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January 2016
A challenge - looking forward to 2016 and beyond
Are you ready for rapid changes in global manufacturing shifts? Are you prepared to seize opportunities arising from new innovations? Are you part of the current mega-merger
trend running through the entire interconnect supply chain? Are larger customers and prospects by-passing you because they are uncertain of your future and sustainability? What are your plans
for the future? Have you modified your goals (markets, financial, business, products, services)? Is your factory and its equipment aging and outmoded? Have your suppliers vanished? Has the
technical support once provided to you diminished or disappeared? What are your plans to compensate for changes in YOUR supply chain? Are you having difficulties in gaining the attention
of prospects for your innovations because you are too small or too new? What type of support (supplier, customer, trade association) do you think that you need to grow? What ideas do you have
for the future?
Will Taiwan's election of Tsai Ing-wen as its first female president reverse the tone (and cross straits investments and trade) set by the recent handshake between Taiwan's former
President Ma and China's President Xi in Singapore last month? Tsai's pro-independence party also gained its first majority in the national legislature, rejecting the China-friendly party that has
ruled Taiwan for eight years. Tsai promised to reverse Taiwan's technical sector downward value trajectory of the last 9 months. Taiwan's electronic exports have been declining since
February and its GNP contracted partly due to woes in the electronic sector.
Small and medium sized companies are critical parts of the electronic supply chain in China, too!
China's Ministry of Industry and Technology will set up a $30 billion fund in partnership with Ping An Bank to support the country's electronic supply chain. This follows the recent
factory closings of a number of small and medium sized enterprises that supplied major OEMs such as Huawei and ZTE. This new fund appears similar to the one established 2 years ago to increase the
size and technology level of the country's IC industry. The latter has been used to buy foreign chip companies and invest in foreign semiconductor technology.
Philip Carmichael, President of the IPC in China, will lead a Chinese delegation of 45 to the IPC APEX EXPO in LAs Vegas in March. It will be composed of 60% assembly (SMT) people, 20%
printed circuit fabricators, and 20% equipment and material suppliers.
Gartner forecasts a decline in global purchases of semiconductor equipment in 2016 of 4.7% to $59.3 billion before rebounding to $63.6 billion in 2017 and $69.2 billion in 2018. Capital
equipment spending in 2014 was $64.6 billion and $62.3 billion last year.
More than 540 companies exhibited at SEMICON Korea in Seoul. South Korea is expected to spend more than $8 billion for front end fabrication equipment this year making it the 2nd
largest fab market in the world. Materials purchases are expected to top another $7 billion in 2016.
The following may be of help
Are you an independent board fabricator that feels overwhelmed by the industry consolidations? Do you need a new approach to improve your competitiveness? Do you need a way to better access
large potential accounts? How can you gain visibility for your unique capabilities? How can you find working partnerships to develop new products? How can a smaller company wade through the
tremendous maze to gain government contracts?
What is the single most important thing YOU need to help YOUR business succeed in 2016? How can a trade association help fill these needs? How can an IPC membership help you face the
challenges of 2016 and beyond? Come to the IPC’s Town Hall Meeting at the IPC APEX EXPO show in Las Vegas in March 2016 and find out. Ask your questions. Tell IPC what they can do to help YOU
succeed. Contact Tracy Riggan (TracyRiggan@IPC.org) or Sanjay Huprikar (SanjayHuprikar@IPC.org) if you have further questions about this special event or visit www.apexexpo.org for more
details.
Send us your comments. Share your thoughts. Perhaps together we can find some new solutions and opportunities.
There was a time when companies in the U.S. comprised a significant part of the world's production. The members of its domestic supply chain spread their technologies throughout Asia and Europe by seeking out and responding to distributor organizations. Now that the PCB center of gravity (both fabricators and suppliers) has shifted to the Far East it may be the time for those still building and assembling boards in America to reverse roles in their supply chain structures to remain relevant. Do NOT count on re-shoring to help you! A recent report , the A.T. Kearney U.S. Reshoring Index shows that in 2015 it declined in the U.S. for the 4th year in a row. The German PCB manufacturer GGP Schaltungen GmbH applied on JANUARY 4 for insolvency proceedings to begin. "GGP continues to produce and deliver without restrictions and our customers and suppliers have already assured us of their full support", said Thomas Peters, CEO of GGP, on January 7, 2016. A company spokesman stated, "The very extensive (and inevitable) investments into the modernization of our machine park have ultimately let to debt service, which we were unable to generate against the low-margin competition in Asia."The EIPC will holding a workshop on Metallization & Surface Finishes at the Frauenhofer location in Berlin on February 17. Paul Waldner of Multiline International Europe will chair the workshop as well as make a presentation on additive as well as semi-additive processes in behalf of eSurface.Intersolar Europe 2016, the world's leading exhibition for the solar industry and EU PVSEC, the world's largest conference in the field of photovoltaics, will be held at the same time and in the same location as Intersolar Europe in Munich in June, 2016.EZchip Semiconductor agreed to a roughly $800-million offer by fellow Israeli chip designer Mellanox Technologies, marking one of the biggest deals signed in recent years in which both parties were Israelis. That is nearly double the Israeli-only M&A $476 million annual average of the past 10 years.
Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest foundry, will increase its capital expenditure this year to $9 - $10 billion. The company expects to complete process and product qualification for 10nm chips during the first quarter this year, and is on schedule to start production at the 7nm node in 2017. Chairman Morris Chang said it’s likely that revenue growth for the overall semiconductor industry will fall in a range of 2 percent to 3 percent for the next five years. TSMC plans to start production of 5nm chips sometime in 2019, about two years after it launches the 7nm, products. The company will likely use extreme ultraviolet (EUV) lithography to make 5nm chips and is installing 3rd generation of EUV equipment to do so.
Mega mergers continue to surge in spite of a shaky market
Johnson Controls is reported to be in advanced talks to merge with Tyco International. The deal that could be valued at high as $20 billion signals that recent market volatility won't derail a surge in takeover activity. The new company will make Tyco's location in Cork, Ireland its legal and global business headquarters. The tax inversion will save $!50 million in taxes annually as Ireland's corporate tax rate is 12.5% while the U.S.' is up to 35% - the highest federal tax rate of any developed country.
Foxconn, which assembles most of the world’s iPhones, is reported to have offered about $5.3 billion to buy the troubled Sharp Corporation. Japanese officials have expressed concern about letting Sharp, and its advanced display panel technology come under foreign control. Foxconn’s high offer is said to be designed to make the deal economic and not political. Meanwhile, the company, also known as Hon Hai, will lay off 320 at a TV plant and 480 at a mobile phone plant in Brazil. The latter makes cell phones for SONY Mobile which is experiencing low demand for its products.
Haier Group, the world's biggest home appliance maker, is buying General Electric's (GE) appliance business for $5.4 billion. GE has been well-known in the major appliance business for more than a century. This was the third Chinese multibillion-dollar foreign acquisitions announced in January.
February 2016
company known as China’s leading supplier of UV curable coatings for fiber optic cable is also building a strong reputation with its printed circuit fabrication and SMT products, its 99.999% pure Al2O3 for the manufacture of synthetic sapphire, and a new line of products for the manufacture of LEDs and flat panel displays. Chairman Dr. Jinshan Zhang stated that the company will provide transportation from the show and back mid to late afternoon on Wednesday, March 16.
*Gene Weiner is Chairman of the company's Advisory Board.
The IPC Ambassador Council is planning to produce an Executive Forum in conjunction with IPC APEX EXPO 2017 in San Diego February 2017. Designed for senior executives and owners of printed circuit fabricators and their suppliers, the program will focus on helping the "smaller" enterprises succeed in the face of rapidly changing technologies and mega-mergers of fabricators and supply chain organizations, as well as the relocation of supply chain sources. All participants in the industry are invited to attend, whether or not they are members of the IPC!
Readers of this column are invited to submit their program suggestions to: gene@weiner-intl.com
The IPC has become a partner of NextFlex, America's flexible hybrid electronics manufacturing institute based in Mountain View, California. This new public-private partnership is part of the National Network for Manufacturing Innovation (NNMI) whose goal is to establish the U.S. as the global leader in flexible hybrid manufacturing. The IPC has already published 5 standards on printed electronics materials, processes, terms and definitions and its Printed Electronics Committee is working on 6 additional standards.
Expanding focus for the future - filling a void?
SEMI launched the European Semiconductor integrated Packaging and Test (ESiPAT) Special Interest Group (SIG). The SIG represents SEMI members who have semiconductor packaging, assembly, test manufacturing, or design activities in Europe. The purpose of the SIG is to foster collaboration among companies and to collectively raise the profile and reinforce the semiconductor back-end industry in Europe. Activities will include: Mapping and reporting capabilities and capacities of European SiPAT members; identifying gaps in the European back-end supply chain relative to other regions, and building project consortia and bidding for European funding.
Additional chapters in North America and Japan are currently under development.
This week I noted that Northeastern University (located in Boston) will promote its Center for High-rate Nanomanufacturing at Flex 2016 in Monterey next month. The Center support and participates in corporate and federally sponsored research in advanced materials, electronics and sensors at two of its locations. Last week I drove by the College of Nanoscale Science and Engineering (part of the SUNY Polytechnic Institute) in Albany, NY. Earlier in the week I attended a meeting at a "small" but VERY high-tech company in Chicagoland that engages the University of Pennsylvania for segments of its R&D program. It brought back memories of my days at Dynachem and MacDermid when we used to send samples to a local university to be SEM scanned to aid in trouble shooting a problem or evaluate an R&D result during the period when we were too small to afford our own scanning electronic microscope.
