MetalMiner recently spoke with Steve Jackson, business development manager of thermal management for Sapa Extrusions North America, about some of the trends his manufacturing organization has seen. (This is Part Two of the interview — read Part One here.)
MetalMiner: Can you give us an example at the category level how companies are making their sourcing decisions?
Steve Jackson: From an extrusion point of view, a printed circuit board slides into a box or enclosure. That box is made out of a stamping or an extrusion. The sourcing of these two items (the PCB and the enclosures) is directly related. For the past 15-20 years, the kitting process occurred overseas. Contract manufacturers supplied electronics companies with a finished product and were free to source the subcomponents (enclosures, for example) from the “cheapest source.” The contract manufacturer would then supply a finished product – such as a printed circuit board with heat sinks in an enclosure – ready to be sold to the end customer. We are now seeing North American contract manufacturers come to us for extruded components.
MM: What steps do you see electronics manufacturers making that indicate a difference in terms of where production occurs?
SJ: Today, major electronics companies are demanding local resources and global support. The design may take place in one country while manufacturing occurs across the country or the world.
MM: What kind of impact will these trends have on aluminum demand specifically?
SJ: Demand will be strong for aluminum across the board, but in my area of focus – electronics and lighting – we’re expecting exceptionally strong demand. Electronics and lighting have very unique thermal challenges, and the best and most cost-effective thermal solution typically involves aluminum.
Stepping back from electronics and lighting, I can tell you that Sapa is seeing growing demand, across the board, for aluminum extrusions. A good example is streetlights. Most are made out of castings, but castings are 20 percent less thermally efficient than extrusions. Extrusions for streetlights are lighter and stronger. That’s just one example of yet another situation where substituting one product for another is fueling increased demand for aluminum extrusions.
MM: What else is happening in five to 10 years? Where are we in the trend cycle?
SJ: As more manufacturing returns to North America, the US metals industry is in a great position. We understand that customers want high quality and short lead times at competitive prices. Our engineers are some of the best in the world, and we have rediscovered how to improve manufacturing and efficiency. The US metals industry is poised for the future.