<html><body><div style="color:#000; background-color:#fff; font-family:HelveticaNeue, Helvetica Neue, Helvetica, Arial, Lucida Grande, sans-serif;font-size:12pt"><div id="yiv6309186653" class="" style=""><div class="" style=""><div style="background-color: rgb(255, 255, 255);" class=""><div id="yiv6309186653" class="" style=""><div class="" style=""><div class="" style="background-color: rgb(255, 255, 255);"><div class="" id="yiv6309186653yui_3_16_0_11_1402500911782_7" style="display: block;"><div class="" style=""><div class="" style=""><div class="" id="yiv6309186653yqt78101" style=""><div class="" id="yiv6309186653yqt91791" style=""><div class="" style=""><div class="" style="">Adam,</div><div class="" style=""><br style=""></div><div class="" style="">Having worked 10 years in Board Assembly as an Engineer where I ended my career in that business quoting assemblies in a technical sales role, I would like to explain this topic a little more
accurately. I have not been in this business in over 10 years, but other than things getting better and more cost effective, it is doubtful much has changed. </div><div class="" style=""><br class="" style=""></div><div class="" style="">PCB manufacture can be boiled down to two major factors. Non-Recurring Engineering (NRE) and cost per square inch of the board. This may seem like an over simplification, but it is not. I will outline the details of the two below and that is where it gets complicated.</div><div class="" style=""><br class="" style=""></div><div class="" style="">NRE</div><div class="" style=""><br class="" style=""></div><div class="" style="">This is the cost that the manufacturer requires to put the board through their shop. NRE can vary greatly. Soft or hard tooling can make a big difference. Hard tooling allows you to build more boards with the tool than soft tooling. This will bring down your cost per board if the volume
justifies it. Manufacture characteristics limits how cheap their tooling can be. In other words you can reduce this cost only so much before it is limited by their process. This is one of the reasons why board shops can vary widely on cost based on volume. </div><div class="" style=""><br class="" style=""></div><div class="" style="">It consists of the following:</div><div class="" style=""><br class="" style=""></div><div class="" style="">* Tooling required to run board in their machines</div><div class="" style="">* Engineering time/cost to create the programs/tools needed for manufacture</div><div class="" style="">* General Fudge factor, usually for profit</div><div class="" style=""><br class="" style=""></div><div class="" style="">Price per Square inch</div><div class="" style=""><br class="" style=""></div><div class="" style="">All board manufacturers calculate this number to tailor it to their process. They will give you this number off
the top of their head and that is usually the highest of their capability. It truthfully depends on how your board is #panelized to optimize their machines. If your board is too big, panelization will waste material. Although this problem goes away as the board gets smaller, because you generally can panelize a small board well. </div><div class="" style=""><br class="" style=""></div><div class="" style=""># Panelized boards are boards ganged together in larger standardized panels to be cut apart later. The shop will have different standardized panel sizes, but it is based on their machines.</div><div class="" style=""><br class="" style=""></div><div class="" style="">This cost consists of the following:</div><div class="" style=""><br class="" style=""></div><div class="" style="">* Material</div><div class="" style="">* Labor </div><div class="" style="">* Machine time</div><div class="" style=""><br class="" style=""></div><div class=""
style="">Summary</div><div class="" style=""><br class="" style=""></div><div class="" style="">There really is no way around these costs structures, although the really fast turn around folks are dropping their NRE with tooling that is rock bottom and that is why we see some of these fast turn around folks able to survive. Keep in mind that their tooling is not meant to last at all. This is great for the market, becasue it allows peole like us to get boards for reasonable costs, becasue the traditional PCB shops would price us out with NRE. They are not trying to screw you, it is just the nature of their process that limits the bigger manufacturers to helping the small runs.</div><div class="" style=""><br class="" style=""></div><div class="" style="">The pricing with NRE built into the board looks like this</div><div class="" style=""><br class="" style=""></div><div class="" style="">price per board = NRE/(Board Volume) + (Total standard panel
square inches)*(price per square inch)/(Board Volume) + (Misc costs)/(Board Volume)</div><div class="" style=""><br class="" style=""></div><div class="" style="">An alternative pricing method that is hardly used is to charge NRE as a lump sum and price just the board manufature. Often we included the quote this way becasue it shows the customer the breakdown of the cost and it will show the customer why low volumes are expensive. Incidently this is a common way plastic molding is priced where tooling is very expensive.</div><div class="" style=""><br class="" style=""></div><div class="" style="">What this means to TriEmbed?</div><div class="" style=""><br class="" style=""></div><div class="" style="">Probably not a whole lot. It is doubtful most of us will reach the volume that matters. Just in case, I wanted those interested to be aware of how it works. For the most part you will be given some minmum build Sq. In. and a price. </div><div
class="" style=""><br class="" style=""></div><div class="" style="">One thing I do want to point out and if you have made it this far without falling asleep, then hopefully this helps.</div><div class="" style="">The reason electronics has gotten so cheap is that the reduction in raw materials of Surface Mount (SMT) is significant. It will not take you long to start shopping around to find out that SMT gets your cost down greatly. The only case this fails is in Hobbyland where SMT can cause more scrap in assembly than you save. Many of you out there have already felt that pain.</div><div class="" style=""><br class="" style=""></div><div class="" style="">So if you are serious about a product, finding the breakpoint of cost saving and volume is not trivial and I wish you luck in your endeavor. Please keep us updated on your success.</div><div class="" style=""><br class="" style=""></div><div class="" style="">Thanks,</div><div class="" style=""><br
class="" style=""></div><div class="" style="">John Vaughters</div><div class="" style=""><br class="" style=""></div><div class="" style=""><br class="" style=""></div><div class="" style=""><br class="" style=""></div><div class="" style="color: rgb(0, 0, 0); font-family: HelveticaNeue, 'Helvetica Neue', Helvetica, Arial, 'Lucida Grande', sans-serif; font-size: 12pt;"><br class="" style=""></div></div></div></div></div></div></div></div></div></div></div></div></div></div></body></html>