This year is different. Rather than reflections and forecasts, it is starting with the memory of longtime colleague and friend Dieter Bergman. He did more than any other single person that I know to help the printed circuit board industry and its standards bearer, the IPC. He was consistent and persistent. He was a pioneer. He had an indomitable zest for life. There is a saying that a man is known by his enemies. Dieter was known for his accomplishments, his consistency, his selflessness, his tireless efforts to help build the industry and its standards - globally. He became an industry icon for the decades. He did this without creating a single enemy.*
*Note Rex Rozario, OBE's (Secretary General WECC, IPC and EIPC Board of Directors, and Chairman of Graphic PLC) and Peter Bigelow's (president of IMI and former member of the IPC Board of Directors) personal memories of Dieter on our comments page.
It is fitting that we all pause to reflect upon our time with Dieter and the good that he has wrought for so many around the world. It is proper that he and his memory receive the recognition that he did not seek. The IPC, for whom he toiled so long, is taking steps to ensure that will happen.
IPC APEX EXPO 2015 will recognize an IPC and industry icon, Dieter Bergman, during a tribute on Wednesday evening February 25 at the San Diego Convention Center. Dieter’s name will forever be synonymous with IPC as he leaves a legacy of accomplishments, friendships and lasting memories. During Dieter’s tribute, several IPC members will be honored with the IPC Dieter Bergman Fellow Award and will have the opportunity to bestow a Dieter Bergman Scholarship to the university or college of their choice.
The event ticket price of $25.00 will go toward the Dieter Bergman memorial scholarship fund. "We hope you will join your colleagues in celebrating Dieter’s lifetime of achievement as this special event," says IPC President Dr. John W. Mitchell.
Times have certainly changed
Forty-Three years ago, when I was the Vice President of Business Development of Oxy Metal Finishing (Sel Rex, Udylite, Parker, et al), I was invited to speak at one of the first shows in Japan for the electronics industry. It was called INTERNEPCON JAPAN and focused on printed circuit manufacturing and electronic packaging. It was easy to plan one's time and find topics and exhibits of interest. Over the years specialized competing events developed, there as well as around the world. Then as markets and technology shifted and production began to concentrate to fewer and larger organizations, attendance began to slip. Trade organizations adapted and morphed into different profiles and areas of focus.
In Japan, INTERNEPCON became NEPCON JAPAN. To boost attendance, the show producers kept adding new concurrent events such as Electrotest, IC Packaging Expo, Automotive Component Processing Technology Expo, Wearable device Technology Expo, etc., to the point that there were 14 different areas of focus more than 2,000 exhibitors in this month's event. The attendance WAS up. But those from "our" industry were at a loss to cover the entire show, segment out what was applicable to today's and tomorrow's business while seeing items that just were of interest to them.
At the contained Printed Wiring Board Expo Oki Printed Circuits introduced its >100 layer advanced "super multilayer" rigid PCB, 7mm thick with trace widths of 0.095 mm as well as a 32Gbps high speed transmission board. Oki's Y. Shirakura stated that he would be visiting the U.S. in February seeking to form new representative relationships.
Japan's Masamitsu "Matt" Aoki has just completed updating his major charts: "Thin Type Printed Wiring Board And Their Application In Japan" version 25.0, and
"Build-Up Type Printed Wiring Board And Their Application In Japan" version
15.0. Both of these detailed charts are copyrighted January, 2015. Aoki has also
compiled a ranked list of the top 39 Taiwan printed circuit fabricators using data from the TPCA. Contact us if you wish a copy of the charts or the list which includes 2014 sales for each of the Taiwan companies.
Every so often I see an article or column that strikes a chord that should stir some discussion and asks a question for which there is no answer. Dan Beaulieu's January 24th "It's Only Common Sense" is one of those. Excerpts are posted on our Comments and Discussions page.
Will this put a damper on some of the electronics growth in 2015?
China’s economic growth slowed to 7.4% in 2014, downshifting to a level not seen in a quarter century and firmly marking the end of a high-growth heyday. The slipping momentum in China, which reported economic growth of 7.7% in 2013, has reverberated around the world weakening an already soft global economy. While 7% growth would be the envy of most economies, Beijing says at least this level is needed to create enough jobs for China’s huge population.
The slowdown comes at a vulnerable time for the world economy. The Eurozone is at risk of a third recession in six years. Abenomics policies have failed to lift Japan out of stagnation. Output in many major of the emerging markets that provided impetus for global growth over the past decade is slowing faster than expected.
Economists see the slowdown as the prelude to an extended deceleration of growth. Leaders since mid-2014 have emphasized a “new normal” of slower growth. How China addresses the slowdown matters. Reliance on real estate, construction and smokestack industries has reached its limits, as evidenced by rising debt and polluted skies over much of the country. source WSJ)
Sources state that CSUN Manufacturing and Ampoc Far East will both report flat or slight growth in the first half of 2015 due to continued brisk orders for wet-process PCB manufacturing equipment, as PCB manufacturers upgrade production lines and expand capacity for HDI boards and IC substrates.
Chin-Poon Industrial reported consolidated revenues of NT$5.51 billion (US$172.96 million) for the fourth quarter of 2014, hitting a quarterly record for the second consecutive quarter. Consolidated sales for all of 2014 were up 9.8% to $673 million. Chin-Poon continues to see its plants run at full utilization buoyed by strong demand for car electronics.
Do you remember the song that began, "I was born to wonder....?"
Well, I wonder what percent of flexible circuit production in greater China (and elsewhere) is dependent upon demand for Apple's iPhone, and what percent is dependent on all of its droid, windows and other smart phone competitors.
FOXCONN has become Mexico’s second largest manufacturing exporter. General Motors is the largest.
Market observers state that Taiwan-based firms such as Apex International, Nanya Printed Circuit Board, Tripod Technology, and Unitech Printed Circuit Board, will see sales from the automotive industry drive their revenue growth in 2015.
Digitimes Research predicts that global tablet shipments will drop 11.8% in 2015. Yet, Intel achieved its goal of shipping 40 million tablet APs in 2014 and for 2015, It raised its goal by 10% to 44 million units, to account for one third of the non-Apple tablet shipments in 2015.
Oki Printed Circuits has started production of HDI PCBs having a maximum board thickness of 3.5 mm (30 layers) to support next-generation 1,000-pin LSIs with a pin pitch of 0.35 mm. These PCBs are used for socket boards used in LSI function testing devices. The tight tolerance boards are made possible by Oki's newly developed FiTT method, which is capable of forming through vias of ultrafine diameters (finished diameter 0.10 mm), a feat not possible with existing build-up or through via methods. What made this possible are high-precision laminating technologies, which minimize layer-to-layer registration offsets to within 40 µm, and high-precision drilling technologies, which use systems for adjusting via hole positions down to the micron level and optimizes drill shape and drilling process steps. Oki states that the simplicity of the process allows production at low cost and short lead times. It will exhibit this technology Tokyo this month at NEPCON JAPAN 2015.
Fremont California's test company Datest has introduced a new PCB reverse engineering service. With its new capability, Datest states that it can now rebuild board data from printed circuit boards (PCBs) and printed circuit board assemblies (PCBAs).
IPC APEX was the busiest in many years in terms of numbers of exhibitors and attendees.
The tribute to Dieter Bergman was an historic industry event in which it seemed that every member of a "packed house" had a memory of the IPC icon to share. David Bergman, MC'd the evening in which he read touching recollection of Dieter's career written by Raymond Pritchard, the founding Executive Director of the IPC. Lesley Bergman, Dieter's widow, promised a book based upon their daily diary. It will be a love story.
During the affair, the first Dieter Bergman IPC Fellowship Awards were bestowed upon eight select individuals who have exhibited long term leadership in promoting IPC and global standardization efforts. These award recipients bestowed the first Dieter Bergman Memorial Scholarships as follows:
Bob Neves, Microtek (Changzhou) Laboratories (Pacific Union College, Engineering Dept., Pacific Union College in Angwin, California); Doug Sober, Shengyi Technology Co. Ltd. (Clarion University, Chemistry Dept.); Denny Fritz, SAIC (Rose Hulman Institute of Technology, Terre Haute, Indiana); Don Dupriest, Lockheed Martin Missile & Fire Control (Texas A&M University-Commerce Foundation in Commerce, Texas); Ray Prasad, Ray Prasad Consultancy Group (University of Washington, Nanofabrication Facility); Randy Reed, Viasystems Group, Inc. (South Dakota School of Mines and Technology); Bernie Kessler, Bernard Kessler & Associates, Ltd. (University of Southern California, John Marshall School of Business); Dave Hillman, Rockwell Collins (Iowa State University, Materials Science & Engineering (MSE) Dept.).
Above: John Mitchell [left] and David Bergman present the Dieter Bergman IPC Fellowship Award to Bernie Kessler [center]. Bernie was the most "senior" of the eight recipients and a contemporary of Dieter. My wife Marcy and I first met Bernie in February, 1963. We decided to extend our honeymoon to overlap several technical meetings and presentations that I was scheduled to make in Southern California the following week. Bernie was the first person in our industry that my new bride met (besides of my employer). He picked us up at LAX and on the way to our hotel in Orange County he asked Marcy if she had ever seen a factory that made copper clad laminates. She replied, "What is that?". Bernie immediately reversed direction and took us to tour the Mica Corporation in Culver City. When I reminded Bernie that we were on our honeymoon, he stated, "That can wait."
eSurface made its presence at the show well-known with its keynote and luncheon sponsorships, videos, and literature about "making the impossible possible".