Does anyone know how many such university sites there are? Is there a central listing of them? This would most certainly be of great help to the "smaller" enterprises that need aid in developing, testing, and establishing a data base for their next generation products. It would seem to be something that various trade associations should develop and maintain for its members.
The big get bigger and margins will get thinner
China-based Suzhou Dongshan Precision Manufacturing's (DSBJ) $610 million acquisition* of MFLEX (Multi-Fineline Electronix) could spark a price war later this year amongst flexible circuit makers according to pundits quoted in the Digitimes. Acquiring MFLEX will allow DSBJ to pursue Apple business now held by such flexible circuit makers as NOK, Fujikura, Sumitomo, Zhen Ding Technology Holding, and Flexium Interconnect. The deal is expected to be completed in the 3rd quarter of this year pending stockholder and regulatory approvals by China and the U.S.
*An investigation on the adequacy of price and procedure relating to the transaction was announced shortly after the merger announcement.
From Japan
Panasonic has founded a JV in China Panasonic Automotive Energy Dalian, to make secondary automotive batteries.
Apple has announced plans to build a 15,000 square meter R&D center in Yokohama. It was reported that Apple made a deal with Japan Display to build a $1.4 billion factory dedicated to smartphone displays.
Ibiden who has been making HDI boards for Apple during the past 3 years is reported to be in a major push to take more of their board business away from Unimicron, Unitech and Compeq. TTM and AT&S board are also suppliers for Apple. If Ibiden is successful it will most likely produce the boards in its Malaysian facilities.
Nippon Mektron has also reportedly recently lowered its prices to challenge Zhen Ding Technology and Flexium Interconnect for their shares of Apple's business.
Sumitomo will establish a new subsidiary in Cambodia, Sumitomo Manufacturing Cambodia Co., to provide "local" EMS support for the ASEAN market.
Ebara will invest $60 million in a new Kumanoto Prefecture plant to increase its semiconductor equipment manufacturing capacity.
NEPCON JAPAN recap - A growing trend: Teaming up for efficiency, strength and success
The 45th NEPCON Japan, comprised of 6 components, INTERNEPCON JAPAN, ELECTROTEST JAPAN, IC PACKAGING TECHNOLOGY EXPO, ELECTRONIC COMPONENTS & MATERIALS EXPO, PWB EXPO and FINE PROCESS TECHNOLOGY EXPO had 2032 exhibitors and more than 83,000 visitors. It was held concurrently at the same venue with AUTOMOTIVE WORLD - Asia’s leading exhibition for automotive technologies, WEARABLE EXPO – World’s largest exhibition for wearable device and technology, LIGHTING JAPAN- Advanced technology for LED/OLED technology and products.
In a special program created to support young engineers industry giant Takashi Kawamura, Chairman Emeritus of Hitachi, spoke about "The Will Power Which Made Hitachi's V-sharpe Recovery Possible." Or as I like to say, "Keep your eye on the ball and focus, focus, focus." And, to quote Dan Feinberg during the turn-around he led, "There are no sacred cows!"
Congratulations to IEC on its 50th Anniversary!
IEC (International Electronic Components) founded by Sam Eidel and Jim Stone will celebrate its 50th anniversary at the IPC APEX EXPO on March 15. Shawn Stone, Jim's son, took over in time to steer the distributor of PWB materials, specialty chemicals and equipment through the turbulent times and major market shifts of the past few decades. IEC was the first to bring a major Cu-clad laminate line to Canada from Taiwan establishing the country's first facility to cut laminate, sheet, and to tool and package prepreg with CNC and other automated equipment. It provided dry film photo resist and electroless Cu plating systems for the fabs "North of the border". In 1998 Shawn formed IEC USA with Chuck Williams and has since expanded coverage with 7 warehouses across North America and laminate conversion facilities in Chicago, Santa Clara, and Toronto. IEC is the first supply chain company to import UL approved photoimageable solder masks from China.
The IPC launched a new web site and stepped up activities to recruit new members for its Political Action Committee (IPC PAC). The IPC PAC's mission is to grow so that it can support pro-manufacturing candidates who share the IPC's views on key policy issues.
In the face of falling film usage for photo tools due to the rapid increase of direct imaging, Agfa Materials (Belgium) promised to continue the production and the support of its films. Agfa expects that during the next five years none of its Ag photo tooling film volume will decline to a non-profitable level. A company spokesman said, "We can guarantee the supplies." The company is also committed to providing 12 months notice if it plans to discontinue any particular film.
The first half of 2016 will continue to be a challenge for those in the electronics manufacturing markets. Slowing economic growth in China and weaker emerging markets are lowering sales of products ranging from TVs to personal computers to smart phones. This bodes ill not only for major OEMs, but also members of their supply chains. Reports from China indicate spotty business from the PCB suppliers of materials and equipment. This bodes ill for not only the suppliers, but also for the broader industry.
