The current global political and trade environment has created significant uncertainty in the electronics industry. With tariffs already in place, and the possibility of additional trade restrictions, there are many companies that are reassessing their Electronics Manufacturing Services (EMS) strategies.
Since an estimated 60–80% of global EMS production occurs in Asia, tariffs aimed at countries like China, Vietnam, Malaysia, Thailand, South Korea, and Taiwan are putting pressure on supply chains and margins.
So how should companies respond?
Let’s examine:
- Design improvements that reduce cost and risk
- The impact of tariffs on EMS
- Why electronics manufacturing moved offshore?
- Reshoring and hybrid strategies
The Impact of Tariffs on Electronics Manufacturing (EMS)
Since export costs and tariffs can fluctuate depending on where the product is made or components are sourced, it’s difficult to predict the exact price tariffs add to the final cost of a product. Custom fees, communication barriers, and shipping delays make this even more challenging, encouraging businesses to build their products here in the U.S.
What Happened to American EMS?
With the recent flurry of tariffs, it’s brought up the question of “why are all our electronics made overseas?”
EMS can be divided into two main parts: PCB fabrication (the process of making printed circuit boards without components) and PCB assembly (the process of assembling electronic components onto bare PCBs). Countries like China, Vietnam, Thailand, Malaysia, South Korea, and Taiwan offer more facilities and automation of PCB fabrication and assembly as well as cheaper and more experienced labor better suited to high volume production. All these factors lead to better manufacturing prices and have previously made it difficult to justify U.S. EMS prices for companies until now.
Strategy 1: Fully Reshoring Electronics Manufacturing
If you are a U.S. company looking to bring some or all of your electronics manufacturing back to the U.S., there are several viable options. One approach is to source both PCB fabrication and assembly domestically. The U.S. has a strong network of PCB fabrication and assembly shops all over the country that offer competitive pricing.
The primary challenge lies in identifying reputable EMS partners and knowing how to engage with them effectively. Engineering firms like Sparx are well connected to the EMS industry and can match a product to the EMS facility best suited for its technical and production needs.
While pricing can be competitive, U.S. manufactured electronics are typically still more expensive than offshore alternatives. Tariffs can help offset some of the additional costs; however, the benefits of bringing manufacturing closer to the business or end user often outweigh the cost difference. These benefits include shorter lead times, lower shipping costs, more frequent and regular quality inspections, reduced communication and cultural barriers, and faster design iterations that improve manufacturability.
Strategy 2: Hybrid Reshoring (U.S. Based Electronics Assembly)
Companies often adopt a hybrid onshore/offshore strategy for electronics manufacturing. In this approach, the final assembly is brought back to the U.S. while bare PCBs are fabricated overseas.
The US has significantly more assembly companies than PCB fabrication companies, which contributes to the competitiveness of domestic assembly. We recently assisted a client in procuring and comparing quotes for both U.S. and overseas manufactured PCBs. As a result, the customer significantly reduced lead time and cost, allowing them to complete prototyping and transition into production on schedule.
Finding the Right U.S Based EMS Partner
Other helpful tips when bringing electronics manufacturing back to the U.S. include understanding what capabilities are available locally. Local assembly shops are often easier to find than local PCB fabrication shops, and many assembly houses already have trusted fabrication partners. A good PCB assembly shop can often select an appropriate fabricator for the complexity and requirements of the design.
For a modest fee, an assembly shop can manage all aspects of fabrication, part procurement, and assembly. When the assembly shop handles the entire process, this arrangement is typically referred to as full turnkey. We recommend getting quotes from several EMS providers to compare lead times, pricing and overall responsiveness, as full turnkey fees and service levels can vary.
It is also important to review the PCB fabricator’s manufacturing specifications. Some fabrication shops offer an online DFM (Design For Manufacturing) tool that identifies any glaring manufacturing red flags early in the process. A quality fabrication will have a responsive CAM team that will support your manufacturing process. When engaged early and asked the right questions, the teams can suggest design improvements to reduce board rejects and improve manufacturability.
The key takeaway here is to work closely with your EMS partner, treating them as an extension of your team to ensure a successful and efficient manufacturing outcome.
Improving Manufacturability for Cost Savings
BOM Optimization
From a BOM optimization standpoint, components purchased directly through electronic distributors often carry relatively higher margins, especially at low volume. As designs move to production quantities, there are far more economical pathways to purchase components with bulk discounts. Another important cost-reduction opportunity is reviewing the selected components themselves. In many cases, there are lower-cost alternatives available that offer slightly different performance characteristics but still fully meet the system’s functional and performance requirements. Designers often default to higher-spec or premium components early in development to reduce technical risk, but those choices may not be necessary once requirements are well understood. Carefully evaluating alternate parts can result in meaningful BOM cost reductions with little to no noticeable impact on overall system performance.
It’s common to unintentionally build cost adders into a PCB design without realizing it. Examples include via-in-pads, excessively thin traces or tight spacings, exotic or non-standard PCB materials, controlled stack-ups, non-standard platings, high layer counts, very small vias, excessive via counts, unnecessary components, overly expensive parts, components rated beyond what the application requires, etc… While designers typically invest the time needed to ensure the PCB works, they typically don’t have the opportunity to perform another PCB design review cycle focused on cost reduction. This is usually due to project deadlines or budget constraints. This additional effort includes a DFM review.
Design for Manufacturing (DFM) Review
After a DFM review, a focused DFA (Design For Assembly) review can deliver even greater savings, often exceeding those achieved through bare PCB optimization alone. DFA improves how easily an EMS partner can complete assemblies, reducing assembly time, minimizing errors and board rejects, and enabling greater use of automated assembly processes. Many component manufacturers offer pre-programming services at minimal per component cost, prior to assembly, eliminating the need for the EMS shop to perform this step and reducing overall manufacturing time and expense. These extra DFA review steps can have huge cost-saving benefits and a more consistent build quality.
Sparx Can Help!
Navigating tariffs in electronics manufacturing is a complex process involving evaluating U.S. based EMS partners, cost tradeoffs, and potential design improvements. If you’re reevaluating your electronics manufacturing strategy, contact Sparx Engineering to discuss how we can support your transition. Sparx Engineering can help establish EMS partnerships for you to avoid tariffs for new or existing products and help design or review existing designs to set your product up for success. Check out our Electrical Engineering capabilities here and contact Sparx today to learn more!