VIP's at the eSurface booth left to right are: John Mitchell, IPC President, Adaline Woodard, District Representative, Office of Congressman Darrell Issa (R-Vista, CA), Janine Pairis, District Director, Office of Congressman Juan Vargas (D-Chula Vista, CA), Mike Corrigan, eSurface President , Rick Terrazas, District Chief of Staff, Office of Congressman Duncan Hunter (R-El Cajon, CA), Rowland Hanson, eSurface Board of Directors & GM Strategic Communications, Jim Ryan, eSurface Vice President of Business Development, Shea Benton, Field Representative, Office of Congressman Scott Peters (D-San Diego, CA), Alex Richardson, eSurface Vice President of Global Strategic Operations, John Hasselmann, IPC Vice President of Government Relations.
Select show attendees were invited to view the new breakthrough additive circuit process run at Murrietta Circuits in Anaheim, eSurface's "local" licensee. A European attendee that saw the system running in Anaheim said, "When a shop like Murrietta can run the process then I would consider this as a proof of the functionality of the system. I consider the eSurface process as an advanced imaging technology like Riston was in the late 60s."
A number of attendees reported that they saw little that was new. We had no problem "discovering" a number of important new items or major changes. For example, OMG introduced a zero stress electroless copper deposit which we consider important for flexible circuits, wearable electronics and other applications where stressed copper deposits are detrimental to fabrication or performance life. It does not contain EDTA, making waste treatment of rinse waters or spent solutions easier. It can be operated in vertical or horizontal mode. It can also be used for plating over filled vias where adhesion is critical. YINCAE Advanced Materials described its new solder joint encapsulant which reportedly quintuples solder joint strength. P.K. Metals showed the AKILA dross recycling unit (for metal reclaim) built by WKK* for use with P. KAY Metals' MS2.
*WKK builds equipment "to print" in its secure campus in China near Hong Kong for OEM companies around the world.
Chrys Shea stated that she observed a couple of "cool developments" in stencil printing that are noteworthy. She said that specifically on the PCB assembly side, innovative new technologies in the critical stencil printing process included:
• A new stainless steel stencil alloy from Datum that raises print performance and lowers price
• The rapid growth of stencil nanocoatings with Aculon announcing DEK and Alpha as worldwide distributors
• Incorporation of intelligent subsystems in Parmi’s solder paste inspection machines to help diagnose problems, and even fix some of them inside the machine.
Camtek unveiled the Gryphon SL and gave live demonstrations of the system's capabilities showing a full cycle of solder mask deposition and legend printing by advanced inkjet layering techniques that conquered uneven topographies while curing each layer.
Dr. Alan Rae, Executive Director ATRI / CCIC, stated, "Apex was well attended and the show floor was alive with people making deals. In terms of new technologies, the eSurface booth was particularly striking and had good traffic. ----- One of the ongoing challenges in the standards areas is that companies are finding it more difficult to send representatives to standards committees, and standards with fewer participants run the risk of being less universally effective standards."
Fabcon (OLEC) displayed two new imaging systems: the Microprint DI (below on the left) and the Accuprint SSi (on the right).
The Microprint DI is a DMV direct imager with a 32,000 dpi image matrix which means that it has a submicron raster single pass scan that provides smooth edges on circuit patterns. It is available in single head or four head versions. The Accuprint SSi is a contact printer that uses a solid stae UV LED light source with multiple heads that provides the equivalent energy of an 8KW light source for exposing UV curable solder masks as well as conventional primary imaging resists. It can process solder masks at 2 to 4 sides a minute. Fabcon announced at the show that it has become a working partner of eSurface to develop special equipment for 3D exposure with eSurface's process for making surfaces conductive.
IPC President Dr. John Mitchell presented Gary Ferrari, FTG Circuits (above left) and Nilesh Naik, Eagle Circuits with the industry's highest award, induction into the Raymond E. Pritchard Hall of Fame.
Cisco Systems' strong quarterly results are positive for companies in the networking giant's supply chain, such as Celestica, Flextronics International, and Amphenol according to RBC Capital Markets.
Taiwan-based supply chain companies are forecasting a better 2015 than 2014. Flexible circuit maker Flexium Interconnect expects that sales this year will outpace those of 2014. January sales of $55.2 million were up 60.6% January 2014.
Apple Watch, which will soon be widely available, has already made an impact on its production supply chain. Since Apple adopted SiP technology, PCB manufacturers who make substrates for Sip, such as Nanya PCB and Kinsushave shipped out over one million substrates in January. ASE, who has received OSAT (Out Sourced Assembly & Test) orders for SiP (System in a Package), has also benefited by the ramp-up of Apple Watch.
Unimicron, Kinsus, Tripod, Compeq, Apex, and Chin Poonare among the many PCB manufacturers that plan to increase production by expanding new plants or purchasing new equipment. The results of this increase shall be seen in the second half of this year. Compeq's growth this year is expected to be mainly from new smart phone HDI orders.
The price of copper-clad laminate price in Greater China declined 3% in January and could drop another 4-5% in February bringing it to its lowest point in 5 years. PCB fabricators are expected to resist any demands for price decreases as they claim that their prices are already "too low".
PCB and PCBA supply chain members in China believe that that pent up buying needs of the past 3 years will break out into hard equipment purchases in 2015.
How to protect the future - support your local companies, incentivize modernization!NEPCON China 2015 will again focus on electronics manufacturing automation focusing on automation system integration, a step beyond mere hardware equipment. Starting this year, Guangdong will run a three-year incentive plan to encourage companies in the Pearl River Delta (PRD) to replace manual labor with robotics. It is targeting 600 companies with this program. A company that procures robotics to replace manual labor will receive a 10-20% rebate from the government! In February, the Dongguan municipal government published the Dongguan 2025 Manufacturing Strategy that included 43 strategic measures. One of these measures called for accelerated robotics adoption. Last year the Dongguan municipal government initiated a plan to encourage robotics adoption by providing an annual rebate of $32.2 million to support companies. Recently, the Hong Kong Productivity Council initiated a cooperation project with Kuka Shanghai to adopt automation solutions in Hong Kong and the PRD. Electropac has become a new division of Mass Design, Inc. with the recent purchase of this printed circuit board manufacturer founded in 1976 in Manchester, New Hampshire. The planned takeover by former employees to form Valhalla Circuits announced a few months ago apparently was not successful.Lower growth rates, the pressure of annual double digit mandated wage increases, and the spectre of potential increases in the 15% tax rate afforded the electronics industry to the country's norm of 25% for corporations is casting a shadow on future investment in China for foreign owned EMS companies. Pressure is already being applied by the federal government onto local and regional operations that may have over-committed in past incentives to attract foreign industry. Many are trying to second guess the next "desirable" location if this occurs - even as domestic Chinese electronic manufacturing companies are ramping up their systems and their automation development activities. I believe that China's electronics industry future success will depend greatly upon automation, the use of new technology in manufacturing, improved quality, a combination of licensing of off-shore products and technology, a new-found home-grown (including Taiwanese) "innovation", and its domestic market. I remember "The Japan That Can Say No: Why Japan Will Be First Among Equals" the 1989 essay originally co-authored by Shintaro Ishihara, the Minister of Transport, who later became governor of Tokyo, and Sony co-founder and chairman Akio Morita. It was produced during the climate of Japan's economic rise. I wonder if there is any relevance to today's situation. I recall reading two versions: The first was a translation provided by a friend in the Pentagon. The second, several months later, was a slightly different less threatening version that was reportedly published in English in Japan for "public consumption" by Americans.PR NEWSWIRE states that HDI was still a main engine of growth in rigid PCB field in 2014, and is expected to maintain the momentum in 2015. As for Anylayer HDI technology increases in Greater China combined with Panasonic's withdrawal from the Anylayer HDI field, various PCB companies will expand Anylayer HDI capacity in 2015. In 2014, the company that registered the largest growth in revenue from the HDI PCB business was Taiwan's Compeq. Its customers include Apple and Xiaomi. It increased 28.3% to $690 million, one step away from industry leader Unimicron.ResearchInChina published its data’s top 20 PCB companies in the world for 2014. Industry sales totaled $59.6 billion for the year. Global Top20 Rigid PCB companies in 2014 (revenue in USD million) 1. TTM..............................(1,398) 2. Tripod..........................(1,388) 3. Compeq.......................(1,158) 4. Viasystems..................(1,028) 5. Hannstar Board..............(958) 6. Unimicron.......................(918) 7. MEIKO............................(860) 8. ZDT.................................(850) 9. AT&S...............................(838) 10. Kingboard PCB...............(830) 11. CMK................................(750) T.P.T...............................(750) 12. Chin Poon Industry........(738) 13. SEMCO............................(680) 14. WUS Group.....................(650) 15. IBIDEN...........................(630) 16. Multek............................(608) Gold Circuit Electronics..(608) 17. ISU PETASYS..................(508) 18. Unitech PCB...................(478) 19. Shennan Circuits............(451) 20. Hitachi Chemical............