Business Setup for PCB Assembly

PCB assembly and design is a perfect opportunity for entrepreneurs who have a
good electronics knowhow. This business can be started with a relatively small
infrastructure and capital investment

Printed circuit boards (PCBs) are used in almost all electronic and electrical products,
ranging from consumer gadgets such as PCs, tablets, smartphones and gaming consoles
to industrial and high-tech products in strategic and medical electronics domains. These
provide the base and connectivity to various electronic components such as resistors,
capacitors, coils, pots, diodes, transistors, ICs and transformers to complete the
electronic circuit.

PCB assembly and design is a perfect opportunity for entrepreneurs who have a good
electronics knowhow. This business can be started with a relatively small infrastructure
and capital investment. In this article, we enlist the steps to set up a small-scale PCB
assembly business.
Market potential
India is one of the fastest growing electronics market in the world and is anticipated to
reach US$ 400 billion in 2022, with domestic manufacturing climbing to over US$ 100
billion. This staggering growth leads to immense potential for the PCB market.

According to an ELCINA study, domestic market demand for PCBs will grow annually at
20.56 per cent over the period 2015-20, and reach over US$ 6 billion by 2020 from the
current level of US$ 2.38 billion (see table). Consumer electronics, LED lighting,
automotive electronics and industrial electronics are all major drivers for the PCB
industry.

The current US$ 2.38-billion market represents demand for all types of PCBs, including
bare-board as well as populated PCBs. Only 35 per cent of this demand is met by local
manufacturers. Demand for bare-board PCBs is worth US$ 1.2 billion. Only 30 per cent of
this demand is met by local PCB manufacturers. Thus this is the perfect time to start PCB
assembly (PCBA) business.
Business setup
According to the size of operation, PCBA manufacturing units can be categorised as
follows:

1. Large-volume manufacturing
2. Small-volume manufacturing
3. Small-volume fast-delivery manufacturing
4. Small-volume complex-design PCB manufacturing

Requirements of space, machinery, utilities like water and electricity, etc vary for all these
categories.

Raw materials

The major raw materials required include solder, flux, chemicals, adhesive, wires and
PCB. The PCBA process always starts with the base, which is the most basic unit of a PCB.
It consists of several layers, each of which plays a significant role in the functionality of
the final PCB. These alternating layers include:

1. Substrate. This is the base material that imparts rigidity to the PCB.

2. Copper. A thin layer of conductive copper foil is added to functional sides of the PCB.

This is the layer of copper traces. In single-side PCBs, copper is applied on only one side.
Double-side PCBs have copper on both sides.

3. Solder mask. On top of the copper layer is the solder mask, which gives each PCB its
characteristic green colour. It insulates copper traces from unintentionally contacting
other conductive materials, thus preventing shorting. The solder keeps everything in its
place. Holes in the solder mask are where solder is applied to attach components to the
board. Solder mask is a vital step for smooth manufacturing of PCBA since it stops
soldering on unwanted parts with shorts avoided.
4. Silkscreen. A white silkscreen is the final layer on the PCB board. It adds labels to the
PCB in the form of characters and symbols. This helps to indicate the placement of all
components on the board.

These materials and components remain largely the same across all PCBs, with the
exception of the substrate. The substrate material of a PCB changes according to the
finished product requirements such as low cost and bendability.

Machinery and tools

The must-have PCB assembly machineries include:

1. Heat-wave soldering machine

2. Oscilloscope (50MHz)
3. LCR-Q meter
4. Function generator
5. Power supply (0-30V, 3A)
6. 4½-digit digital multimeter
7. Analogue multimeter
8. Magnifying glass fitted with tube light
9. Temperature-controlled soldering station
10. Soldering iron (25W)
11. Soldering iron (65W)
12. Variac
13. Rheostat

Additional machineries, equipment and tools may be required depending on the nature of
the final product, scale of operation, quality compliance requirements, etc. These include
but are not limited to:

1. Torque-controlled screwdrivers (electric and pneumatic) to tighten screws and to speed

up the production work. Various models are available in electric (AC and DC) and
pneumatic categories.
2. Liquid dispensers to dispense glue, epoxy, solder paste, etc. Different kinds of
dispensers are available, such as general dispensers, robotic dispensers, rotary
dispensers, valves and valve controllers.

3. BGA and other repair or rework machinery

4. Tools such as wire and cable strippers, electronic pliers and screwdrivers, crimping
tools, thermal wire strippers, heat guns, cable cutters, test and measuring instruments for
power utility, and LAN testers.

5. Adhesives and cleaning products, cases and tool kits, ESD-control products, power
tools, test instruments for field and portable use, wire-wrap tools

6. Microscopes, magnifying lamps, magnifiers, professional tool kits, pliers, cutters,

precision screwdrivers and tweezers, alignment tools, knives, blades, scissors, wire
strippers, service tools and brushes

7. Machines for radial and axial components cutting/components forming/components

bending/components kinking, electronic components counter, selective soldering and
rework systems

8. Humidity-controlled electronic components storage cabinets

Manufacturing process

PCB assembly process consists of several manufacturing and quality control steps
depending on the quality and specification requirements of the final product. However,
the basic assembly procedure is quite simple.

