ESCATEC expanding automotive EMS capabilities

Integrated electronics manufacturing services (EMS) provider, ESCATEC, is upgrading its automotive EMS capabilities to meet the growing demand for electronic sub-systems in electric vehicles (EVs).

ESCATEC Electronics – the Group’s business unit located in Penang, Malaysia, – is spearheading the drive to expand in the automotive space under the management of Business Unit Manager, Teoh Ban Chong.

He is responsible for building up the necessary automotive-related talent and skill sets in ESCATEC, besides guiding the Group towards securing the necessary accreditations and standards, developing and implementing processes, systems and automation, as well as developing a reliable supply chain that meets the demanding needs of automotive OEMs.

Business Unit Manager, Teoh Ban Chong

“Automotive-related EMS presents a different set of challenges compared to other market segments,” said Ban Chong. “For instance, while ESCATEC already has the IATF 16949, we are still securing other automotive-specific international accreditations to qualify us as a potential EMS partner to major car makers. These include the VDA 6 (German Automotive Quality Management System) that will enable ESCATEC to export to Europe.”

There are also other standards relating to the use of hazardous materials and environmental protection, which ESCATEC together with its automotive supply chain will have to comply with, such as IMDS (International Materials Data System), FMD (Full Materials Declaration), GADLS (Global Automotive Declarable Substance List), RRR (Recycle, Reuse and Recover Policy), and others. “Car makers may also have their individual ‘Customer Specific Requirement’ relating to processes or product quality which their EMS partner must be able to satisfy,” explained Ban Chong. Many of these standards will also apply to ESCATEC’s automotive supply chain and the Group is already assisting its vendors towards doing so.

Automotive EMS also relies much more heavily on automation as production runs are usually high-volume/low-margin mix while the quality and safety of the product is vital. “The high use of automation minimises the possibility of human and material errors and enables standardised high quality to be delivered across the board,” explained Ban Chong. “Moreover, recent history shows that manufacturing defects can cause huge losses to car makers in recalls, warranties, and loss of reputation.”

The risk and consequences of manufacturing defects have prompted car makers to demand that their manufacturing partners and respective supply chains have in place a very effective ‘traceability system’ which can trace every single item, component, and raw material, that goes into each product. “Car makers are very stringent on safety as people’s lives are at stake, thus they want to be able to trace every fault that may occur in their vehicles back to the source and identify any vehicles that might be at risk,” added Ban Chong.

ESCATEC Electronics currently has two automotive customers with one assembly line each. “We are already in discussion with potential new customers,” said Ban Chong, “so we are planning new assembly lines besides forming a dedicated NPI (New Product Introduction) team to serve automotive-related projects.

Background on EV growth

Recent developments illustrate the growing importance of the global electric vehicle market with industry analysts projecting that the worldwide market will grow on average 24% annually from 2021 until 2028 (from US$287 billion in 2021 to US$1,318 billion in 2028).

Much of the growth is being driven by international efforts to cut carbon emissions and mitigate climate change, as illustrated at the landmark UN climate talks held in Glasgow in Nov 2021 when 30 national governments and six major car manufacturers – including Ford, Mercedes Benz, General Motors, and Volvo – announced that they will work toward phasing out sales of new petrol or diesel-powered vehicles by 2035 in the developed world and elsewhere by 2040.