(420)Foxconn's PCB unit Zhen Ding Technology saw its net EPS climb to a record high of $0.29 in 2014. Reports for the CPCA show collocated with SEMI and other shows in Shanghai are mixed. Traffic was heavy, except for the last day which was devoid of prospects. The first two days had "lots of people from other shows" but contained few managers from printed circuit companies. There was an increase in products designed for automation in keeping with China's trend to move in this direction. There were also a number of vertical wet processing lines. Our contacts stated that the exhibit was huge and full of copies of specialty chemicals, materials and process equipment. They stated that they saw several "improved" Chinese equipment sets, but did not note any new major introductions. China is unusual in that it is so large with more than one manufacturing center with different cultures, that it has more than one trade association targeting the interconnect industry. It also has two major NEPCON shows, one in Shanghai and one in South China (Shenzhen). This makes it difficult for companies to reach "ALL" of its targeted markets with a reasonable budget. It also makes it easier for local companies to reverse engineer products and jump into the fray. We'll attend NEPCON in Shanghai next month which will have over 500 exhibitors covering nearly 270,000 square feet of floor space. The event will debut The Electronics Manufacturing Automation (EMA) Pavilion. Automation system integrators such as Intelligent Group Zhuhai, Robo-Technik, Nitto Denko, Apeexpress, JOT Automation, and IPTE will demonstrate their wares as electronic manufacturers attempt to stave off further flight from China by such firms as Uniqlo, Clarion, and Samsung to other countries. due to rising costs and inefficiencies of high manual labor content.Japan's Ministry of Economy, Trade and Industry (METI) released the final 2014 performance data for the electronics industry. Total domestic production for the electronics industry in 2014 was about $100 billion up 2.6% from 2013. The 3 major segments defined by the METI are consumer electronics, industrial electronics, and electronic components including ICs and LCD display panels. The consumer electronics segment dropped 15.7% from last year. Sales of flat panel TVs declined 6.1% compared to the previous year which was one of the worst years for this segment. (Japanese manufacturers now have almost zero production). Sales of digital cameras went down 30% in 2014 – most likely due to the improved cameras in “smart phones”. Car navigation systems were more than 50% of consumer electronics sales even as it declined 5.9% from last year. The industrial electronics segment had sales of $29.7 billion, down 3.1% from 2013. The electronic components segment posted revenue at $61.8 billion, up 7.8%. Printed circuit boards went down another 2.7% in 2014. One of the big questions is, "Will anyone save Sharp, once king of the flat panel display makers, and if so who?" Meanwhile, Sony which had posted losses in 5 of the past 6 years is seeing some success with its turnaround efforts. Strong sales of its image sensors and PlayStation video game consoles is helping to boost profits. Sony, in the midst of restructuring, has exited the PC business, its struggling smartphone, and TV divisions which are faced with strong competition from Korea, China, and Apple.We continue to monitor and participate in the discussions on "re-shoring", automation, and critical supply chains for domestic (U.S.) fabrication and assembly in the face of increasing global economic and stability difficulties. China has lowered its forecast 7% for the forthcoming year's growth rate. Major firms operating in the PRC (e.g., Hon Hai) continue to drive to automation. Some "off-shore" investors have moved to the interior or begun to explore other countries . Greece is resisting tightening its belt further to meet its Euro debt obligations. If it leaves the European community can another economically challenged country such as Italy be far behind? Is there a domestic supply of all critically needed specialty chemicals, components, equipment needed to produce electronic devices for medical or military applications in the U.S.? Should there be? If not, are there trusted suppliers in secure locations to provide the aforementioned materials and machines, or boards and sub-assemblies? What is there to prevent factory shutdowns and supply disruptions if the domestic suppliers are foreign owned? (Note the closure of foreign-owned copper foil maker Oak-Mitsui Technologies' Hoosick Falls, New York plant in order to move operations to Malaysia in Southeast Asia - closer to its larger customer base). For that matter, what is there to prevent a domestic company from relocating ALL of its production to a more viable (economic and/or market) site? After all, don't we engage in a free market system?What does one do if the government decides that a product is critical and the maker has already moved all the manufacturing of said item to China, or Malaysia?We should also note that there are currently sufficient domestic EMS houses to provide for production runs of medical or electronic devices. It is the supply chain of materials for bare board production, as well as the sources of components that are of concern. Counterfeit components, materials and spare parts are entirely another matter and are already the focus of a number of major activities - both private and government. - Note our Comments & Discussion page for thoughts from "an undisclosed source".See Bernie Kessler's opinion on our Comments & Discussion page. Send your comments and opinions on the above to: firstname.lastname@example.orgHong Kong added 10 names to the newest Forbes list of billionaires. It now has 55. Notable among this year’s newcomers to the Forbes roll of billionaires is electronics magnate Tang Hsiang-chien, the father of Henry Tang, a former candidate for Hong Kong's chief executive in 2012, and Tom Tang, Honorary Founding Chairman of the HKPCA and Managing Director - Asia Pacific Region of TTM Technologies since April 2010. Prior to that, he was the Executive Chairman and Group Managing Director of Meadville Holdings (Meadville), which he joined in 1991. The Tangs are investors in U.S.-listed TTM Technologies. Hewlett-Packard is selling a 51% stake in its Chinese server business to Tsinghua Holdings for $2.3 billion. The result will be a joint venture worth $4.5 billion with the investment arm of China's Tsinghua University. The new company with about 8,000 workers and $3.1 billion in annual revenues will become a subsidiary of Unisplendour, the publicly traded unit of Tsinghua Holdings. HP said that it would still fully own its existing China-based enterprise services, PC business, and other operations in China. A Chinese-language report in the Economic Daily News (EDN) states that Compeq Manufacturing's capital spending will reach than $130 million this year. The funds will be used primarily to increase capacity at its plant in Chongqing, China and upgrade its facilities in Taiwan and Huizhou, China. The PCB maker reported net profits of $14.89 million for the first quarter of 2015, up 35.6% from a year earlier. The company expects 2nd quarter revenues to increase 10% sequentially due to strong demand for smartphone and ultra-thin notebook circuits.
Israel’s advanced board fabricator Eltek Ltd. announced its financial results for the quarter ended March 31, 2015. Sales for the quarter ended March 31, 2015 were $9.7 million compared to revenues of $12.3 million in the first quarter of 2014. Operating loss for the period was $108,000 compared to an operating loss of $121,000 in the first quarter of 2014.
Asahi Glass has established a facility in China for the whole manufacturing process of glass substrates to meet the growing demands of TFT-LCD panels.
Toppan Printing will invest $20 million in Shanghai to increase its manufacturing capacity of photo masks to meet the expanding demands of the semiconductor manufacturers in China.
Shows, show, and more shows.
NEPCON China was moderately busy and boring for 2 days, then nearly silent on day 3 with nearly empty aisles and booths. The exhibit seemed "tired". Yet, nearly 22,000 attended - 5% more than the previous year. The SMT section attracted the most interest among visitors. Industry leaders like ASM, Europlacer, Fuji Machine, Mycronic, Panasonic, Samsung, Techwin, Tokyo Juki, WKK, and Yamaha all featured their leading precision technologies and introduced visitors to the world’s best electronics manufacturing solutions. Suppliers reported a fairly strong start to the year, then a sudden fall-off in April sales. - A correction? Meanwhile, China announced a forthcoming slight drop in interest rates to stimulate the economy.
There was a some excitement and new products shown by ASM Assembly which took a and dominated large corner of the exhibition hall to display its wares as it hosted a 30 table 'banquet" at the nearby Intercontinental. A large "section" of the exhibition floor was devoted to 3D AOI and spi systems by the well know pioneers and their copycat competition. It was difficult to sense any major difference in their products. Robotics and automation was a key theme of the show, but demonstrations were primarily with single station/function robots. Japan Unix's simulated robotic soldering demo enhanced by twin video presentations was interesting.
One of the most interesting automation news items at the show revolved around learning that WKKT had begun to automate its food service operations that provides more than 12,000 meals daily to the workers in its EMS campus in Southern China. Food lines in the main cafeteria will be reduced from 10 to 8. Direct labor will be reduced by eight. The food will be fresher with less waste. The system was developed by a local university and will now be offered to other corporations. . Two "pilot" lines have been running for several months at WKKT.
Prior to the end of NEPCON China in Shanghai, which followed the CPCA SEMI shows in the same city last month, we were deluged with promotions for the "sister NEPCON shows" to be held in Chengdu (June 25-27) and Shenzhen as well as CTEX* and eMEX to open as a combined show in Suzhou May 20-22, the Del Mar Electronics and the Electronics New England events to be held on opposite coasts of The U.S. May 6-7 and another 50 or so shows in Asia promoted by Reed Exhibitions. And, don't forget the EIPC June Summer Conference in Berlin as well as the 65th ECTC (IEEE Electronic Components & technology Conference) in San Diego May 26-29!
Looking to the future one should check out the display, flexible material, coatings conductors and other needs of smart watches, smart wearables, and next generation smart phones at Touch China 2015 , the 8th International Touch Screen Technology and Equipment Exhibition (for electronics) in Shenzhen June 4-7 which will also hold the 2nd International Sapphire Industry Technology Exhibition. One must wonder if this will help drive the printed electronics technologies to a new level and broader acceptance.
*A pre-show exhibitor list shows primarily Taiwan based companies, a few multinationals and many firms from the local area.
How does a trusted supplier establish its trusted suppliers of boards, components and materials?
Plexus Aerospace, Defense and Security Services has received accreditation as a Microelectronics Trusted Source by the Defense Microelectronics Activity (DMEA). This accreditation is a key part of the Department of Defense (DoD) Trusted Source Program. It officially recognizes Plexus's subsidiary as a trusted supplier of microelectronics goods and services to end users within the United States government. This program was established to assess and verify the integrity of the companies that design, develop, manufacture and distribute critical national security microelectronics components. Plexus is one of just a few companies reported to have received this accreditation.
