Judy Warner (00:01) Hi, Shane. Thanks so much for joining us today. I'm excited to share you with our design engineering audience today. Shane Whiteside (00:07) Thank you, Judy. morning. It's great to be here. Judy Warner (00:11) Well, as you know, we've had a post-election ride that we're having right now. And I know that, you know, with your background, there's lots to talk about. Before we jump into that, don't you introduce yourself, tell us a little bit about your background and an overview of Summit Interconnect. Shane Whiteside (00:34) Sure, yeah. My name is Shane Whiteside. I'm currently the president and CEO of Summit Interconnect. We're the largest privately held printed circuit board manufacturer in North America with eight manufacturing sites in North America. I began my career in the printed circuit board industry working for a company called Shipley, which made proprietary chemicals for plating and oxides and things like that. worked in the manufacturing lab for a while, then went out into technical service and did installations of electrodes, copper lines and got into sales. I went to work for Shipley's distributed at the time, Technica got into selling equipment and solder mask, laminates, things of that nature. So kind of learn the full spectrum of the industry from the vendor side, touching all these products and installing all these products at our customers. at that time, a quickly growing market in North America. They're talking early 90s. So there's a lot of growth in North America. We got to the end of the 90s in North America was, you know, 25 % of total world output. And so it was a great time to really learn this industry because of all the growth. So I think just moving forward a couple of years, went to work for a inside manufacturing operation. Judy Warner (01:32) Mm-hmm. Shane Whiteside (01:56) a company called Power Circuits, which is now known as TTM Santa Ana. It was there when we founded TTM, and spent several years with TTM. Latest role was Chief Operating Officer there for over 10 years. So from TTM, took a bit of a break, did a few things outside the industry and decided my passion was really printed circuit boards. So 2016, we founded Summit Interconnect and we've been going... for last eight years, you know, just growing through organic growth, organic levers, and also through acquisition, acquiring companies along the way. that's kind of, that brings us to the present. Judy Warner (02:38) Well, it's been fun for me to sort of watch you from afar and see that ride. I remember very clearly when you bought the first two plants in Orange County and really the vision that you and your team had for being a really world-class top tier PCB supplier. at that time it had really, I mean, the, as you mentioned, really our industry had been decimated because of Asia and geopolitical reasons, but you really needed another strong contender besides TTM in the US to meet the needs of the industry. And you guys came out with guns a blazing to fill that spot. And it's been really fun to watch what you've been able to do. So Sean, I thought it would be interesting for our audience. especially given your background and all the aspects you've seen of the PCB industry and how vital it is for our audience of design engineers to talk about the state of the PCB design industry or the PCB manufacturing industry. So why don't you tell us a little bit about sort of where we've been in 2024 post-election, where we're headed into 2025. Shane Whiteside (03:59) Yeah, sure. First, let's kind of reflect back a little bit on the journey that the North American industry has taken. I mentioned, you know, late in the 1990s, were 25 % global output. PCB manufacturing in North America was a $10 billion manufacturing industry just in North America by the end of 2000. 24 years later, we're a third of that scale. At the same time, the global market has almost doubled. So we're now about 4 % of world output. And I think the decline in the market or market share is expressed in dollar terms. But I would say if we're a third of the size that we were in 2000 in North America, just in terms of square footage, we're down even more than that. because that was the former's measured on a dollar basis. the number of large factories in North America, so I think of factories that produce more than 500, 600 panels per day, you could probably count them on one hand, if not, maybe need two hands. And that should alarm everyone because we really lost a lot of manufacturing capacity here in North America. I think we've... Judy Warner (05:05) Mm-hmm. Shane Whiteside (05:15) stood up the Prince Circuit Board Association of America about three and a half years ago. We had five founding members when we started the association. We now have over 60 members. And what we're really trying to do is sensitize Capitol Hill, the White House, and the Pentagon to the urgent need to stabilize and get our industry growing again. So we could talk a little bit more about that. I might have more questions there. Judy Warner (05:43) I do. There's lots to unpack there, but there's been this year more than ever so much sword rattling and as it, as it, I just lost my word. Let me just redo that. Yeah, there's a lot to impact there, Shane. And there's been a lot of sword rattling at the political level, especially over this past year. And from a bipartisan standpoint, it seems like there's been a lot of support to sort of onshore reshore, but from a pragmatic level, we know that labor costs were never going