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Prudent companies will do their best to estimate costs before beginning a new design and planning a production run. When you’re planning to take a product to market, especially at high volume, electronics manufacturing costs become a major factor driving profitability. In order to reduce costs when necessary, it’s important for both designers and procurement teams to understand the factors that drive PCBA manufacturing costs.
What Goes Into PCBA Manufacturing Costs
PCBA manufacturing encompasses three areas: fabrication, assembly, and component costs. Developing a reasonably accurate manufacturing cost estimate requires understanding the major cost drivers in these three areas.
At a high level, it’s important to understand that different product grades, regulatory requirements, and capabilities needs will drive manufacturing costs in each of these areas. There are also inspection and testing needs required during manufacturing to ensure quality. Additionally some products require advanced components that can carry high costs.
PCB Fabrication
The costs involved in PCB fabrication can vary widely. For example, advanced HDI buildups on specialized materials will cost much more than simple low-layer PCB on low-Tg FR4. The major cost drivers for PCB fabrication are outlined below.
- Smallest linewidth: Smaller linewidths on the PCB require more precise photoimaging equipment and higher tooling/machine costs.
- Smallest line spacing: Same effect as linewidth
- Drilled hole size: Smaller drill bits will wear out faster and need to be replaced, which increases costs
- Substrate materials: Some materials (low-Dk/Df, high-Tg PTFE, ceramics, flex, etc.) cost more than low-Tg FR4; Higher layer counts drive higher costs; Hybrid builds could carry higher costs.
- Copper weight: Higher finished copper weight increases costs
- Plating: Some plating options are more expensive. Generally, immersion silver or platings that contain gold will carry higher costs.
- Specialized structures: Edge plating, cavities, castellation, and board cutouts can increase costs.
- Production location: Production in the US and Europe is typically more expensive than in Asia; China and Taiwan have advanced capabilities that can create higher costs for some boards.
The PCB fabrication cost drivers outlined above are priced on a per-panel basis, rather than a per-board basis. This per-panel cost should be used to build a cost estimate for volume production runs as you will be running through multiple panels. PCB fabrication houses in your desired production location can provide information on costs in each of the above areas. Note that smaller linewidths, smaller trace spacing, smaller drill holes, and specialty materials could move your design into a higher cost tier, and these points should be understood when beginning a new design.
PCB Assembly
The PCB assembly portion of electronics manufacturing typically includes placement, soldering, and inspection of finished PCBAs. Assembly houses or EMS companies offer different service levels, depending on which components are included in a PCBA and qualification needed for the final product. The major cost drivers in PCB assembly are outlined below.
- Unique BOM lines: More lines in the BOM means more reals are required during pick-and-place, which increases costs.
- Total placements: More placements increases costs, but at a lower rate compared to the number of unique BOM lines.
- Double-sided placement: Double-sided assembly requires an additional reflow pass, which increases costs.
- On-the-line testing: Typically in-circuit testing, which could be amortized over large production runs; Specialized tests like vibration, ESD, or industry standards qualification can carry higher per-board costs.
- PCBA inspection: Automated optical inspection (AOI) is typically included in assembly orders; If BGAs are being placed, additional costs might be required for X-ray inspection; Products requiring Class 3 qualification will need additional inspections.
- First article inspection: Can be added to a purchase order as a one-time cost.
Components
Component costs are obvious on the surface; estimates can be created by looking at distributor stocks. Some distributors will provide a BOM tool on their websites; users can upload a BOM and they will be able to see inventories and costs for a component order. Not all distributors offer this, so you may need to use a 3rd party supply chain service to generate an estimate from multiple distributors. In addition, if you are working with a broker, distributor websites often do not provide their pricing data, and you will have to contact the broker directly.
With all of these costs accounted for, it’s possible to build a per-board production cost. There are additional costs falling into the following categories:
- Shipping/freight costs
- Import tariffs
- Taxes on foreign-produced goods
- Time required to produce and ship from overseas
- Packaging costs
Collectively, these points contribute to landed costs for components and for the final cost of the finished product as it reaches the point of sale. A design team can only get a truly accurate manufacturing estimate for their product after accounting for these costs.
Tools for Cost Management
Larger EMS companies and OEMs, who are generally dealing with higher volume production, will typically have a supply chain team that manages procurement and orders through their CM services. These larger companies might also manage their data through integrations between suppliers, component distributors, and their ERP system. With a team of people and modern supply chain platforms, it’s easy for large companies to manage and minimize PCBA manufacturing costs, including logistics and procurement costs associated with components.
Smaller companies that haven’t grown to need a full ERP system can still access enterprise-level supply chain management capabilities with Cofactr. Come see how our online platform can help you manage inventory, components orders from distributors, and logistics costs.