Compeq Manufacturing's March revenues were $98 million up 20.1% from March 2014. The company's first quarter revenues were up 20.6% from last year, helped by orders from Apple
according to the Chinese language Economic Daily News.
Huawei Technologies said that strong smartphone sales helped boost its 2014 net profit 33%. Earnings were $4.5 billion on a 20.6% sales increase to $46.5 billion. Sales by its consumer group, mostly smartphones, was up 32.6% to $12 billion.
China launched three new "free trade zones" (FTZ) and announced the quadrupling of the first one established in Shanghai in September 2013. The new FTZs will be in Guangdong, Tianjin, and the southeastern province of Fujian.
PCB fabricator Unimicron Technology losses of $18.92 million in the first quarter of 2015 were more than double those of a quarter earlier. The company also reported sales of $435 million for the first quarter of 2015, down 19% from a quarter earlier and 1% from a year ago
Is it time to review your markets, goals, and position in the electronic packaging supply chain?
Opportunities abound. The overall market is huge. But, where do YOU fit?
According to Mike Buetow 's column this month in PCD&F/Circuits Assembly the EMS market reached $490 billion last year, up about 11% based largely on demand for automotive applications and handheld assemblies. This excludes captive production. Foxconn alone accounted for nearly 28% of the world's EMS business. The next 49 largest ranked companies accounted for approximately another 40% leaving the rest of the world's EMS companies a $158 billion market from which they gain their market share.
Do you know where your company’s wares fit?* Upon what do they depend (specifications, your on suppliers, compatibility with other suppliers and products used by your prospects and customers)? What are the performance requirements (standards, environment)? Who are the competitors and what are their strengths and weaknesses? What is the competitive situation (performance, cost/price, delivery system, inventory, service)? What are the requirements to maintain your position or break into a new market (with either in-kind or not-in-kind technology)? What the areas of dissatisfaction that customers/prospects have that can be exploited by improved or better supplies or a different manufacturing system? Do you need the approval or support of a major OEM (e.g., Apple, Google, Ford) to “pull” you through? Can you succeed with your product at just the fabricator or SMTA level?
What are your strategies? Long term? Short term? Will you establish new alliances and joint ventures or programs? Will you target new, improved, less expensive items for existing markets, or concentrate on developing new not-in-kind technologies? Will you focus on potentials in the new emerging wearable segments?
*Making holes conductive" in printed circuit fabrication
(electroless copper, graphite, carbon, and organic systems) accounts for a little more than 0.1% of this total. Substrates (laminates and prepregs) are a little more than 1.7% of the $490 billion.
Foxconn, with more than two dozen plants in China is planning to spend a "few billion dollars" over the next 5 years to build 10+ EMS facilities in India. China's Xiaomi has already announced their intent to build a facility there. Chairman Terry Gou said that Foxconn will work with India's smartphone maker Micromax Informatics as well as Chinese customers. The newly announced plans prompted speculation as to the reasons why Foxconn recently closed a mobile phone operation in southern India.
Leading edge (14nm) production in Texas and New York - but where are the Americans?
Samsung Semiconductor said that it will have 10-nanometer FinFET chips in volume production by the end of next year. The company showed a 12-inch wafer with what it said were 10nm FinFET semiconductors at an event in San Francisco.
Over the next 18 months, Samsung will provide process design kits and multi-die wafers for the 10nm FinFET chips. Meanwhile the company is ramping up volume production of 14nm FinFET chips in South Korea and Austin. Global Foundries will also implement the Samsung 14nm FinFET process at its chip-making facilities in New York State.
A critical moment for China?
China's growth rate is continuing to slow. Companies that once were enticed by China's welcoming incentives and low labor rates are moving out. This emigration is even beginning to include some of its "hi-tech" operations. These companies will not return. The mandated labor rate increases coupled with increased social costs and elimination of incentives to locate new operations in China will cause a further reduction in the growth rate - one that cannot be offset by minor reductions in interest rates. Increased automation may cause long range unemployment or underemployment that must be offset with new business.
The current global economic situations, currency fluctuations, work force availability pale in significance to China's power to control virtually control all major aspects of its own country including inflation. What is needed is a rapid decision to stop "killing the goose that laid the golden egg" behavior. To reinvigorate its economy it must cease the nearly 20% annual labor rate increases of the past few years.
According to an AP report, China, under President Xi Jinping, is also starting an Asian Infrastructure Investment Bank and has enlisted 57 countries to sign up. Such a venture is designed to broaden China's practice of using its state-owned companies and its workers on foreign capital projects. Britain, France and Germany, members of the World Bank and Asian Development Bank (WB&ADB) have broken with Washington and are seeking membership. The U.S. and Japan, leading shareholders of the
WB&ADB, have expressed concern over the new bank's governance standards and the types of projects it might finance
On the other hand, what countries will benefit from the never-ending search for lower manufacturing sites? The Philippines (again?)? Mexico (again?). Vietnam (too late - too busy?)? India (need for infra-structure?). Indonesia? Malaysia? Will China's emerging electronics "giants" also seek off-shore sites to compete globally?
And, what actions will the U.S. and other Western economies institute to take advantage of the opportunities? Or, are they too internally divided to recognize, let alone take advantage, of the current situation?
Jabil Circuit, Inc. has secured approval from the Penang State government in Malaysia to purchase 20 acres of land at the Batu Kawan Industrial Park to support expansion plans. The company plans to further develop the Jabil Penang facility to support the company’s growth strategy in the Asia-Pacific region.
Jabil says that it chose Penang to expand its Malaysia operations due to the local availability of highly skilled talent; the mature local supply chain, which has around 3,000 well-developed suppliers from a variety of sectors; and the region’s excellent utility services. It plans to create 2,500 new skilled jobs there during the next 5 years.
MFLEX (Multi-Fineline Electronix) reported net sales for its first quarter ended March 31, 2015 of $149.1 million, an increase of approximately 27% more than the same period last year. The company's largest customer accounted for 65% of net sales and to newer customers accounting for approximately 30%, or $45.2 million. Two of these accounted for about 27% of sales for the quarter.
Net income $9.1 million for the period compared to a net loss for the same period last year. The The company generated $20.2 million in cash flows from operating activities during the first quarter. It had cash and cash equivalents of $155.4 million on March 31, 2015. MFLEX continues to maintain a strong balance sheet with no debt.
The age of the IoM in the IoT is upon us!
Two bold quotations from John Dulchinos, Jabil’s vice president of digital manufacturing: "...the model that’s served the industry so well for decades – locating in low-cost labor regions has reached its end. We’re seeing a greater demand for higher-skilled labor, driven by the reliance on digital and advanced technology, requiring that we rethink how we deploy automation in our operations." and "At last we’ve moved beyond the traditional manufacturing robot, and are seeing real world applications today of smart, collaborative robots that deliver three very key capabilities to advance manufacturing."
TTM and Viasystems announced that the companies have received notice from the Committee on Foreign Investment in the United States ("CFIUS") that it has concluded its review of TTM's proposed acquisition of Viasystems and determined that there are no unresolved national security concerns with respect to the proposed transaction. The proposed acquisition remains subject to review by the United States Federal Trade Commission TTM expects the acquisition to close in the second quarter of 2015.
A new report states that the differential between manufacturing costs in the U.S. and China are now only 5%, thanks to the continued annual mandated wage increases in China. China has just lowered interest rates and loosened some banking regulations to spur its economy.
What do YOU think the U.S. government must do to reignite electronic manufacturing in the homeland? Do you think that it is possible given the size of the markets in China, India, and elsewhere? See Dick Otte's well-thought out remarks and Dr. Hayao
Nakahara's bold assessment on our "Comments & Discussion" page!
Send us your thoughts and comments.
What kind of supply chain opportunities will emerge for wearable electronics? Forecasters are saying that the market will surpass $18 billion in just 5 years! That number is larger than the entire current global airline industry!
They will certainly include flexible and stretchable substrates; abrasion and moisture resistant flexible as well as rigid conformal coatings; curved screens, synthetic sapphire screen covers; bendable display screens; new conductive and resistive fine screen inks; conductive fabrics; printed batteries and semiconductors; heat dissipating fibers or substrates; flexible batteries; self energizing (microbe, heat or solar driven) batteries; graphene-based filters conductors and displays; flexible printed transmitters and receivers; printed sensors (ECG); flexible conductive adhesives; reel-to-reel processing, assembly, and direct imaging equipment with better than 15 micron resolution and 2.5 micron repeatability; new test equipment - to mention just a few.
Did you know that China buys more than half the world’s semiconductors sold each year, but only produces 10% of local demand? Its government is now stating that it plans to invest up to $160 billion over the next 10 years to develop chips. The cost to build a state-of-the art chipmaking plant, which could become obsolete in just 5 years, is $5 billion. China will need foreign experience and help to succeed. In the interim, foreign chipmakers are increasing their investments to upgrade its Chinese plants and in state-run mobile chipmakers. (Source: Bloomberg Business, June 25).
Think about it! 10 years is really a very short time. The world can change dramatically in that period.
There weren't any new industry shattering products at the JPCA
show according to our colleague D. Numakura. There were, however, a few new technologies targeting specific applications. Many companies there stated that they are focusing a lot of their R&D toward the wearable electronics supply chain.
Murad Kurwa, Vice President of Engineering at Flextronics International, will present “Wearables Technology - The Next Manufacturing Wave” to the attendees of SMTA International's Evolving Technologies Summit on September 28.
