Premier Magnetics Inc., a Lake Forest-based company that makes electromagnetic components for practically everything from wall chargers to defense systems, has set up a factory in the Southeast Asian nation of Myanmar as it seeks to avoid the U.S.-China tariff dispute.
The company had already established a plant in Vietnam as part of a production shift.
“That’s a big part of our plan for getting past the U.S.-China trade war situation,” said Dennis Earley, who was promoted from vice president to president of Premier Magnetics on Aug. 1.
He said the various locations will help maintain steady production in case of a disaster hitting one of the plants.
The company’s specialized products include power supply transformers, converters that change one direct-current voltage to another, electronic noise-reduction filters and electrical inductors that store energy in a magnetic field.
The company also makes military-grade devices known as “data bus transformers” suitable for smart munitions and fly-by-wire flight control.
Premier Magnetics components are also found in LASIK surgical equipment, aircraft cabin lighting systems and galley systems, as well as in audio products made by local companies such as Costa Mesa’s QSC and Extron of Anaheim.
Outside China
Before the pandemic disrupted China-dependent supply chains earlier this year, several U.S. companies were relocating production to elsewhere in Asia.
Earley said the factory in Myanmar—formerly Burma—is in a special economic zone in Thilawa, about 35 kilometers (22 miles) from the airport that serves the former capital Yangon. The U.S. State Department said in January: “Burma remains a country in transition to democracy and faces significant ongoing challenges and deeply troubling human rights issues centered on a powerful military that acts with impunity.”
The shift to the Myanmar site will come in two stages, first in a leased facility of 215,000 square feet.
“We’re estimating that by the end of the third quarter we will have full manufacturing capability in that special economic zone,” Earley said.
For the second stage, Premier Magnetics is building a new factory there to be completed at the end of November of next year.
The products made in Myanmar include high-frequency and low-frequency transformers, as well as inductors, noise-reduction filters and audio-specific products.
“It’s definitely new territory for us,” Earley said of setting up manufacturing in Myanmar.
Challenging Year
Due in large part to the tariffs, “Last year was challenging for us,” according to the new president.
Earley said his company also has manufacturing sites in Taiwan, as well as three major ones in China. The China facilities will remain in place, he said.
“We were dragged into the China-U.S. trade war,” he added. “Our main products, transformers and inductors, were hit with a 25% tariff. That has affected our business.”
He said “we’re mainly doing older technology products like 50/60 Hz transformers” at the Vietnam plant just outside Ho Chi Minh City, still often referred to as Saigon. Production started there in January.
Earley had been serving as vice president and general manager for the past three years. His father, company founder Jim Earley, remains on as chief executive.
The Lake Forest headquarters houses R&D, engineering, quality assurance, sales, and prototype lab staff. The company also has a Southern California manufacturing location.
