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Semi Sweet: CAPEX vs StaffEX or Buy vs Build

It’s been my observation that CAPEX spend is indirectly proportional to available engineering talent to deploy said capital

In other words, it feels like this;

Have Cash – No Staff


Have Staff – No Cash

Staffing and #CAPEX both roll-up under #OPEX but my post is about how to manage the space between having cash and losing staff

Empirical Evidence

Have you noticed the staggering ratio of recruiting posts on LinkedIn relative to the typical Op/Ed posts?

Have you noticed the substantial increase in posts about #funding and #Semiconductors and #fabs?

I’ve made my point – moving on ;^)

Let’s assume the pendulum is swinging towards CAPEX funding and away from available #semiconductor #engineering talent – how do we take advantage of the trend and at the same time minimize the negative impact?

In a +CAPEX environment here are a few strategies to maintain staff and increase throughput;

Plan for long-term Capital build-outs

Model your mid/long-term throughput goals, capacity and surge demand and buy incremental capital upfront, prior to inevitable price increases

Keep a macro-mindset when planning for capacity and throughput increases at the back-end, lack of material from a constrained up-stream process may leave your new capital depreciating while sitting idle

Strengthen partnerships with contractors and solution suppliers

Build vs. Buy: Is a decision process which stems from the StaffEX vs CAPEX macro-modulation

When CAPEX funding is tight and talent is available, companies custom build hardware and software solutions internally

As #attrition whittles away at your engineering team, trusted solution providers and contractors can save abruptly orphaned projects and deadlines

Interview / offer / hire / onboard cycle-time has gotten ri-dic-u-lous and will add whitespaces in your #Gant chart – contractors can carry the schedule if brought into the project early

Projects like factory tool integration often require experienced, insider engineers to deploy – pick the right projects and a mix of captive and contract engineering to balance resourcing

Refresh aging tools and infrastructure

Investing in new tools and infrastructure attracts talent to your team while increasing capacity and throughput

Super-stars walk away from great companies who let aging equipment dominate their install base

Depreciated capital presents well as low COGS – but nothing good happens when you can’t support the tools and your NPI business model leans on a long-depreciated fleet

New grads and top talent don’t want [or need] to work on the tech of yore in a CAPEX flush economy


Full disclosure: I provide consultation and sell test instrumentation and automation solutions