Platform Specialty Products will acquire OM Group’s Electronic Chemicals and Photomasks businesses by the end of this year. Operations are expected to be merged into the company's MacDermid subsidiary.
One can only wonder if any other larger consolidations are in the offing. There aren't many possibilities left. We have been apprised of a number of smaller M&A activities on all sides of the buy-sell-spin-off-JV equation. It will be interesting to see what the electronic packaging-box build supply chains look like in 3 to 5 years. How many historic names will join those that have vanished in the last decade?
New American source for laser drills?
Nano System in New Hampshire is building a custom UV/CO2 laser for Nova Drilling Services of Santa Clara California to meet increased small via drilling requirements of its customers.
What keeps you up at night that you would like to see addressed by the IPC and the other trade associations to which you belong? Supply chain issues? Government regulations? Fewer "local" suppliers? IP issues? Lack of sufficient technical support/training by suppliers? Restoring the IPC Leadership Council and Programs of yore? How about better planning and coordination by the members of WECC to prevent schedule conflicts of its own members' major annual exhibits?
Write to us and let us know. The IPC Ambassadors are considering generating a series of 10 minute videos, each addressing one topic, that would be made available as "pod-casts" on the IPC web site.
How will Platform Specialty Products acquisition of OMG's electronic chemicals group and Alent (Alpha and Enthone) affect the industry? Alpha should provide a new substantial and stronger entry to the SMT materials market? It will certainly be a challenge to simultaneously rationalization both of the OMG and Enthone acquisitions to trim $50 million out of the combined group's annual operations as they are merged with Platform's MacDermid. Will Platform be able to power its way into becoming "the" leading supplier of the consolidating customer base? Does this make sense in view of the continued consolidation of the fabricators and EMS providers? Will it strengthen Atotech's position in Asia? Will it encourage other competitors such as Uyemura and Technic to be more aggressive?
SEMICON seemed slow this year. What was of note to me was the nearly total absence of almost the entire group of well-known specialty chemical supply chain members. No photoresist suppliers. No electroless or electrolytic plating providers. No resist developer or stripper solutions. No chemical etchants. We did see Kyzen and stopped at their booth for a chat but did not learn or see anything truly new. The show's "hot topics" seemed to center around the drive to 7 nanometer circuitry, 3D packaging, and the challenges of EUV lithography (Extreme Ultra Violet). ESI's booth focused on chemical metrology for the challenges of 10 nm and beyond. MIRTEC introduced its MP-520 3D packaging inspection system capable of measuring chip tilt, height as well as finding chips and cracks with a 0.4 nm tolerance.
There are now SEMICON events in Japan, China, South America and Taiwan. The market in the latter (September 2-4) will remain the world's largest, exceeding $12 billion for equipment and $9 billion for materials this year.
Is it time for the IPC to re-establish its leadership council and events geared to senior executives from the board and emerging technology industries? Perhaps emulating SEMI's ISS 2016 (Industry Strategy Session) would be a good way to start. A few key questions remain. "Would IPC members support this type of event? Can factious groups be brought together to achieve a sound, successful program? What specific topics would make sense? Has the consolidation of industry segments hurt or helped their future?"
Virtually all of Taiwan's and China's major flexible circuit and HDI makers are now forecasting a strong second half for 2015. Taking a longer view, Taiwan's TPCA is focusing on technology for electronic automotive automation. Yet, major equipment suppliers to the region's PCB and SMT operations are bemoaning the continued drop in orders for new production equipment. One supplier stated that one of his customers wanted to have a 20 year old system refurbished rather than buy a new up-dated version with greater capabilities - until he learned that the refurbishing would cost more than a new system, and, it would carry no warranty. We expect further consolidation as well as belt-tightening on the supply side.
IBM said, just prior to SEMICON, that it had made working versions of ultradense computer chips, with roughly four times the capacity of today’s most powerful chips.
An international consortium led by IBM is part of an effort to manufacture the most advanced computer chips in New York’s Hudson Valley, where IBM is investing $3 billion in a private-public partnership with New York State, GlobalFoundries, Samsung and equipment vendors.
This answers the question as to whether or not Moore’s Law would continue past the current 14-nanometer generation of chips. The industry is currently making the commercial transition from 14-nanometer manufacturing to 10-nanometer manufacturing.
Working samples of chips with seven-nanometer transistors have already been made using silicon-germanium instead of pure silicon in key regions of the molecular-size switches.
The new chips will provide a major challenge to EUV stepper makers and facility designers to totally eliminate any vibration during the photolithography imaging process.
They will also initiate a new round of technology roadmaps for substrate makers.
Also of note just before the show was Tsinghua's $23 billion bid for Idaho-based Micron Technology. The Tsinghua Unigroup is China's largest state-owned chip design company.
Dilemna or dilemma? Time for a tough decision in planning (and spelling)
*March 15-17 are the dates for two of our industry's major exhibits and conferences.
One is in Las Vegas sponsored by the venerable IPC, the industry's most senior trade association and the world's leading printed circuit standards generator. The U.S. now produces less than 5% of the world printed circuits (including HDI, flex and organic substrates for ICs).
The other is in Shanghai and was formerly known as the CPCA show sponsored by the China Printed Circuit Association. It has been re-named the "China International PCB And Assembly Show". It will be co-located with SEMICON China 2016, Electronica & Productronica China, and Laser World Photonics China. "Greater China" produces more than 75% of the world's printed circuits. The majority of this output is made by offshore (including American and Taiwanese) transplants. The world's largest Cu-clad laminators are in China. The greatest portion of specialty process chemicals is made in Asia. Expo Electronica in Russia is also held on these dates.
SMT/Hybrid/Packaging and Nepcon China also clash on April 26 – 28.
*The other major PCB events are Productronica (Munich Germany, November) the International Printed Circuit & Apex South China Fair 2015 (Shenzhen China, December, jointly produced by the HKPCA and the IPC), and the JPCA Show (Tokyo Japan, June).
How does this affect YOU? Most manufacturers of equipment can only afford to have one set of demo equipment, which is constantly travelling from show to show. It can take a month to move a piece of production equipment from one country to another, by the time that shipping, paperwork, customs, etc. are arranged. By spreading equipment and manpower across so many different countries and venues, visitors are less likely to see the latest equipment or be able to speak to the senior personnel as the latter can only be in one place at one time.
Which event will YOU attend, and why? Check out the responses on our Comments and Discussion page !
China's Xiaomi has teamed up with Foxconn to start assembling phones in India, to cut costs and grab a bigger slice of the world's third-largest smartphone market. India is the world's fastest growing smartphone market, but lacks good suppliers and infrastructure. It has more than 100 different phone companies which imports most heir smartphones from China and Taiwan. The first phone produced this month was the Redmi2 Prime priced at $110, an India-specific upgrade to its best-selling Redmi2 budget smartphone.
Panasonic has started to market a curved touch screen for automotive applications.
The Taiwan Printed Circuit Association (TPCA) is forecasting a PCB increase of just about 1.5% for 2015 due to a decline in demand for PCs. smartphones and notebook computers. Total production value for the year is estimated to total $17.6 billion.
Mitsubishi Chemical has introduced a see-through organic solar film.
As the world's markets continued to tumble and stumble late in August, China once again took action to attempt to shore up its economic plight by reducing bank reserve requirements by 1/2 a percentage point while its central bank cut interest rates by 1/4 of a point. The People's Bank of China also removed the ceiling on most bank deposits. Meanwhile, many of China's electronic supply chain participants continued to scramble in the face of reduced exports and higher costs.
Times have certainly changed! I never thought I would see the day when one of the world's most monolithic societies would elect a foreigner (gaijin) to the Board of Trustees of one of its trade associations.
Congratulations to Julian Bashore, Managing Director Japan of MacDermid Electronic Solutions, upon his election to the *JPCA's Board of Trustees. Bashore will join executives from such firms as Fujitsu, Ibiden, Meiko, and Nippon Mektron for a two year term.
*Japan Electronics Packaging and Circuits Association.
It’s almost "official "
The U.S. is now competitive with Chinese manufacturing according to the Boston Consulting Group (BSG). It is now barely cheaper to produce goods in China in the U.S.
The New York Times reported that the BSG says that manufacturing wages adjusted for productivity have nearly tripled in China over the last decade, from $4.35 an hour in 2004 to $12.47 in 2014. Meanwhile, U.S., manufacturing wages adjusted for productivity have risen less than 30 percent since 2004, to $22.32. However, these higher wages are offset by lower costs for energy and raw materials.
The net result is that the total cost to manufacture goods in China for every $1 required in the U.S. is now $0.96. Boston Consulting also states that the U.S. is becoming more competitive with other nations as well. It now costs more than $1 to manufacture goods in Korea for every $1 required in the U.S., and between $1.10 and $1.20 in Canada, Sweden, Japan, and the Netherlands. Further, for every $1 required in America, it costs between $1.20 and $1.30 to manufacture goods in Germany, Italy, Brazil, Belgium, France, and Switzerland. Only India and Indonesia of the “major nations” now cost less than $0.90 to produce products for every $1 needed in the U.S. , and India, with a large domestic market potential, still seems to lack the infrastructure needed to support “major” electronic manufacturing.
Does this make the U.S. truly competitive? Not when taxes, regulations, and lack of the requisite skilled educated labor pool is considered.
DKN Research reports that that sales of rigid printed circuit boards from Taiwan companies (Taiwan and China production) declined in April an May and now register a double digit decline from the same period last year.