How does one buy a company in Japan where the culture has usually dictated that companies not sell out to foreigners? Easy. Just bid more than twice as much as the domestic competition. That's what Foxconn did to move ahead of competitive bidder Innovation Network Corp. of Japan (a publicly backed concern) to move into prime position to take over Sharp. It just took $5.5 billion. (Foxconn's annual sales are $125 billion). The deal will provide a major step in vertical integration for the manufacture of smart phones, tablets, TVs, etc.
The December 2015 sales figures for German PCB manufacturers were 3.4% less than those of December 2014.
SEMI expects 2016 capex to remain on a par with 2015 spending even though the short term economic outlook remains cloudy. North American semiconductor equipment makers posted approximately $1.23 billion in sales for January, about 0.1% less than January 2015.
March 2016
Taiwan-based Chin-Poon Industrial, a major supplier of automotive circuits, saw its net profits increase 11.8% over 2014 to a record high $61.13 million in 2015. It also improved its gross margin improved to 14.7% from 13.6% last year.
Are there too many "apples"?
Flexible PCB maker Flexium Interconnect revenues dropped 46.2% on month and 7.71% on year to a 19-month low of $26.91 million in February. Its revenues for the first two months of 2016 were down 6.46% from last year. Flexium expects its capacity utilization rate to stay flat at 50-55% in the first quarter of 2016. Career Technology's revenues fell 3.5% from a year earlier in February 2016, which marked the seventh consecutive month of on-year revenue decreases. Career Tech ‘s February revenues $23.5 million, its lowest since February 2014. The company's cumulative 2016 through the month were down 16.7%. FPCB maker Zhen Ding Technology Holding also reported revenue decreases for the month. Down 41.1% on month and down 5.8% y-t-y to a 24-month low.
IPC APEX EXPO in Las Vegas had one of the best first days in years in spite of the relatively poor physical layout and the positioning of the meeting rooms. Many unrecognizable (new) faces were seen wandering the expanded exhibit spaces checking out the latest in robotics as well as the usual product improvements, and attending conferences and committee meetings. 3D printing appeared to be finally garnering more attention at the IPC. Perhaps that will spur additional funding for R&D amongst IPC members to develop the materials and equipment needed to make it commercially viable.
The multi-show combination in Shanghai showed weakness in the poorly attended CPCA exhibits, strength in the strongly attended SEMICON China show and conference, interest in the relatively small FPD (Flat panel display) exhibits, not much new in Productronica China, and special interest in Electronica China's automotive/sensor component presentations. A number of those that attended and exhibited at CPCA said that they should have attended the IPC APEX EXPO presentation instead, and would have done so had it not been for the other concurrent events at Shanghai. Several others chose to exhibit at SEMICON rather than the CPCA as they had done in the past, and said they would remain at that show as SEMICON seems to have begun to shift more focus towards packaging and its supply chain.
A good working model for the future?
I had an opportunity to have a chat with SEMI president and CEO Denny McGuirk during this month's trade show trip to Shanghai. He provided some interesting insight as to SEMI's current position and future, his views on trade associations, and SEMI's direction. He views SEMI as the place where the entire electronic supply chain can meet and interact. He pointed out that SEMI is now called just that: SEMI - not the Semiconductor Equipment & Materials Institute. He stated that the next target industry to bring into SEMI's family would be MEMS. He stated that SEMI is truly a global organization and that all regional unit presidents report directly to him. Denny also pointed out that it is important to note that SEMI's board is composed entirely of CEO's and Chairmen of enterprises currently active in the industry. This allows them to commit, on the spot, their corporations to decisions made during board meetings.
Nearly 150 guests attended IEC's (International Electronic Components) 50th anniversary celebration party held by the company President Shawn Stone at the SLS Las Vegas Hotel & Casino during IPC APEX EXPO.
Sales figures reported by Germany's printed circuit board manufacturers in January 2016 were 7.5% lower than those reported for January 2015.
XMC, a contract chip maker owned by the Chinese government, will break ground before the end of the month in Wuhan for the first Chinese-owned plant dedicated to producing the most widely used memory chips. $24 billion will be invested in the project leveraging its partnership with U.S. flash memory maker Spansion (now part of Cypress Semiconductor). The venture will primarily use money from a national fund to support the semiconductor sector that China which established in recent years. The new factory will produce both flash memory and DRAMs. XMC said that the $24 billion will be invested in three stages: the initial factory focusing on NAND flash-memory production; a second facility for DRAM chips; and a third stage devoted to supplier operations. The first product is expected to become available in 2017.
