With the majority of today’s consumer electronics being supplied from Asia, primarily through contract manufacturers which utilize a very high level of manual assembly labor, there is an increasing trend towards automation.

For example, as Chinese labor rates continue to escalate, in an instant replay of the Japan scenario of the 70s and 80s, more offshoring is being transferred to lower cost labor markets in Southeast Asia, particularly India, Malaysia, Indonesia and Vietnam. However, as these countries also seek experience a similar increase in labor cost, the need for higher level automation and use of collaborative robots will accelerate.

Additionally, in a further and somewhat ironic twist, “reshoring” to the US is now a strong possibility due our high levels of automation. This is evidenced by the recent announcement of a major facility of Foxconn, planned for location in southeastern Wisconsin and an additional facility in the Michigan yet to be selected. Of particular note, Foxconn and five other contract manufacturers supply more than 60% of the electronics market and work closely with key device producers (Samsung, Apple, Huawei, and LG) to innovate their production needs.

In response to this trend, our company and several others have established technical centers to work closely with Silicon Valley innovators. The Siemens Silicon Technical Center will deliver programs to provide proof of concept validation and fully leverage the automation and digitalization tools offered by our company, including the Mechatronic Concept Designer, which allows the creation of a “digital twin” to pre-test manufacturing scenarios in the virtual world. In cooperation with our Siemens PL Electronics team, our partners will benefit from the increased value add through virtualization and simulation. Coupled with strong application engineering and support teams, such approaches today enable full simulation of a manufacturing and materials handling flow, before the first machine frame is formed. As a result, new concepts are pioneered and, more importantly, proven out with full repeatability and faster return on investment.

As the end user today is seeking a complete machine solution, including full line integration for brownfield installations, cybersecurity, networking of the entire process chain, including legacy equipment, plus increased data analytics - strong partnerships with key system integrators is critical. To support this partnership, Siemens offers its cloud-based Mindsphere program, where a global install base of machinery and equipment can be monitored for performance, process validation, comparable machine metrics and predictive maintenance information gathering.

Siemens is uniquely positioned to meet the market trend toward digitalization at all levels of the digital transformation process. The end customer expectation is that a supplier must bring their customers a complete spectrum of digital factory equipment, software and communications strategies, plus use all such technologies in their own manufacturing. In our case, the Siemens factories in Amberg, Germany and Chenzhou, China are prime examples where the manufacturing of PLCs, printed circuit boards and surface mount technologies combines the real and virtual worlds. Products communicate with machines and all production processes are optimally integrated and controlled via IT. These facilities have both been recognized for their high efficiency, productivity and quality standards.

With mandatory high production rates, low-to-no tolerance for poor quality (Amberg production quality on an annual output of 12 million PLCs has achieved 99.99885%) and the increasing cost of raw materials, a maximum level of data analytics with KPI priorities is essential.

Further, it is expected that the increasing demand for battery solutions, coupled with the declining acceptance of shipping such products from Asia, especially China, will mean more “localized manufacturing” will occur using the same electronics OEMs. New factories, such as the Tesla Gigafactory, will become the rule rather than the exception.

Phil Aponte is business development manager for electronics assembly at Siemens Digital Factory.

The Siemens PLC factory in Amberg, Germany is an example of the “practice what you preach” mindset, as it is a fully digital factory, where production is fully automated and the products remain in constant communication with the machines. 12 million PLCs are produced here annually for the world motion control markets.

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