to be able to compete exactly. we'll get into that PCBAA piece in ways that we might engage the US government. And you've certainly been spearheading those efforts. But as we look ahead at 2025, from your position as both CEO, as industry veteran, and from Capitol Hill, what are the challenges and the opportunities you see ahead for the industry? Shane Whiteside (06:54) Well, I think the challenges are to start there, continuing to operate our businesses with, you know, persistently shrinking global market. IPC statistics tell us that the market's down 7 % year to date September. And then last year in 2023, we were down 6 % sequentially. So. So, you know, it's always difficult to manage businesses in a challenging market. But in terms of the opportunities, we think that, you know, growth does lie ahead. It tends to be cyclic in our industry. And I think most insight tells us that 2025 will be a much better year. Just in terms of opportunities that we have where we can work with government, we... We'll continue the great work we're doing at PCBAA. We introduce legislation now into successive congresses to provide direct investment funds for the PCB industry and also to provide tax credit for purchases of U.S. produced PCBs. So right now the immediate opportunity is for us to get involved with Ways and Means Committee in the House right now as they put together the incoming president's first 100 days tax package. there's an opportunity for that tax credit to actually be codified in the first 100 days tax package. So that's what we're doing. I'm flying to Washington DC next week to directly lobby members of Congress that are on that committee to try to get that done. Judy Warner (08:27) I want to take a step back here for just one second, Shane, to maybe for those that have a blind spot there. When it comes to design engineers, you and I have been around the block for a while, but what are the risks to design engineers if we don't strengthen and secure our supply chains, both of chips and boards here in the US? Shane Whiteside (08:52) Yeah, well, think, you know, I think if COVID taught us anything, it's about, you know, the vulnerabilities that exist if you don't have a resilient and sort of diversified supply chain, have many suppliers in different areas, particularly geographical areas to get your work done. We work with a lot of designers because we do a lot of prototyping in both commercial and aerospace and defense. And, you know, we work very closely with them. early stage to do things, starting even from material selection, helping with design rules to enhance resiliency of the boards. Let me back up on that, we pause on that and try to read that again. We work with designers also to do things from material selection to... Judy Warner (09:37) Okay. Shane Whiteside (09:48) you know, design rules to enhance the thermal robustness and ruggedization of their boards. So pause there again. I don't know why. Okay. Judy Warner (09:57) Okay, wait, I wanna rephrase too. Let's do this differently because I'm meandering also. I'm gonna rephrase my question about design engineers and this is where we're gonna talk about why they should care. And here's where I think you can lean into. You guys are the rock star of mission critical PCBs. And so I think we should impact that and talk about the risks. Shane Whiteside (10:21) Okay. Judy Warner (10:27) and then we'll spin that into. you know, that driving, because you're aware of that, that driving you into that space, I'll ask you a follow-on question about what are the key challenges, and then we'll talk about the material. But just in this first little part, let's just talk about the blind spots that design engineers like, if we lost our supply chain in US, what are those risks? And just, you know, I want to throw a little water on their face for those that... don't know it because there's a lot that don't. You're around people who do, but there's a lot in this audience that don't. So we need to sort of give them a little bit of a wake up call to what, you know, what a non resilient and non secure supply chain, how that will affect their work. Okay. All right. So let me ask it again and then I'll follow on where you can lean into how you closely work with engineers. Okay. Shane Whiteside (11:23) Mm-hmm. Okay. Judy Warner (11:34) So Shane, you work closely with design engineers, but for our audience, I think it's important to talk about maybe what are some of the blind spots or the ways that it could really hurt design engineers if we don't really shore up and strengthen our supply chain here in the US. Shane Whiteside (11:58) Yeah, sure. I think it, you know, if COVID taught us anything, it pointed out the weaknesses that we have in a globally dispersed supply chain where we're principally relying on foreign manufacturers for our essential goods and services. I think if we... COVID has settled down, but if you read the news, keep track of what's going on. There's a lot of geopolitical tension out there right now. And we're one, in some cases, one conflict away from being even more disrupted. Because at least during COVID, everybody was trying to manufacture and trying to ship. They just had some headwinds. If there's any sort of a conflict out there, that may just come to an abrupt stop altogether. So I think designers need to take that into consideration. consideration as they develop their supply chains and having a good set of US-based suppliers in addition to your low-cost region suppliers should be the objective, I