The customer has built a strong relationship with the contract manufacturer.The account is large enough, and a manufacturer is making a good enough margin on that account for the NRE to be insignificant and petty.The short answer is usually “no.” But there are some exceptions: That’s why it’s usually better to “break out” as much as possible to better track of the NRE you pay. Some contract manufacturers won’t say-or won’t know-when it’s time to remove the amortized NRE. However, amortized costs are difficult to monitor. After the NRE is paid, the per-unit cost would drop to $100. For example, if the unit cost is $100 per assembly, a contract manufacturer might charge a per-unit cost of $110. This means adding the NRE to the unit cost, so that NRE is paid in increments. There’s also the option to amortize the cost. Breaking out means paying all required NRE-tooling and programming for the lot-upfront. You can “breakout” the cost, or amortize. Unless there's a revision to the product's design (or "rev change"), this expense is non-recurring the contract manufacturer can use the same programmed data to manufacture the assembly. This translates into a programming (or "setup") fee. It takes time and labor to program every machine-pick and place, selective solder machine, reflow oven, inspection machines, etc.-for a specific board. The same goes for fixtures, presses, and the other tooling listed below. Afterwards, no new stencils need to be made in order to continue manufacturing that assembly. They will only be used for one kind of PCB and are therefore only manufactured to make that one PCB thereafter. Solder stencils, for instance, are like finger prints. These costs, as with all NRE costs, do not play into the regular per-unit cost of the product.Įach of the items listed below can be considered an NRE cost, because they are specially made for a specific product and for a specific customer. In the PCB industry, NRE is generally charged for two separate categories of cost: tools and programming. In the PCB industry-especially in pull-based contract manufacturing-NRE refers to specific setup costs for manufacturing a newly introduced PCB assembly. It can mean different things in different industries, depending on the product, process, and even supply chain strategy. Non-recurring engineering (NRE) is a broad term referring to a one-time cost to develop, design, or manufacture a new product.
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