Component pricing for cost volume analysis.
Additional PCB design tips for optimizing cost volume analysis.
Other manufacturing choices that affect PCB costs.
In the design and production of electronic devices, creating a device that can also be produced at a cost-effective rate is essential. In other words, in order for your manufactured device to be profitable, it must pass the point where total revenues equal total costs. This is something that is oftentimes easier said than done; if not accounted for, your PCB manufacturing costs can quickly get out of hand. For this reason, it is important to perform a cost volume analysis during the manufacturing process to get a better understanding of your expected profit. In this post, we’ll be discussing elements that must be factored in when performing a cost volume analysis during manufacturing as well as some tips for minimizing costs.
Component Prices in Cost Volume Analysis
In general, there are three pricing models associated with components. The first is the book price, which is paid from component distributors to manufacturers. Second is the broken price that is oftentimes used for high-volume sales where the manufacturer allows you to “break” the book cost that the distributor has paid. The final pricing model is the direct price, which is used for large quantity orders where the manufacturer sells directly to the customer without using a distributor.
The more components ordered, the smaller the book-price-per-component is, allowing you to save on costs. For this reason, estimating how many boards you plan to produce and sell before ordering will give you a better idea of the component volume required in addition to a clearer price-per-component.
Furthermore, in the case that a broken price can be agreed on, this may reduce costs even more, as a component manufacturer may be more likely to break their book prices for a couple of reasons:
- Manufacturing takes place in a specific geographical region—suppliers may be more inclined to break the book prices in a more price-competitive region and get their foot in the door through competitive pricing.
- Manufactured boards are at the forefront of technology. Being a component supplier for the latest technology can get a component manufacturer further attention, giving them competitive leverage.
How you choose to design your PCB (components, board quality, and more) will contribute to your final board’s cost
Manufacturing Considerations for Optimizing Cost Volume Analysis
By doing a cost volume analysis for the manufacturing and fabrication process, you may discover methods of reducing the costs in getting a board to market. Below are a variety of board options you may utilize when conducting a thorough cost volume analysis during the manufacturing cycle.
In general, the three main aspects of manufacturing are:
- The turnaround time it takes for the board manufacturing and fabrication process.
- The board quality, including the structural integrity, quality of component materials, the precision of the component-footprint alignment process, the soldering process used, and the reliability of the board.
- The process quality, including the yield rate for production.
Looking closer at the fabrication costs, they depend on several factors. Considering each of these and how essential they are to your design may allow for cost savings. Fabrication factors include using a rigid, flex, or rigid-flex board, the incorporation of Every Layer Interconnects (ELIC), the use of high-density interconnects (HDI), and the number of PCB stackup layers. In order of the highest cost and lead time, these features are ordered in the following way: ELIC (highest), multiple lamination, HDI, and hybrid constructions (lowest). In general, more complex fabrication types are associated with longer turnaround times and costs.
In utilizing specific component and package types, whether you utilize SOIC, QFP, TQFN, leadless, through-hole, BGAs, LGAs, flip chips, and/or CSPs—there isn’t too much of a range in costs and lead times. The one exception may be that some through-hole components and specific high pin-count components (such as BGAs and LGAs) may be more difficult to manufacture compared to SMD components.
In regards to assembly—SMT, lead-free processes, leaded processes, and no-clean processes have similar low costs and lead times. Clean processes and through-hole processes with all assemblies washed may cost slightly more.
Other Factors Affecting PCB Assembly Cost
A variety of other factors in your manufacturing process may affect your cost volume:
Where components are placed (top layer or double-sided assembly).
Processes required, such as SMT pick and place, wave soldering, automated optical inspection (AOI), X-Ray, and/or selective soldering.
Quantity and batch sizes, including panelization.
Specific coating requirements, including medical or military, spray or brush, coverage tolerances, and whether keep-out areas are used or not.
Any additional testing requirements such as power-up testing, functional testing, in-circuit testing, and thermal cycling.
All of these factors should be considered before finalizing your PCB design. In this method, your design team will have a thorough understanding of the necessary manufacturing requirements before your board goes out for production. Working closely with your manufacturer to verify production costs as well as your expected selling volume and price point should be a part of your board’s cost volume analysis.
In order to keep track of your bill of materials (BoM) and many other factors affecting your PCB assembly and manufacturing process, utilizing an advanced PCB editor such as OrCAD PCB Designer is crucial. Leading electronics providers rely on Cadence products to optimize power, space, and energy needs for a wide variety of market applications. To learn more about our innovative solutions, talk to our team of experts or subscribe to our YouTube channel.