"Equipment manufacturers and printed circuit manufacturers there released pessimistic forecasts for the second half of the year. They blame their pessimism on slow sales from personal computers, and they expect a negative growth from Tablet PCs this year." DKN believes that the business trends for Taiwan's printed circuit industry represent the global market trends for consumer electronics. For this reason, DKN does not have an optimistic outlook for the consumer electronics industry this year.
Advanced Semiconductor Engineering (ASE), the world’s largest chip packager and tester, yesterday said its revenue growth would slow this quarter. ASE just posted net income of $116.8 million, down 18% quarter-on-quarter and 28.5% from the previous year.
“At best, the situation in the first half can be described as an environment filled with mixed messages,” ASE chief operating officer Tien Wu said, citing a downturn in the PC industry and tight inventory controls in the semiconductor supply chain.* The company forecasted limited growth of 1%-5% for the 3rd quarter for its core integrated circuit assembly, test and material (IC ATM) business. This quarter, ASE’s EMS operations should increase 7%-8% from last quarter with a slight decline in gross margin.
*I wonder how much of the "mixed message" was really due to the Apple Watch's below break even level of 2 million units per month during the 2nd quarter. ASE uses SiP process in order to fit all the components and circuitry into the "watch's small space.
Recent major semiconductor IC industry consolidation activity
NXP is buying Freescale for $16.7 billion, Avago is buying Broadcom for $37 billion, Intel is buying Altera, GlobalFoundries was paid over $1B (by IBM) to "buy" IBM Microelectronics, and China's Tsinghua bid $23 billion for Micron Technology.
Did you know that fewer than 20% of the independent printed circuit fabricators in the U.S. are members of the IPC? Did you know that the IPC now has more "foreign" members than domestic ones?
One has to wonder what value those off-shore interconnect firms see that the American board fabricators do not see. Is it because OEMs and EMS enterprises now view the PCB as a commodity? Is it because the IPC is not perceived as offering board builders much more than standards - or as much as the HKPCA and TPCA offer their PCB fabricating members? Is it because no independent fabricators are on the IPC board of directors to represent their needs? Is geography the issue? Is it the rapid change of technology? Is it because the cost of keeping processes and the factory floor up-to-date is too excessive? Is it the squeeze on bare board margins? Is it because contract manufacturers (and OEMs) just view the bare board as a component that amounts to only 5% to 7% of the final assembly? Is it due to industry consolidation? Are regulatory burdens part of the problem?
What do you think? Is there a solution? Should there be a solution? What do YOU recommend? Write and tell us! Let your voice be heard!
Not even heavy downpours could not keep the crowds from the opening of the Design2Part show in Marlborough, Massachusetts on September 30. This year's event contained a number of EMS companies as well as both of the two prevalent 3D printer technologies (equipment sales as well as manufacturing services). More than 10,000 3D printers were said to now be in place in industrial operations in North America.
A number of the contract manufacturers (mostly small and medium sized) were Mil Spec and medical supplier approved. These had learned to place the "super small" chips (e.g., chip resistors down to 0.024"L x 0.012" wide)that we are encountering more frequently.
The 3D folks are still focused on prototypes and short runs as the construct time is still very long per part (some were 10 or more hours). The process that melts plastic wire to build parts is still primarily restricted to thermoplastic resins (e.g., nylon, polycarbonate, etc.). The system that uses a laser to melt the material for part build-up can also process some metals (powdered) as well as thermoplastic resins.
Initial reports state that the SMTAI in Rosemont, Illinois event opened with good attendance. A lot of machinery was on the exhibit floor. The IPC (and other) meeting rooms were full. And, most notably, the retirement party for JoAnn Stromberg (who has guided the SMTA since its inception) was packed!
As I predicted
TTM Technologies will close three manufacturing plants and lay off 550 workers as part of a global integration plan following its June $927 million acquisition of Viasystems in June. The Juarex, Mexico plant will be closed, two facilities in Silicon Valley will be consolidated into a single operation, and a Cleveland facility will be merged into one in North Jackson, Ohio.
Taiwan's Chin-Poon Industrial announced that its August consolidated revenues increased 18.5% from a year earlier to $60.7 million. More than 70% of its sales come from the auto industry.
It is noteworthy that China's President Xi Jinping stopped in Seattle to meet with American business leaders and 5 state governors BEFORE going on to meet with President Obama in Washington, D. C. On the first day of the visit, after announcing ing a new deal to work on clean energy, TerraPower, an energy company founded by Bill Gates, entered into an agreement with China National Nuclear Corporation to work together on next-generation technology for nuclear power plants.
China invested a record $83 billion in renewable energy last year, according to the Frankfurt School's Center for Climate and Sustainable Energy Finance in Germany.
Intel Capital announced from Beijing that it is investing $67 million in eight Chinese startups. It is the latest investment pledge from a U.S. technical company showing support for China’s domestic technical industry ahead of Chinese President Xi Jinping’s first state visit to the U.S. It follows Dell’s pledge to spend $125 billion there over the next 5 years.
Intel’s new China investments include Ninebot Inc., the Xiaomi backed scooter startup that acquired Segway in April, chip design firm Telink Semiconductor, and electronics makers Bluebank Communication Technology and Shenzhen Hampoo Science & Technology.
India’s premier Narendra Modi met with top Silicon Valley executives a few days after Chinese President Xi’s visit to Seattle. Modi spent several hours on Saturday talking to U.S. technology heavyweights that he believes can connect with *India’s technology start-up environment. Several of the leaders Modi met (e.g., Microsoft’s Satya Nadella, Google’s Sundar Pichai, and Adobe’s Shantanu Narayen) were born in India. Modi’s goal is to motivate India’s large and successful ex-patriots population to contribute to their home country’s development. Others on his schedule this trip included John Chambers of Cisco, Tim Cook of Apple, and Paul Jacobs of Qualcomm.
NOTE*The Indian Space Research Organization just had a successful launch of the country's Multi Wavelength Space Observatory, ASTROSTAT.
More than 1,900 PCB designers, fabricators, and assemblers attended PCB West 2015 in Santa Clara. More than 100 companies exhibited their wares on the sold out show floor, while more than 30 designers underwent IPC certification during the UP Media Group sponsored event.
MIT has joined the $171 million consortium on manufacturing flexible electronics. It is one of several universities in Massachusetts that will support a new federal initiative to boost manufacturing innovation in the area of flexible hybrid electronics (FHEs). It will work closely with the University of Massachusetts at Amherst, the leader of the Massachusetts node of the collaboration, to support the Department of Defense funded Manufacturing Innovation Institute for Flexible Hybrid Electronics. The effort will be managed by FlexTech Alliance, a non-profit research and development group based in San Jose, California. The funding is composed of $75 million in federal grants and $96 million in private contributions. Boeing and General Motors are amongst the members of the consortium.
Ye Gads! Will it really be possible for most assembly houses to comply with the new EU Court of Justice ruling on Article 33 of Regulation No 1907/2006, as amended about the calculation of levels of substances of very high concern (SVHCs) in articles under the Registration, Evaluation and Authorization of Chemicals (REACH) regulation?
The ruling says that producers must calculate the levels of SVHCs (substances of very high concern) in their products at the level of the "simple" article, rather than at the aggregate level of the "complex" article that is currently being used.
This means that manufacturers must understand and report the presence of candidate list SVHCs (the current count is 163) at a much lower level in their products than they generally currently do. This will require far more work, effort, and cost. So rather than disclosing only if the level of an SVHC is above 0.1% by weight of your entire product, you must disclose its presence for each wire, cable, plastic casing, etc. that contains it above 0.1% by weight.
First bare boards, then SMT, and now....
A new all-encompassing approach
Back in the day...
I remember that, decades ago, the IPC sponsored a trade mission to China. Led by Ray Pritchard, it included meetings with the local trade association, several factory visits, a trade show, and an optional added tour. It was attended by a number of fabrication executives of the smaller and medium sized "shops". They apparently learned little, took no notable positive defensive or aggressive strategic actions upon their return. As a result, most of the attending companies (Printed Circuit Corporation, Beaver Brook Circuits, Circuitwise, Velie Circuits, - and others) no longer exist. The lessons to be learned were not!
The industry has changed since those "pioneering" days. The center of gravity has shifted. Consolidation within the entire supply chain has driven margins down severely. It is more difficult to introduce new products. It is even more difficult to gain traction once a product has been "proven". Yet opportunities abound in wearable electronics, automotive electronics, power generation, as well as storage and distribution. It will take a new outlook, strategy, and reset of goals to partake in the potential successes. It will take an open mind and innovative business approaches to thrive in the new world of manufacturing electronic devices. The IPC Ambassadors Council has proposed a number of actions that could increase the successes of its members. STAY TUNED!
Dr. Jin Zhang, President of PhiChem Corporation* announced that PhiChem has been accepted as a member of Underwriters Laboratories (UL®) Standards Technical Panel (STP) for Printed Wiring Boards STP796, which covers standards UL746E and UL796. UL746E is the UL Standard for Polymeric Materials – Industrial Laminates, Filament Wound Tubing, Vulcanized Fiber, and Materials Used in Printed-Wiring Board, while UL796 is the Standard for Printed-Wiring Boards. An STP is made up of qualified member companies that have a common interest or stake in maintaining particular standards. These companies are entrusted to manage changes in these standards under the chairmanship of the UL.
*Gene Weiner is Chairman of PhiChem's Advisory Board.
