Analysis and Commentary

Onshoring is happening, but how extensive is it?

Analysis and Commentary

By Peter Roberts

The anecdotal evidence is out here – onshoring and reshoring of manufacturing to Australia is occurring.

The problem is, it is all but impossible to get a handle on how widespread it is, and whether it will really be significant in the long run.

We all know the reasons why some manufacturing is coming home – the Covid-19 pandemic showed how unreliable are extended global supply chains.

Some simply stopped working at the height of the pandemic, and even when they remained open the lesson has been learned by locals who have taken a cold, hard look at the knee-jerk solution to everyone’s problems of importing from low cost locations.

The latest piece of evidence comes from New Zealand where PCB prototyping and manufacturing company Circuit Labs has teamed up with Melbourne contract electronics manufacturer Alfatron to bring PCB fabrication back to Australia.

Circuit Labs managing director Richard Brady told @AuManufacturing: “This is huge news for Australia’s sovereign electronic manufacturing capabilities.

“It involves defence and the bones of Circuit labs and me operating on Australian soil.”

Dandenong-based Alfatron has announced on its website that PCB production will begin in the third quarter of 2021.

It has called for local manufacturers to fill our a brief survey to determine demand.

The PCB fabrication process is an essential element of the electronics production lifecycle, and some listings suggest there are as many as 26 companies capable of making boards already in Australia.

But few are capable of large scale production, and a number even have a split business model of prototyping and small production runs locally, with scale manufacturing in Asia.

The health of the sector poses an even bigger question about the focus of industry policy at a federal and state level, which is heavily focused on trendy fields such as defence, space, medical technologies and cyber.

Sure they are all exciting fields. But this focus on end-uses tends to overlook the essential building blocks of all these industries, arguably micro-electronics manufacturing such as PCB fabrication.

You can’t build a satellite if you can’t make a PCB and can’t make the computer chips that communicate and compute.

Perhaps in reshoring we should think more about encouraging the bedrock enabling technologies, and less about blue sky?

Picture: Alfatron

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