and MFlex. MacDermid was public, went private, filed for IPO, withdrew it, was acquired, and is now merged with Alpha and Enthone under Element Solutions. On the assembly side, Adeptron, ACT Manufacturing, API Technologies, Chase EMS, Cirtran, CTS, Elecsys, EPIQ, Fittec, IPTE, LaBarge, MSL, Northstar, Pacific Insight, PartnerTech, Pemstar, SCI, Simclar, Solectron, Sparton, Suntron, and Winland were acquired. BTU was absorbed by Amtech. Beyonics went private. Kyzen basically did the same. Elcoteq and Texas Prototypes went bankrupt. Raven Industries and Probe Manufacturing changed their focus. The hands-down most dramatic exit belongs to Nam Tai, which went from $600 million to $1.15 billion in revenue in one year, only to bail from EMS to real estate less than 12 months later. (Seriously.)
On the plus side of the ledger, the pickings are slim. Foxconn spun out Zhen Ding back in 2011. Publicly traded Compass Holdings acquired Advanced Circuits. Ventec went public in Taiwan this year. Trackwise Designs did likewise in the UK. Shennan Circuits and Yowee Technologies are public on the Shenzhen Exchange, and OK Industries is now traded in Japan. And Dixon Technologies debuted on the India Exchange.
And in the mid-2000s, as Dover began selling off its electronics holdings, other conglomerates emerged to fill the void. Speedline (and its brands) and Kester were acquired by already public ITW. Nordson is doing the same with a host of brands, including Dage, YesTech, Dima and ACE.
This is not a comprehensive list. Instead, it’s designed to show how much the landscape has changed over the past 20 years.
We’ve argued in this space that being public has its disadvantages, and those arguments still hold. It’s expensive, especially in the US. It exposes all your warts to competitors. It adds pressures and a loss of control over one’s own destiny. (How many times did Mentor have to face down so-called activist investors?)
Yet the dearth of public companies has its downsides too. Being out of the public eye undermines our ability to ensure the home countries value how irreplaceable a dedicated, healthy electronics supply chain is to its security and well-being. It makes it more likely the supply chain is mischaracterized as manufacturers and distributors of commodities, instead of a unique group of suppliers building and selling products that are anything but drop-ins. It complicates understanding of the health of the sector.
I’m not suggesting the electronics supply chain rush to go public on the LTSE, the handle for the new Long-Term Stock Exchange. And as shown in our annual CIRCUITS ASSEMBLY Top 50, which starts on pg. 35, and the NTI-100, the largest EMS and PCB firms are almost all public. But it wouldn’t be a bad thing if a few more were as well.
P.S. Those interested in the technical side of the industry will want to take a long look at the program for this year’s PCB West trade show. We received a record 88 abstracts, representing the cutting edge of advanced component packages, flex design, noise control, and very high-speed design. And we welcome back leading speakers Rick Hartley, Eric Bogatin and Lee Ritchey. We’ve even added a fourth day to the conference to accommodate all the sessions. Visit pcbwest.com for details.