Advanced Semiconductor Engineering announced the official inauguration of ASE Embedded Electronics Incorporated, a new joint venture (JV) with TDK Corporation. The new JV will manufacture IC embedded substrates using TDK’s SESUB® (Semiconductor Embedded in SUBstrate) technology. The venture’s new facility will be located in the Nantze Export Processing Zone, Kaohsiung City, Taiwan. ASE’s System-in-Package (SiP) solutions plans to use the SESUB technology in a wide number of applications including PMIC, sensors, and RF tuners.
Smart phone makers such as HTC, Xiaomi Technology, and Asustek Computer are demanding that its component makers (including PWB suppliers) lower costs for parts that go into slim margin products.
China's government has just approved a new 5-year plan as its central bank cut both interest rates and the reserve-requirement ratio for banks, in a bid to revive slowing economic growth. Does your company have a 5-year plan? Do the key members of your supply chain have one? Is it shared with you? Do you share yours with them? Does you belong to a trade association that has one which includes your company's interests? Does your company participate in events that makes your needs known to your elected representatives? If not, you are allowing others to shape your future - or lack thereof.
Will we see the former c-level executives of Platform (MacDermid), Isola, OM Group, IBM Microelectronics, Alent, et al re-emerge? If so, a few will probably appear as Members of the Board or senior executives in operations seeking to grow in rapidly changing, difficult competitive global environments where new niches are cropping up. Others will migrate to the boards of smaller companies seeking to add a "big resume" to their boards. Few will go quietly and fade into the sunset.
From the EIPC
A new material developed at UNSW that can store digital information and be printed onto various surfaces, could be used for memory cells in next-generation, large-scale printable electronics. The material, made from the rare earth mineral cerium oxide, is comprised of tiny cubes that are roughly 10 nanometers thick, or about 10,000 times smaller than the thickness of a sheet of paper. When placed in a solution and deposited onto a conductive surface via ink-jet printer, the cubes self-assemble: first they form a coordinated square array, then they stack on top of each other like Lego, building up layer by layer. This is a next-generation memory technology that requires less voltage, consumes less power and can write/erase information faster than conventional memory devices. It is a memory ink that could revolutionize data storage in printed electronics.
As the worm turns
Hard on the heels of news that a Chinese company is buying Western Digital and loosening its restrictions on Western's merging activities with a newly acquired Hitachi operation, we learn that Western Digital is buying SanDisk. I guess that means that China will soon own both industry leaders and have a firm grip on a major segment of the world's memory business! My friend's granddaughter in Arizona is now learning Mandarin in elementary school. I think that is a good thing.
Reshoring/repatriation of PCB fabrication from Asia to......Europe?
They say that imitation is the sincerest form of flattery. As keynote speaker at the UK's Institute of Circuit Technology Hayling Island Seminar last month Spirit Circuits MD Steve Driver gave a keynote speech on the Reindustrialization of Europe using his LED substrate business as an example. He said that his customers "wanted them cheap and quick." He had been successfully using Chinese suppliers for years, but costs, especially freight, were an increasingly large part of his landed costs so he decided to source closer to home, but in a lower cost area than the UK. His search for a site wound up selecting Romania for a variety of reasons beyond just lower labor costs.
He plans to have Europe's first fully digital PCB factory (highly automated) operating there in 2017 - noting that "the Americans got there first," referencing Whelen Engineering's recent accomplishment in New Hampshire. Driver predicted a resurgence of captive shop PCB manufacturing due to this new, now proven, approach.
Trade associations are not immune to consolidation
SEMI announced that FlexTech Alliance has become the first SEMI Strategic (Association) Partner, a form of inter-industry cooperation. In this partnership, FlexTech will continue to pursue its mission of fostering the growth of the emerging flexible, hybrid and printed electronics industry as part of SEMI, the global industry association advancing the interests of the worldwide electronics supply chain.
Who will be second?
SEMI is strengthening its position in the flexible, hybrid and printed electronics sector by more directly engaging with a new set of companies and R&D organizations, and leveraging an experienced team dedicated to this emerging industry. FlexTech’s activities of R&D programs, the annual Flex Conference, workshops and webinars in the flexible electronics market expect to gain improved reach through SEMI’s global platforms.
China's Unisplendor agreed to pay $3.8 billion - a 30% premium - for 15% of hard drive maker Western Digital. Uniplendor is a subsidiary of Tsinghua Holdings which is controlled by the Chinese government. This past May the company bought a 51% stake in Hewlett-Packard's Chinese server company H3C Technologies for $2.3 billion. The U.S. Committee on Foreign Investment has not yet approved the Western Digital deal. Note that Tsinghua had a failed bid on Micron Technology earlier this year.
California-based electric car automaker Faraday Future, backed by billionaire Chinese investor Jia Yueting who is the founder and CEO of the holding company LeTV, announced plans Wednesday to build a $1 billion plant near Las Vegas. Faraday has said it hopes to bring a vehicle to market as early as 2017 and plans to unveil a concept car in January ahead of the Consumer Electronics Show in Las Vegas.
The HKPCA published "2014-2015 Hong Kong & South China PCB market Survey Report" (2015 Edition). This affordable report is chock full of valuable information and is a "must read" for anyone involved in China's interconnect industry.
Japan's economy contracted 0.8% on an annualized basis in the 3rd quarter, This was the second consecutive quarterly decline.
Consumer spending remained soft. Businesses reduced investment during the quarter.
The German industry association ZVEI PCB and Electronic Systems reported that German PCB manufacturers October sales declined 1.7% compared to October 2014.
PCB and IC substrate maker Unimicron Technology will spin off its rigid-flex PCB businesses into a wholly-owned separate company effective on December 1, 2015. The spin-off will not affect the parent company's net worth and earnings, it said in a company filing with the Taiwan Stock Exchange (TSE). The company also disclosed it is participating in the formation of a joint investment business initiated by Siliconware Precision Industries (SPIL). In a separate company filing with the TSE, Unimicron said it has subscribed to 20 million shares of the new entity for a total of $30.5 million. SPIL previously announced it has reached an agreement with three other Taiwan-based chipmakers including United Microelectronics (UMC), King Yuan Electronics Company (KYEC) and Sigurd Microelectronics to form a joint investment entity which will be engaged in making investments in semiconductor companies listed on the TSE. (Source: DIGITIMES, Taiwan)
Even as thousands of visitors attend Productronica in Munich, we have initiated final preparations to attend the HKPCA-APEX event in Shenzhen China, and begun preliminary activities for the CPCA event (collocated with Productronica and SEMICON Shanghai) in March. Now we have just received a reminder that NEPCON Japan 2016 (January 13-15) will have 2,230 exhibitors.The 45th presentation of this event has "bundled" 6 shows together including: 45th INTERNEPCON JAPAN, 33rd ELECTROTEST JAPAN,17th IC PACKAGING TECHNOLOGY EXPO,17th ELECTRONIC COMPONENTS & MATERIALS EXPO, 17th PRINTED WIRING BOARDS EXPO, and 6th FINE PROCESS TECHNOLOGY EXPO. Colleagues that attended last year's collection in Tokyo related that it was impossible to adequately cover the show unless one had a team with specific assignments.
We wonder if any companies wish to assign coverage of any of the leading shows or portions thereof to an outside consultancy.
Counter to the general trend of board makers
Taiwan's Compeq Manufacturing reported consolidated revenues of $154.7 million for October 2015 which provided it with a gain of 46.5% on year. The company has now achieved record high months 4 times in a row.
Our associates from around the world have landed in Munich to attend Productronica. We look forward to learning about what new technology and approaches they will find. Mutracx's new owners will display their inkjet system that has received so much publicity in its initial production trials at Whelen Engineering. Rainbow will debut its new "singulation" system that allows its photo resist technology to be used with current direct digital imaging processes. AIismalibar will show FASTHERM their newest high technology insulated metal substrate designed to achieve a faster thermal transition from the LED thermal pad to the heat sink. Electrolube will introduce a new 2-component hydrophobic conformal coating with excellent salt spray and chemical resistance with a range of thermal resistance of -40 - +100°C. Vi TECHNOLOGY will debut its new 3D AOI system. The K Series 3D will also be made available as a cost-effective 3D AOI upgrade to existing 5K, 7K, and 9K systems.
In all, 1,188 companies will exhibit at the show.
The start of a new era?
Historic Singapore handshake Saturday November 7, 2015 by President Xi (right) and President Ma could be the start of new levels of closer ties and non-political (commercial and cultural)cooperation between the two sides.
It's not just electronic manufacturing, aluminum is next!
For 127 years Alcoa aluminum used in everything from beverage cans to airplanes, once making it a symbol of U.S. industrial might. Now, with prices near six-year lows, it’s closing 30% of domestic operating capacity. Harbor Intelligence estimates that if prices don’t recover, almost all U.S. Al smelting plants will close by next year. For more than a decade, output has been moving to where it’s cheaper to produce: Russia, the Middle East and China. A global glut has driven prices down by 27% in the past year, making American operations unprofitable and accelerating the pace of the industry’s demise. Aluminum is down 19 percent this year. The metal touched $1,460 last week and most American smelters can’t make money when prices are near $1,500. While output has been moving abroad for some time, the game changer in the past year has been the domination of China, where ballooning output has compounded a global surplus and driven prices so low that Bank of America estimates more than 50 percent of producers globally lose money. China probably will account for 55% of global aluminum production this year, up from 24% in 2005.(source Bloomberg News)
There were 380 participants (up 5% from 2014) occupying 1,400 booths at the TPCA show held in Taipei October 21-23. There were 3 new additional theme areas added to the show in response to the market trends: "Flexible and Printed Electronics", "Smart Automation" and "Taiwan International Surface Treatment Showcase."
