In Part 1 of this column series, I introduced background information and data from changes in military certification to MIL-PRF-31032 from 2003 to 2018. In this column, I will provide an overview of six of the possible related factors to what could have caused the reduction in certified companies, including:
1. A decline in the total military market
2. The cost of certification
3. The number of military boards now built to industry standards (IPC-6012 & 6018)
4. A reduction of profit margin on military specification boards
5. Consolidation of the PWB industry
6. The general loss of US PWB manufacturing sites.
An in-depth analysis of these factors will be left to an expert in each market segment.
Figure 1: Annual military budget of the U.S (2003–December 2018, Billion$). (Source: Wikipedia)
1. Effect of the U.S. Military Spending and Associated PWB Market
U.S. military spending drives the total related PWB demand year to year. Furthermore, as the use of electronics grows in military hardware as it has done in automotive and everything else in our lives, the percent of that spending for PWBs rises even faster.
The military spending for the last 15 years (2003–2018) is shown in Figure 1. In those 15 years, it has increased by 36% from $563 billion to $766 billion. Obviously, this positive spending increase logically should have driven an increase in military-certified companies and not less.
Figure 2: While the overall PCB market has declined dramatically, the military market has continued to grow.
How does this U.S. defense spending increase translate to the total PWB market? On an annual basis, IPC collects and generates the past and present military-aerospace percent of the U.S. PWB market. Figure 2 represents this IPC data in 2003, and Figure 3 shows the same for 2017. In the 15 years since 2003, the percentage of the U.S. PWB market has increased from 12% (Figure 2) to 40% (Figure 3). The part of this 40% milaero market share that requires certification to MIL-PRF-31032, obviously, is a sector that is worth investigating if you are not already certified today.
Figure 3: U.S. vertical PCB markets by reporting companies 2017. (Source: IPC)
2. Effects of the Costs of Military Certification
What resources are required to be certified to MIL-PRF-31032? High costs could play a role in retaining certification or initiating this activity.
Having completed the initial certification for three different companies, I have a good understanding of the initial investment. This initial work consists of writing documentation (quality management plan), third-party testing, self-auditing, DLA site audit, and the resulting DLA corrective actions. This will require approximately six man-months using a resource with an experienced background in quality.
Third-party testing test costs depend on how many material types you are trying to certify. Most sites start with their two main types. Costs run to about $1,700 for each material type. The site self-audit, DLA audit, and audit corrective actions add another man-month. Assuming $5,000 per month, the total initial certification expense would be as follows: 7MM x $5,000/month + 2X $1,700 = $35,000 + $3400 = $38,400. Ongoing certification consists of third-party audits and DLA required reporting. This takes one-half the time of a full-time quality professional. Therefore, six months x $5,000/month represents an ongoing cost of $30,000 per year. Ongoing third-party testing for two materials is approximately $12,000 per year. The total ongoing cost of $42,000 per year ($30,000 + $12,000) is obviously something to consider, especially for a smaller company where it could prohibit initial and/or ongoing certification. Overall, since these entry and ongoing costs have not changed since 2003, they realistically did not affect the number of PWB companies certified to MIL-PRF-31032.
3. Effect of Military Product Requirements (Military Specifications or IPC Industry Standards)
When they think of PWBs built for the military, many people associate them all with military specifications. This is not a conclusion that should be assumed. Certainly, we have many military PWBs that require MIL-PRF-31032, MIL-PRF-55110, or MIL-PRF-50884; however, based on data collected over many years, many of them are built to IPC/industry standards.
With the magnitude and the ever-changing military contracts, it would be quite a challenge to determine what percentage require military specification requirements. From experience, the more the contract supports strategic U.S. defense, the more likely the fabrication requirements are pure military. Such contracts often require 100% of the boards to meet military specifications. The extent of boards that require MIL-PRF-31032, MIL-PRF-55110, or MIL-PRF-50884 is a critical factor of the analysis of certification investment, potential market share, and associated payback.
To read the full article, which appeared in the September 2019 issue of PCB007 Magazine, click here.