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Ford Motor Company announced another production delay Thursday related to a crippling shortage in semiconductor chips. Calumet Electronics, currently undergoing a planned expansion, operates in a related space, but has so far been unaffected by supply constraints. Chief Operating Officer Todd Brassard says that his company produces printed circuit boards, a complementary piece. If the company’s clients in the defense sector or the medical industry start to get pinched by a lack of chips, that’s the only way Brassard expects the problem to spillover to the circuit board space.
Because personal electronics from laptops to tablets and smartphones are manufactured in Asia, a vast majority of the world’s chip production is located there as well. The economies of scale that have developed are a huge competitive advantage for companies in China, Taiwan, even Korea and Japan. That has filtered through to other areas of high-tech manufacturing. America has lost 80 percent of its printed circuit board capacity this century, and what is left is quickly becoming obsolete.
Calumet Electronics has been able to make investments into its capabilities to stay relevant and competitive. Brassard says there is increasing concern among the military and defense industry companies over relying on foreign parts in equipment used during war time. The COVID-19 pandemic has exposed shortcomings in medical technology and pharmaceutical manufacturing. Now Michigan legislators are pushing in a bipartisan fashion to bring back semiconductor capacity to the country, so the auto industry and others are not held hostage to supply constraints elsewhere. It is all part of a push to maintain essential manufacturing abilities domestically.
Brassard says that surviving the contraction of the past two decades took a lot of trial and error at the development level. It also required Calumet Electronics to become more vocal in Washington, D.C. With lawmakers beginning to understand the dangers of concentrated overseas production in the industry, that could open up new possibilities in the future.