First, electronic components and the PCB are tested for the required specifications. In the
assembly line, electronic components such as resistors, capacitors, coils, diodes,
transistors, ICs and SCRs are fitted on the PCB at their appropriate location under
different stages. Then the PCB is passed over the heat-wave soldering bath for soldering
of components to the PCB.
In the next stage, unwanted component leads are removed and components are checked
for proper soldering with the help of a magnifying glass fitted with tubelight. Then with
the help of appropriate test jigs, the assembled PCB is tested for its specification before
despatch to the customer.

Major steps involved in this procedure are detailed below:

1. Heat pressing and etching. Press the layout on the board using heat. Additionally,
remove unnecessary copper from the board.

2. PCB drilling and conductor plating. Drill holes to match legs of electronic components.
Then to go for nickel or tin plating on copper around holes so that components can be
soldered.

3. Soldering and testing. Pass the PCB though the heat-wave soldering bath for soldering
of components to the PCB. In the next stage, remove unwanted lead-ends of components.
Check whether the circuit is giving the required voltage and current. Place electronic
components on their respective location and solder them. Finally, with the help of
appropriate test jigs, test the assembled PCB for its specification.

Pollution control

The Indian government accords utmost importance to environment pollution control.

Small-scale entrepreneurs should have an environment-friendly attitude and adopt
pollution control measures by process modification and technology substitution.

India having acceded to the Montreal Protocol in September 1992, production and use of
ozone-depleting substances (ODS) like chlorofluorocarbons, carbon tetrachloride, halons
and methyl chloroform need to be phased out immediately with use of alternative
chemicals/solvents. Detailed rules for regulation of ODS phase-out were notified under
the Environment Protection Act 1986, on 19th July, 2000.
The following steps may help to control pollution in the electronics industry wherever
applicable:

1. Fumes and gases released during hand soldering/wave soldering/dip soldering are
harmful to people as well as the environment and end products. Alternative technologies
may be used to phase out the existing polluting technologies. Numerous new fluxes have
been developed containing 2-10 per cent solids as opposed to the traditional 15-35 per
cent solids.

2. CFCs, carbon tetrachloride and methyl chloroform are used to clean PCBs after
assembly in order to remove flux residues left after soldering and various kinds of foams
for packaging. These could be replaced with alternative solvents. Chlorinated solvents
such as trichloroethylene, perchloroethylene and methylene chloride have been used as
effective cleaners in the electronics industry for many years. Organic solvents such as
ketones and alcohols are effective in removing both solder fluxes and many polar
contaminants.

Skillset requirements

You must have a good understanding of:

1. Functionalities of electronic components like transistors, capacitors, resistors,

diode and ICs
2. Working of the electronic circuit
3. Different PCB base materials
4. Electronic design, components assembly and circuit testing
5. IPC/Mil standards
6. Circuit board design software like CAD, Allegro, Altium and PADS
Business economics

Fixed capital

Production machinery and equipment cost=A

Cost of office equipment, furniture, working tables, etc=B
Electrification cost (@ 10 per cent of production machinery cost)=0.1A
Preoperative expenses=C
Total fixed capital=A+B+C+ 0.1A=D

Operational cost per month

Minimum land and building requirements are as follows:

1. Land and building builtup area: 150sq.m

2. Stores: 50sq.m
3. Assembly and testing facility: 100sq.m

Rent for the above-mentioned infrastructure/month=R

Human resource requirements are as follows:

1. Servicing engineer cum manager: 1

2. Accountant/cum computer operator: 1
3. Skilled workers: 6
4. Semi-skilled workers: 4
5. Office boy/watchman: 1

Human resource cost per month=H

Raw Material cost per month=M
Utilities (power, water) cost per month=U
Other contingent expenses per month=E

(Contingent expenses include rent, postage and stationery, telephone/telex/fax, repair

and maintenance, transport and conveyance, advertisement and publicity, insurance,
taxes and miscellaneous other expenses)

Total recurring expenditure per month=R+H+M+U+E=I

Total capital investment

Total fixed capital+Total recurring expenditure for three months

=D+3I
=T

Financial analysis

Cost of production (per annum)

=Total recurring expenditure per annum+Depreciation on plant and machinery @ 10 per

cent +Depreciation on office equipment and furniture @ 20 per cent+Interest on total
capital investment @ 14 per cent

=12I+0.1A+0.2B+0.14T
=N

Sales turnover per annum

=Item quantity (numbers)×Rate/Unit (Rs)
=54,000×Q=S

Profit (per annum) before tax

=S–N=P
Net profit ratio=(Profit×100)/Sales turnover=100P/S
Rate of return=(Profit×100)/Total capital Investment=100P/T
Fixed cost (FC) per annum

=Rent per annum+Depreciation on production machinery and equipment @ 10 per

cent+Depreciation on office equipment and furniture at 20 per cent+Interest on total
capital investment @ 14 per cent+Insurance +40 per cent of human resource costs
including salary and wages+40 per cent of other contingencies
Breakeven point (BEP)=[FC/(FC+Profit)]×100