think, for every design engineer. Judy Warner (13:02) Yeah, I share your concern that sometimes I'm not sure that design engineers understand how frail a position we're in and how much it will impact them. But like you said, I think COVID was a big wake up for all of us. And I'm glad to see that we're moving in a more positive direction. On another note, Shane, because I am familiar with Summit and many people on your team I have a long history with. And so what are some of the ways that you're seeing design engineers being challenged today and how do you as an organization lean into that? Shane Whiteside (13:44) Hmm. Well, I think the challenge is I don't want to speak for designers because they know better than I do, but it, you know, increasing pin density component densities and things of that nature and having to pin that out that drives, you know, geometrical challenges at the board level, you know, from the design workstation. And then as we have to manufacture those at the the PCB level in our manufacturing operations, that's that's a continuing challenge. But also as circuit density increases, feature size decrease and things of that nature, there can be a trade off and reliable. reliability, lifetime reliability, reliability through assembly operations. I know our field applications engineers at Summit spend a lot of time with designers, know, kind of educating them on everything from material selection to also how to, know, good best design practices for not only, you know, survival and reliability and assembling, but also for life cycle reliability. So we were an early adopter of what's known as the coupon test which is an IPC test method. We have several machines throughout our manufacturing operations and we do a tremendous amount of that sort of testing as well. And so we kind of, we blend that all together where when we interface with the designers, we take all that incredible amount of knowledge that we have in manufacturing, material selection, best practices in design, and we really try to educate our designer customers with that knowledge. Judy Warner (15:14) Well, I know that I've tapped into folks to educate me and I really appreciate it because of the amount of knowledge and tenure of your team. So as far as opportunities, let's lean into your point about PCBAA, which is the Printed Circuit Board Association of America. And recently I interviewed the executive director, David Schild, and got some insights there. What? Inspired you, you're a busy guy. What inspired you to become the chair of this organization when you already have such a full plate? Shane Whiteside (15:54) Yeah, well, I'm very pleased to be able to serve as chair. think we stood up the association about three and a half years ago with five members. Summit was one of the founding members. And Travis Kelly, the CEO of Isola, was our first chair for PCBA. And Travis just did an outstanding job over three years, growing our membership from the original five to over 60, getting legislation drafted and introduced into successive Congresses. What's currently known as HR 3249 that I spoke about a little bit earlier? So, you know Travis I guess the opportunity came along for a new chairman to step in Travis turned out so They asked me if I would be willing to you know serve as chairman of the Association and just coming off 17 years of the IPC board Where I held, you know as a director of the board for a long time and most recently chairman for two Judy Warner (16:29) Mm-hmm. Shane Whiteside (16:53) years. So I had a little bit of free time to give back to the industry and that's something that I've tried to do. This has been a very gratifying career and I'm very passionate about our industry and I'm always looking for ways to give back. the timing was good so I stepped into this role earlier this year and as I said I'm going to Washington DC next week to lobby with members of Congress and try to get you know our tax provision in the first 100 days tax bill. Judy Warner (17:24) Well, let's drill into that a little bit because I just saw some information online and I think also David and I touched on it is that the tax credit part of this bill, why don't you talk about what that tax credit is, why it's important to again, our audience and why this first hundred days and you know, how that all rolls up together. Shane Whiteside (17:50) Sure. So what we're proposing is a 25 % tax credit for U.S. produced printed circuit boards purchased by U.S. based companies. So any purchaser or circuit board, if you purchase it from a U.S. manufacturer, you can get a 25 % tax credit. And that's what we've proposed. That's been on the table in two successive Congresses in house bills that were put in or that were introduced. And with the current house bill, H.R. 3249, we have 15 co-sponsors and it's you know both sides of the aisle Republican Democrat so we have a lot of support from very senior members of Congress to get this 25 % tax credit implemented into into regulation. Right now though, with the change in administration, a new president coming in and his pledge to do tax reform within the first 100 days, there's an opportunity for us to take that specific piece out of 3249 and make that part of the overall more comprehensive tax package that's being worked on right now. So a lot of urgency because we only have 100 days to do it. So that's why we're all just kind of short notice, book and travel to get into Washington DC next week. Did I? It's your full question there. I think I did. Judy Warner (19:03) Well. Yep, you did. Well, that 25 % would make an incredible difference, like I said, to level the playing field that hasn't been leveled for a long time because we can't compete with particularly labor charges, right, with Asia and... Shane Whiteside (19:21) Yeah, there's a lot of reasons that we can't compete. We make great printed circuit boards here in the United States, but you know, it's not just labor costs. It's the regulatory framework and low cost regions. It's the amount of assistance that companies get from government. Some of it, you know, it's not the kind of assistance you could get in the Western world. But you know, there's a lot of advantages that our competitors in low-cost regions have and so this bill is 25 % tax credit is going to help tilt that scale back a little bit to make it you know easier for our customers to you know do business with with us here in the United States Just just in terms of tilting that balance back a little bit Judy Warner (20:05) Well, and I know there's lots of engineers that would, if they could, or their buyers could, they'd rather do business here, even if it were close cost-wise, but it's out of the question otherwise. So I think this is an exciting first step anyways, like you said, it's far more complex than that. anyways, we haven't had anything like this on the table for quite a while until... the things that you and the team have done at PCBAA. And again, you know, I came up the industry, I actually started a little earlier than you, but it's a relatively small industry and you appreciate that it's difficult and it's a bunch of great people doing important work. I just from a personal standpoint, really appreciate all that you're doing and I'm a big fan. Shane Whiteside (20:34) Yeah. Judy Warner (21:01) a kind of off topic question, but I'm in the middle of doing a podcast series on the AI design engineering revolution is what I'm calling it and how AI may affect us. And so while we're talking about the state of the PCB industry, are there any ways that you think AI or LLMs or machine learning are going to have an impact on the industry over the next year or so? Shane Whiteside (21:28) I think just in manufacturing operations where we're trying to employ different tools and methods and some of them are sort of maybe a little bit assisted by AI, but it's really in. managing our factories, schedule management with increasing complexity, increasing number of lamination drilling, plating cycles, things like that. So that's more of a, you know, a software and high performance computing kind of driven approach. But there's some AI that we can leverage at the fringes there. But that's kind of how we're first looking at it deployed in manufacturing operations. I would think with designers, it would be probably a much more robust tool to assist them in what they're Judy Warner (21:55) Mm-hmm. Shane Whiteside (22:10) doing on their workstations. Judy Warner (22:12) Yeah, for sure. It's a software tool, but again, from machine learning or data analytics, you know, there's opportunities. So was just curious how that impacted, you know, all the plants that you manage and ways that that also might be beneficial to productivity and things you can do. So that's really interesting. Well, Shane, I know you're busy and I've got to let you go, but is there anything else you'd like to share with our audience? that I haven't asked you about as you look ahead and what you see coming for the next year. Shane Whiteside (22:48) Sure, just again, I'd just like to go back and point to PCBAA and encourage all of your listeners to consider joining. You know, we're up north of 60 members now, so if you design, you procure, you manufacture, or you build PCBAA, build upon PCBs, please consider joining our association because the more companies we have, you know, the more credibility that we have when we go. try to do our work on Capitol Hill. If we can get from 60 members to north of 200 members, that speaks volumes, just in terms of our credibility that we have in being a voice of our industry. But I think that's it. I really enjoyed the opportunity to talk with you here today, and it's good to see you again. Judy Warner (23:33) Yeah, it's great to see you again and get an update. Well, I want to echo and also say to our audience that it's important to know that this association, you can be an individual member or your company can be a member. And it's not just PCB manufacturing, right? So OEMs can join and like anything, you you get more districts, more representation of the population. In a democracy, that means a louder voice and more power. So I joined as an individual member. And so I put my money where my mouth is because it is a great industry and it's one we know that as our audience you use and you need. And I hope you've enjoyed this conversation. Shane, thanks again for joining us today. I hope you or some of your colleagues will come back next year and keep us updated on the state of the PCB industry. Shane Whiteside (24:30) Yes, we look forward to that. So thank you, Judy. Judy Warner (24:34) Thank you. For our audience, thanks so much for joining us today. I hope you've enjoyed this sort of insider perspective on the state of the PCB industry. We will see you next week. Make sure you go check out the show notes. I'll put links to PCBAA and Summit Interconnect and other things that'll be helpful to you. We'll see you next week. Until then, remember to always stay connected to the ecosystem. Music in, bing bang boom.