U.S., European manufacturers join forces to compete with China

George Leopold

June 27, 2012

George Leopold

APPLETON, Wis. – In March, the Swiss electronics manufacturing services company Escatec announced a partnership with a small, up-and-coming contract manufacturer here called Surface Mount Technology Corp. By itself, the deal was merely one of many announced each month in the electronics industry. Viewed from another angle, however, the Escatec-SMT deal underscores the global nature of electronics production at a time when competitiveness along with high-tech manufacturing jobs have become key issues in reviving the tightly linked U.S. and European economies.

The deal made sense since Escatec was looking for a North American manufacturing partner to gain a foothold in the region while gaining another “gateway” to its high-volume manufacturing operations in Penang, Malaysia. Martin Kingdon, Escatec’s director of business development, added that it also allowed the Swiss EMS to move up the value chain by providing R&D and design services closer to its North American customers.

SMT, which specializes in low- to medium-volume contract manufacturing for underserved smaller companies, expanded its customer base through the deal and gained the ability to offer higher-volume contract manufacturing through Escatec’s Malaysia operation.


We visited this upper Midwestern manufacturing hub (in the 1960s, the “Fox River Valley” was home to nearly a dozen paper mills) to get a closer look at the forces shaping the electronics supply chain. We also wanted to find out whether anecdotal reports about electronics manufacturing returning to the U.S. are true. To a limited extent, we found, electronic components like LED modules are now being redesigned and manufactured again at places like Surface Mount Technology.

The other piece of good news is that the Wisconsin company has laid out its design, prototyping and manufacturing facility that currently employs 140 workers with a temporary wall to allow for quick expansion. The employee parking lot was full on the day we visited, and company executives said they are currently running three shifts six days a week to keep up with orders from its current roster of 85 customers.