Electronic manufacturing is going through one of the biggest shifts it has seen since surface-mount technology changed production in the 1980’s. Today, the industry is being pushed by several powerful forces at once such as geopolitical supply chain uncertainty, the explosive energy need of AI systems, and the increasing complexity of modern electronic products. Together, these factors are forcing companies to rethink how electronics are designed, assembled, and tested at scale.
At the same time, technologies such as artificial intelligence, advanced semiconductors, automation, and smart manufacturing systems are changing the factory floor. Manufacturers are focusing now not only on cost reduction, but also on flexibility, efficiency, sustainability, and supply chain resilience. With smaller and more powerful electronic products being made, processes are getting smarter, so require higher precision, smarter quality control, and closer integration between design and production.
AI-augmented assembly and inspection
Artificial intelligence is no longer just a concept in research labs – it is now actively running on production lines. Modern machine vision systems can spot soldering defects, misaligned components, or contamination more accurately than human inspectors and they can do it continuously at full production speed. Unlike older inspection systems that dependent on manual tuning and fixed rules, todays AI based tools learn from data and can adapt across different product designs with minimal reconfiguration.
But AI isn’t improving only quality checks, it is also being used in earlier processes to predict problems before they happen. In the same way, sensors tracking vibration, heat, and sound help predict machine failure before they cause production stoppages. The result is less downtime, fewer defects, and lower overall manufacturing costs.
In many ways, the factory is no longer the only place where products are built – it is becoming a continuous stream of data that can be optimised and analysed in real time.
New power semiconductors are changing design itself
Materials like silicon carbide (SiC) and gallium nitride (GaN) are rapidly moving from specialised use cases into mainstream electronics. SiC is now being widely used in electric vehicles power systems because it can handle higher voltages and switch more efficiently, which help reduce size and weight. GaN is increasingly found in fast chargers and data centre power systems because it delivers high performance in compact, heat efficient designs.
However, manufacturing these materials at scale is still evolving. The industry is shifting towards larger wafer size to reduce costs while also debating the best substrate approach for GaN devices. Some use an efficient price system while others exploit an ideal operation. This innovation speed is pushing forward the semiconductor manufacturing equipment market. These firms have to be aware that a significant amount of investment must be implemented on fabrication process equipment, inspection equipment, packaging equipment etc. to enable manufacturing of novel chips and power devices.
Chiplets are replacing the ‘one big chip’ approach
It is more effective to manufacture lots of smaller, specialised chiplets and combine them together in a package rather than manufacturing one large, intricate chip. This allows manufacturers to combine chips manufactured on a variety of different process nodes together for improved cost and performance.
This chiplet revolution has been enabled by the development of packaging technologies which allows the chiplets to be positioned, on top of one another, with great accuracy. However, this poses some difficulties as such positioning demands precision placement, improved heat management, and a whole new methodology for testing, so as to ensure quality.
Previously this was solely a single-chip engineering problem, but now it is rapidly developing into a system-in-a-package engineering problem, as well as a method for developing and manufacturing products more efficiently by allowing components to be re-used in place of designing a new chip.
Additive electronics and printed functionality
Another emerging area is the ability to ‘print’ electronics directly onto flexible or unconventional surfaces. Instead of assembling traditional rigid board, manufacturers can now deposit conductive and functional materials layer by layer to create circuits.
This is especially useful in wearables, smart packaging, and aerospace monitoring systems, where flexibility, shape, and weight matter as much as performance. However, printed electronics still face technical limits, especially in conductive and high frequency performance compared to traditional copper-based circuits.
Researchers are working on improving inks, processing methods, and hybrid designs that combine printed elements with conventional elements on the same substrate.
Sustainability and the circular economy imperative
Environmental laws and resource issues are beginning to dictate the design and production of electronics. The introduction of laws in regions like the European Union demand manufacturers to design devices that can be easily broken down, repaired, and recycled.
Simultaneously, companies are beginning to face mounting pressure to recover useful resources such as lithium, cobalt, and rare earth elements from electronic waste instead of disposing of them. In response, manufactures are now developing and investing in recycling mechanisms, tracking systems and the ‘digital product passport’ which tracks all materials throughout a products lifecycle.
Environmental issues and concerns also drive consumer demand and business strategy since, customers are now judging products based on their sustainability and environmental efficiency in addition to product performance and cost.
The road ahead
The merging of these different strands – AI for process intelligence, wide-bandgap power, chiplet integration, additive electronics, and green design – doesn’t translate into one single view of the factory of the future. Instead, it represents a shift toward ever greater specialisation with manufacturers building deep competencies in a couple of the areas set to out-perform the generalists and supply chains between substrate maker, assembler, tester, and fab being rebuilt to manage the inter-dependencies these new technologies spawn.
The challenge for design engineers is to get a handle on this changing manufacturing landscape early in the development of a product when the possibilities are widest for choice of component, assembly method, and substrate material.
It is costly enough in conventional PCB assembly to consider manufacturability as an after-thought while in the context of advanced packaging or printed electronics, the cost is substantially greater.
In this respect, the changes impacting the manufacturing environment are more than just about what’s happening on the shop floor and rather they are about challenging the industry to re-think where design finishes and manufacturing starts.