A major enabling process breakthrough at MIT's School of Engineering - I wonder how fast this one will become commercially viable
MIT researchers have created the thinnest and lightest solar cells ever made. Just one-fiftieth the thickness of a human hair, and capable of producing up to 6 watts of power per gram, the prototype cells have the potential to add solar power to everything from paper-based electronics, all manner of mobile devices and exceptionally lightweight wearables. The power-to-weight ratio is where these new cells shine. They produce an output 400 times greater per kg than standard glass-covered solar cells.The researchers used the common flexible polymer parylene for both the substrate and the coating, and DBP (Dibutyl phthalate, an organic material and a commonly used plasticizer), as the main light-absorbing layer. The entire process is performed at room temperature without the use of any solvents. The substrate and the cell are simply produced on a carrier in a vacuum chamber using standard vapor deposition processes. methods in a vacuum chamber. Both the substrate and the protective top coating are “grown” at the same time sealing the fragile photovoltaic layer from harm early in the manufacturing process.
SEMI China researched the packaging and assembly industry segment and observed a total of 147 semiconductor packaging and assembly related companies, representing, by revenues, 96 percent of the semiconductor package manufacturers in China. Most companies are concentrated in the “Yangtze River Delta” area, covering Jiangsu, Shanghai and Zhejiang provinces, and in the Pearl River Delta area of Guangdong province. Sixty-five percent of all packaging companies in the SEMI China research are located in Jiangsu, Guangdong or Shanghai.
This large base for packaging and assembly, which includes discrete, power, and LED packaging companies, results in China being the largest regional market consuming packaging equipment (with $800 million sold in 2015 and a similar amount or higher estimated for 2016). For packaging materials, China is the second largest market globally — second only to Southeast Asia — and total packaging material sales are expected to reach $4.4 billion in 2016. (SOURCE SEMI China)
Taiwan-based PCB companies produced 1.8% more circuits in Taiwan and China in 2015 than in 2014. The value was $17.3 billion.
Atotech announced the inauguration of its new RM 50M Asian chemical production plant in Penang, Malaysia. The new facility has a full production capacity of 12.000 t/a per single‐shift operation. The expansion is aimed at supporting the company's large customer base in the region developing next generation electronics goods.
Asahi Glass has commercialized a new cover glass for finger print sensors used for security access of mobile devices such as smart phones and tablets. Toppan Printing has developed a new photo mask for the next generation of EUV lithography processes in chip manufacture. It minimizes unnecessary reflections.
April 2016Renewed faith in America's bare board business?HCI Equity Partners acquired KCA Electronics and Marcel Electronics International Circuits. HCI also announced the appointment of IPC Director Shane Whiteside as President and CEO. Whiteside had worked with HCI before to form and grow TTM.APCT Holdings Company, the ownership group of APCT Inc., has acquired the Wallingford Connecticut based printed circuit fabricator, Tech Circuits, Inc.
In Memoriam
We lost another icon this past month, Eugene Ronald Selven. Although he had a long history in the semiconductor industry at such firms as TI, Fairchild, and Raytheon, many of us will best remember him as the Publisher of Chip Scale Review for which I wrote a column for several years. Gene bought the journal from Tessera in 1999 and built it to prominence in the semiconductor industry. What I remember most about Gene was his insight and gentlemanly way of handling challenges. It was always a pleasure being with him to discuss the industry or to exchange "fish stories". Although he has been retired for a number of years, his passing last month has created a vacuum felt by many. Chip Scale Review continues today under the auspices of Kim Newman, Gene's daughter.
Presidential candidate Donald Trump singled out 3D printing in his first foreign policy speech as one of the advanced technologies that America should develop and protect.
The electro-deposited copper foil industry is booming in China, but not for PCBs and CCLs. The factories are running at full capacity for the battery industry. The significant portion is for electric cars. About 50,000 electric cars were sold in Shanghai alone in 2015. The margins are much better than for PCBs and CCLs, so it is anticipated that price and delivery issues will arise. The batteries are primarily made in Asia.
The market for assembly (SMT) equipment and robotics has improved substantially in China this month. It appears that some companies could no longer delay purchases of equipment that had been on hold. The same recovery has NOT yet been noticed for bare board fabrication systems.
In a recent “It’s Only Common Sense” column Dan Beaulieu wrote, “And the cold hard fact is that the smaller guys are on their own. They have no one to look out for them, no one at all. Over the years, IPC has made it abundantly clear that they have a vast amount of interest in the big guys, but very little interest in the smaller shops.” Then Dan went on to list 10 advantages that he felt smaller fabricators have over the “big guys.”
I have a different view. The IPC does not work for any individual company. It DOES work for most companies if they actively participate together as a group in activities that are in their best collective interests. The IPC interacts with our government in behalf of all interconnect companies. It provides a vehicle whereby a class or group of members can get together and work on programs for their MUTUAL benefit.
The IPC is reinventing itself. It does more than just develop standards. It offers training for member companies and its employees. It provides focused showcases for its members’ products and services combined with a major conference every year. It recognizes that the electronic supply chain is changing and new solutions must be found as more and more systems bring silicone and components closer together in packages.
It recognizes the global world of packaging and works to the benefit of all its members. It fosters cooperation and consortia to the benefit of its fabricators, assembly and packaging members…and industry.