Taiwan's Vice President Wu (8th from the left) opened the show with a welcome speech. (Photo courtesy of TKK)
Taiwan Kong King (TKK) signed an agency agreement on the 2nd day of the show with Philoptics Co., Ltd. , a Korean supplier exposure systems, automatic cut sheet laminators for dry film resist, and laser cutting systems for glass sheets.
Traffic at the show was moderate as reports for PCB and SMT equipment sales and materials was reported to be slow - except for suppliers to Apple (Foxconn Technology).
Business outlook for bare board fabricators remains poor from greater China to Germany.
Is bundling the next step to stem shrinking margins and increase profits?
A continued slow-down of motherboard demand in China next year will continue to squeeze margins and drive smaller brands such as Jetway, Jwele, M-One, and Topstar out of the market according to Taiwan's Digitimes. Meanwhile, several leading producers will seek to increase profits by taking advantage of the AMD-ATI merger to bundle its CPUs with less expensive ATI chipsets to compete with Intel in the OEM PC segment.
2015 will be remembered as the "year of the deal"
Global M&A activity totaled more than the prior 5 years combined ($3.5 trillion - more than $125 billion in just the semiconductor industry). Specialty chemical companies merged or announced their intentions to do so to form a few powerhouse supply-side giants for the interconnect industry. Merger mania joined several of the largest fabricators to form the biggest board house. Smaller operations began to really feel the pressure to change to survive - but in what ways? It is the year that redefined the industry as smart IoT "broke out", automotive electronics began to surge, and printed electronics may have found a new route to success through wearables.
Meanwhile, another major change to be noted that will affect the future is China's renewed national investment policy and funding designed to generate greater self-sufficiency Rogers Corporation sold Arlon Electronic Materials to CriticalPoint Capital LLC. CriticalPoint is an investment firm based in Southern California. It focuses on companies with revenues less than $100. Arlon EMD will continue to operate out of its Rancho Cucamonga location.
Unimicron Technology’s Board of Directors has approved plans to budget $152.9 million in capital expenditures (capex) for 2016. Its capex exceeded $300 million in 2013 and 2014, and is expected to total $300 million this year, too. The PWB and IC substrate maker reported net profits of $4+ million for the third quarter of 2015, ending a run of three losing quarters in a row. Unimicron is “reported” to be one of the any-layer HDI board suppliers for Apple’s next generation of iPhone.
Unitech president Hsu Cheng-hung stated that any-layer PCB demand for auto and IoT applications will rise in 2016. This will help offset declining demand for smartphones circuits. He stated that the company will expand its production capacity for any-layer PCBs by 10% at its Yilan site during the next quarter. Any-layer PCBs account for 25% of Unitech's total revenues and HDI boards account for 40%. Unitech’s capex will exceed $45 million in 2016.
A fire broke out at Tripod Technology's Taoyuan facility on December 21. The facility is dedicated to the manufacture of PCBs for optoelectronic, notebook and memory module applications. It is not expected to impact any of Tripod's shipments or schedules, according to a report in DigiTimes. The Taoyuan facility accounts for just 3% of Tripod's overall production capacity The company's other facilities will make up for the production shortfall caused by the fire.
According to IPC 's 2015 Analysis and Forecast for the North American PCB Industry report the North American printed circuit board (PCB) market is expected to improve in 2015 and grow modestly through 2017 following declining sales for the past four years. The drop to 5% of the world’s production, primarily in rigid boards, was not offset by strong increases in flexible circuit demand of the past 3 years.
The final passage of legislation in the U.S. to permanently extend the R&D tax credit will benefit the chip and board business in America providing continued incentive for innovation "at home. It should greatly benefit the semiconductor industry which spends about 20% for its revenue for R&D.
The global automotive PCB market size to grew approximately 6.5% this year to more than $5.2 billion.
The International Printed Circuit & APEX South China Fair held in Shenzhen was crowded from the opening day into the final morning. Its record number of 531 exhibitors occupying 51,000 square meters with 2,379 booths spilled over into a 3rd hall. Final attendance exceed 40,000. Though business has slowed and the future uncertain there was a high level of energy with both the exhibitors and those seeking information on new and improved products as well as systems for automation. It was interesting to see the proliferation of direct digital imaging systems (mostly LEDs). We counted over a dozen.
As expected, we did not find much that was dramatically new, but there were many improvements. One of the offerings of great interest in this day of increasing flex manufacturing was the horizontal reel-to-reel processing equipment shown by Grown's Electronic Technology Co., Ltd. of Shenzhen. The 10+ year-old company's automated un-wind/wind system appeared suitable for many applications including coating, dry film resist lamination, plating and etching.
Orbotech’s booth was busy, as usual. The company showcased its recently launched Orbotech Diamond™ 8 Digital Imaging mass production system for solder mask. This product joined the recently introduced, high accuracy Nuvogo™ 1000 DI system for flex solder mask applications. Also on display, running live demonstrations, was the Sprint™ 200 Legend Inkjet Printer system capable of providing 95 prints per hour of white legend ink. The company also demoed a new laser repair station, the Ultra PerFix™ 120 , which removes excess Cu defects to improve yields.
Many attendees were seeking information on new industry directions as increased costs and overcapacity have initiated a migration of fabricators of lower tech boards to lower cost areas. Great interest was expressed in the next generation of wearable electronics which gave a boost to new equipment and materials as well as processes for flexible circuits and displays. We believe that continued drive to put more on a chip, new stacked chip designs and packages indicated future growth for packaging than for circuit boards in the immediate future - even though global purchases for semiconductor equipment has slowed in recent quarters.
Some fabricators from the "Western World" faced with the need to recapitalize (and digitize) their outmoded equipment of the 1980's and 1990's bemoaned the fact that they could not readily see what was truly available "back home" nor could they find "local support" for some of the offerings shown in China. The cost of updating and modernizing was also stunning to some. Other board builders from the U.S. Midwest were seeking ways of buying photo imageable solder mask, primary imaging resist, and Cu-clad laminates directly from Chinese specialty chemical and material companies - at a lower cost than is currently available from more "conventional" sources. The ‘Smart Automation Pavilion’ focused on the developments of Industry 4.0. It fit well with the show's global theme. It demonstrated how automation can improve production efficiency and quality, virtually making a factory system competitive anywhere in the world.
Hall 2 (and Hall 3 filled with overflow from Hall 2) had many Chinese specialty chemical suppliers showing what appeared to be replicas of the "standard" products of DuPont, MacDermid, Taiyo, Atotech, Dow, etc. Stories were told of some of the mid-size to larger American fabricators buying Chinese made solder mask, dry film photoresist and other supplies at lower costs than could be obtained in the U.S.
HTC and Huawei both are expected to launch their respective new smartphones in the first quarter of 2016, according to a Chinese-language Economic Daily News (EDN) report. Both will have large display's. The new HTC One X9 will also have a 13 megapixel camera with image stabilization. Is there a problem?
Chinese smartphone maker Meizu’s shipments will reach over 20 million units this year, up over 350% from 2014. Vice president Li Nan stated that Meizu will shift its focus to improve user experience and satisfaction in 2016 instead of boosting sales. He said that Meizu will to ramp up its smartphone shipments by 25% to 25 million units in 2016. He also stated that the company looks to make a breakthrough in high-end models.
From a colleague at SEMICON JAPAN
The hottest topic of discussion at SEMICON Japan 2015 was the IoT (Internet of Things) with new applications for sensors (such as a 3D sensor), CCD module, RFID, big data management (such as the Cloud), smart robots, driverless cars, and Pepper (a "smart robot" - with a heart) - already on sale! Technology talk at SEMICON included 3D wafer level system integration, copper through silicon vias (TSV) formation, wafer thinning, thin wafer handling, TSV-interposers with high density redistribution and assembly, interconnection technologies, and SIPs (Systems in a Package). Also discussed were FOWLP (Fan Out Wafer Level Packaging) and PLP (Panel Level Packaging). These will grow in use due to increasing multifunctional demands. As a result more circuits will be designed into the chips eliminating the need for some PCBs. Apple is reported to already have approved this technology for their A10 project (I-Phone 7). TSMC is one of the suppliers already qualified by Apple. ASE, UMTC, Uni Group (China), and Samsung are all reported to be trying to get approval by Apple for this technology and application.
The global automotive PCB market which was approximately $4.96 billion in 2014 is expected to grow by 6.5% to $5.28 billion this year. The overall global PCB market of roughly $60 billion last year will achieve an estimated growth of 0.8% this year.
CCL supplier Isola and Semico Research, a semiconductor marketing and consulting research company, have teamed up to launch Boards, Chips and Packaging: Designing to Maximize Results.
This new industry event will span the system-level ecosystem to address the roles of system architectures, board design, chip design, package design and final fabrication and assembly processes for hardware product development. The one-day conference will take place on October 13, 2015 under the auspices of Semico's IMPACT Conference series at the Computer History Museum in Mountain View, California.
This month SEMI will lead a delegation of international microelectronics industry executives to Hanoi to explore growing opportunities in Vietnam's emerging electronics industry. The Ministries of Science and Technology and of Information and Communications as well as representatives of high-tech park developments will discuss semiconductor manufacturing investment and expansion plans as well as "incentives" with the visitors. Registration for the SEMI Vietnam Business Mission is now available through SEMI. It is noteworthy that due to rising costs a number of PCB companies have pulled up stakes in China and moved to Vietnam or selected Vietnam for future expansion.