The IPC even has a Vice President in charge of Member Success. Changes are inevitable. Major consolidations have reshaped the industry. Supply chains are changing. Those that wish to avoid the fate of buggy whips should rethink their company strategies.
To this end I am working towards presenting a PCB Executive Forum, under the auspices of the IPC, to be held at the next IPC APEX EXPO event in San Diego next February. It will be focused on helping the “smaller companies” overcome today’s industry challenges. It will be designed to help CEO’s, Presidents and company owners solve some of the problems they face in today’s environment. All members of the bare board fabricating community as well as their supply chain will be invited to attend, even if they are not currently members of the IPC.
Chinese counterfeiters caught with the goods
Daofu Zhang, 40, of Shenzen, China, pleaded guilty this month in New Haven federal court to conspiring to sell counterfeits of sophisticated integrated circuits to a purchaser in the United States. His co-conspirator Yan proposed to supply the U.S. source with “fake” ICs that “look the same,” to replace the ones to be stolen from the military. Yan and another co-conspirator, Zuo were also apprehended and plead guilty last month. The case is being prosecuted by Assistant U.S. Attorney Henry Kopel* and U.S. Department of Justice Counterintelligence and Export Control Section Trial Attorney Casey Arrowood. *Kopel is the son-in-law of Gene Weiner, Publisher of Weiner’s World.
We have been predicting this for the past several years
Taiwan-based PCB players are pushing into car-use products as demand for PCs, smartphones and tablets has been weakening. Chin Poon (experiencing record profits) and Tripod Technology, which have been operating in the car-use PCB market for a long time, are looking to expand their presence in the market, while newcomers including Unitech, Unimicron Technology, Global Brands Manufacture (GBM), Apex International, Zhen Ding Tech, and Ichia have been trying to catch up. With demand for smart car applications including Internet of Things (IoT), semi-auto drive, infotainment systems, around-view monitoring systems, parking sensors and portable navigation devices, growing rapidly, demand for related upstream components such as PCBs is rising, and many PCB makers are aggressively looking to grab a share of the market. Car-use components require certification from car vendors, and the process usually takes more than 2-3 years. (Source DIGITIMES, April 14)
A senior ADI manager said to us, "Today, automotive is everything!"
We just received a solicitation from a board fabricator offering the following
-Express PCB Prototyping(2-40 layer)
－HDI PCB with 4mil laser holes －Flexible Printed Board(1-8 layer)
－Flexi-rigid Printed Board
－High Frequency Board (Rogers,Arlon,PTFE)
－Blind/Buried Via Board
－High Tg Thick Copper PCB (Up to 12 oz with TG210)
－Mix-Material(FR-4+Rogers) Multilayer PCB
－Embedding Resistance/Capacitance Board
－Halogen-free/Lead-free Board
－Thick Gold Plating/Immersion Gold/ENEPIG Board
Yep! You guessed it! It came from China. How many of America's remaining 200 or so board builders (excluding those "giants" with multi hundred millions in sales) can match all of the listed 11 items as a service? Do you consider the ability to build lots of 20 or 100 complex HDI boards at a time in a secure U.S. location necessary for America's defense? If so, who will support the acquisition of the capital equipment needed to do so? Who will provide (pay for) the expensive secured digital network required by prime contractors (Raytheon, Lockheed, Boeing, etc.)? The latter could cost up to a million dollars - a bit on the "rich side" for shops with an annual turnover of just $10 or $15 million or so.
Caveat emptor
The April 15 online edition of PCB Update had a column by Peter Bigelow, President and CEO, of IMI that offers very sound advice worth repeating in the wake of a number of recent industry false starts and overly ambitious claims. A very brief summary is below.
Be judicious when studying “game-changing” technologies! Improvements pitched as being the elusive “one size fits all” breakthrough usually are not. We must be diligent, using rigorous analysis and verification, to avoid processes that are oversold but underperform. If a new material, machine, or process simplification does not improve overall quality, add to overall capability, or have a measurable, favorable impact on cost, it most likely is not worth the effort. Many very interesting – and promising – technologies may be game-changers for us all. However, some, such as conductive inks, have been around for decades but are still just not ready for prime time. Others may have the potential to transform the industry in ways unimaginable just a few years ago. We need to be aware and inquisitive about all but not allow ourselves to become too mesmerized by any until they demonstrate tangible and proven value.
Intel said it plans to reduce its global workforce by up to 12,000 jobs, or 11%, as the semiconductor giant reported a worse-than-expected 7% increase in first-quarter revenue. The chip maker said the job cuts are part of the company's restructuring away from a computer-based company to one that powers the cloud and billions of connected computing devices. (Source WSJ)
Chinese direct investment in the U.S. rose to a record last year. China's investors placed $15+ billion into 171 transactions in the U.S. According to Rhodium’s China Investment Monitor, they helped add 13,000 full-time jobs for Americans last year.
The joint IPC APEX HKPCA show in Shenzhen China is now be the largest in the printed circuit industry. It will be about 500,000 square feet at the next edition in December 2016. That's four times the recent IPC event in LAS Vegas.
BPA’s short term PWB forecast for 2016 is essentially flat with different segments increasing or declining as in the following summary:
- Consumer – falling levels of demand
- Automotive – healthy demand and a bright spot supported by new application
- High speed equipment – steady demand
- Computers – flat or decline
- Medical and industrial – steady demand growth
- Handsets – flat
- Military – flat
- Aerospace – steady demand
BPA’s 2016 worldwide semiconductor forecast is suggests that we will see a flat year to a single figure contraction (in semiconductor value terms) of shipments compared to 2015. With the macro economic factors as they are at the time of writing, the analysis would conclude that 2016 sales growth will be flat compared to 2015. However, the less optimistic outcome (supported by the semiconductor forecasts), may well be a contraction of between 3-5%.
Hope is NOT a good reason to exhibit
Nothing really new was seen at 26th Flat Panel Display Expo (FINETECH JAPAN) early this month. Primary exhibitors were chemical, material, and manufacturing equipment firms. Most presentations were improvements in existing products. For example in the case of thin films: less thickness, higher heat resistance, longer flexing endurance, smaller loss with high frequency, or higher dimensional stability - rather than something truly new. Kenshi (Dominique) Numakura, DKN Research covered the show. He stated that these companies were not expecting a huge amount of business; their goal was to engage some potential customers for a future business relationship. A marketing representative from a large company told him that "he had hopes" of attracting one customer with future product application needs. Numakura said, “Everyone in Japan is trying to scratch out a living. No one has thrown in the towel yet, and they all need one lucky break.”
Never ending
When I first started in this industry nearly 60 years ago there were just two major shows: NEPCON East at the Coliseum in New York, and NEPCON West at the Anaheim Convention Center. This then grew to two major show seasons which added exhibits across the Atlantic River (in the UK) and the Pacific Pond (in Japan*) the Spring and Fall. Now it appears to be one long never ending season that all too often shows little that is truly new, presents a major step forward, or a potentially disruptive technology. Visitors roam through these (often regional) events hoping to find that magic bullet that will propel them forward into better yields, lower costs, or a new opportunity. The next such "major" event is NEPCON China 2016 at the Shanghai World Expo & Convention Center April 26 ~ 28.
*(I presented a technical paper at the first INTERNEPCON JAPAN in the early 70s when I was VP of Business Development of OXY Metal Finishing - a subsidiary of Occidental Petroleum). Can you guess at just came in by email ? An advertisement for INTERNEPCON Japan, January18 20, 2017 !
Market penetration by "dumping" used refurbished products?
Apple will try to gain some traction in the world's 2nd largest mobile phone market (India) by importing and selling refurbished iPhones. Apple, which has 2% of the market, is meeting resistance from its "local" competition and may once again be denied access via this route. 4/5 of smartphones there cost less than $150 with some branded phones priced as little as $35.
The Board of Directors of China telecommunications equipment maker ZTE will meet this month to replace three of its most senior executives as a result of the company being accused of violating of U.S. trade rules. The U.S. Department of Commerce slapped trade sanctions on ZTE last month, claiming that it violated rules by exporting American technological goods to Iran and other nations.
IDC announced that the fast-growing 3D printer market continues to be dominated by foreign brands although Chinese vendors are catching up and growing faster. The top five players in the China 3D printer market are all foreign brands: EOS, Stratasys, Renishaw, ZRapid, and Solidscape. Stratasys (Makerbot) and 3D systems also headed the list for desktop models, but the rest of the top five in this category belong to Chinese vendors Xery, Flashforge, and Beijing Tiertime. In terms of China's export market for desktop 3D printers, the top 3 brands Flashforge, Beijing Tiertime and Winbo account for 50% of the market.
May 2016
Multek, a wholly owned subsidiary of FLEX, launched its new Zhuhai automotive division on May26 to support its rapidly growing automotive business. The company also announced completion of ISO/TS16949:2009 quality accreditation for its high layer count factory, and now delivers TS16949-grade automotive offerings at all of its manufacturing facilities globally.
Industry 4.0 is Advancing rapidly in the Kunshan, China electronics manufacturing hub. Will Industry 4.0 be enough by itself to make other areas of the world more competitively suitable for sourcing?
Kunshan in Jiangsu Province near Shanghai attracts much of its investment from Taiwan. It is now accelerating growth by replacing workers with robots. Thirty-five of the 4,800 Taiwan companies in this area, including Foxconn, spent $610 million on artificial intelligence last year. Foxconn reduced its labor force there from 110,000 to 50,000 by the introduction of robots. AS many as 600 more Taiwanese companies in Kunshan are reported to have similar plans.
Reality 4.0 - Are you missing the boat?
Some of our North American smaller fabricators facing difficult times and decisions sit back on their haunches and vociferously state that the IPC does nothing for them. They are missing the boat. The IPC provides the structure and support that allows virtually any group to band together, and work collaboratively to overcome obstacles and handicaps, and succeed in a rapidly changing and challenging environment. The IPC Ambassadors are creating an Executive Forum just for them and their supply chain. It will explore new technologies and trends, support opportunities, and provide answers to many of the questions posed by these smaller enterprises of which there are more than 100 in the U.S. Additionally, the IPC will provide a new membership opportunity that will be difficult to refuse. Remember, there is strength in numbers! Stay tuned!
The IPC's 3rd Reliability Forum held in Dusseldorf this month was a resounding success. The 2 1/2 day event started with a presentation on building in reliability by IPC Director and Ambassador Mike Carano, Vice President of RBP Chemical Technology. Other prominent presenters included: DuPont, Fraunhofer Institute, Atotech, and Park Electrochemical. The first full day focused designing for reliability, while the second addressed process. A half day on government relations activities was also included.
The Boston Chapter of the SMTA held its May meeting at Cirtronics who graciously opened its doors (and factory for a tour) to host the event. Though held in New Hampshire, it attracted IPC and SMTA members from Massachusetts and the Western part of Connecticut. Cirtronics is an employee owned contract manufacturer founded by its CEO Gerardine Ferlins. The busy facility was up-to-date and spotless. The profitable 176 employee company has progressed to the point where 70% of its business includes box build. It has just acquired several new screen printers and is evaluating several new 3D AOI systems for purchase.
The meeting program featured Leo Lambert, Vice President and Technical Director of EPTAC Corporation. He covered key changes in and amendments to IPC-600, 610, and J-STD-001 Standards and how they affect our industry and the latest training and certification programs. Somehow the live presentation provided a far different result than the typical webinar. Humor was used to highlight specific points, problems, difficulties and the current situation. The result was very effective – at least to me. For example, amendments have been made that are different or in direct opposition to the original document. Yet the certification programs and manuals still contain and teach the unmodified or corrected items. Lambert well presented the need for peer review of training – if not standards – documentation so when the users receive it, they are not confused by any inconsistency.
The first Innovations Forum Hungary: Automation in Electronics Production "– building a competitive advantage in the region" will be held on the 16th of June, 2016 at the prestigious Academy of Sciences in Budapest.
The International Federation of Robotics (IFR), which represents robot manufacturers and research institutes, says China has surpassed Japan to become the world’s biggest market for industrial robots.
There is increasing concern about the secure availability of advanced printed circuits for America's defense industry. These are needed to provide the platforms for high tech electronics. R&D for new systems seem to be progressing well. However, the U.S. base of smaller fabricators that produce more than half of military boards is hard pressed to fund the new equipment needed to build these circuits. Costs are often more than 20% of annual turnover. Some fabs, in the Northeast as well as in California, continue to report difficulty in acquiring the skilled workers needed for production. Others cannot modernize or add capacity due to local (state) "environmental" laws and restrictions. Congress is slow to act and too busy with the election to do much of anything this next year. It has funded some major items but do not consider printed circuits a big item. PWBs' importance is still not yet well enough broadly understood. Do you YOU have a comment, recommendation, or solution?
When will 3-D printing for prototyping be at your favorite circuit shop?
It will be sooner than you think - at least for prototyping. One system utilizing an ink containing nano silver particles for fine line printing will be made available commercially by the end of this year. It will be demonstrated at the CES show in Las Vegas January 2017. The deposited circuit traces may be photonically cured (sintered). HP announced a 3-D new system that is 10 times faster than its predecessors. The insulating substrate may be UV cured epoxy. One such system for epoxy has already been demonstrated in the UK. Get your 3D circuit printing update at the IPC Ambassador Council Executive Forum for fabricators and their supply chain presented by industry icon Dan Feinberg at IPC APEX EXPO in San Diego, February 13, 2017.
Financial news from TAIWAN
Chin-Poon Industrial, with more than 70% of its revenues coming from the automotive industry, announced consolidated revenues for April 2016 increased 5.4% over April 2015 to $58.7 million. The company’s cumulative 2016 sales through April increased 9.3% from a year earlier. Consolidated revenues at Tripod Technology’s sales were up 1.1% from a year ago to $107 million in April 2015. Compeq Manufacturing had consolidated revenues of $93.9 million in April 2016, down 0.1% from April 2015 PCB producer Apex International’s April 2016 revenues were $21.4 million a 9.4% increase over last year. Board maker Zhen Ding Technology Holding's net profits declined 88% on quarter and 77% on year to $9.52 million in the first quarter of 2016.
The UK's HK Wentworth, parent company of Electrolube, which supplies sprays and coatings to protect, clean and lubricate electronic circuit boards, switches and sensors, is spending £500,000 to build a new factory to make protective coatings in Bangalore, India.
It's a new era and all about "THE CAR"
SEMI and Georgia Tech, in partnership with iNEMI, IMAPS, and IEEE, will launch a new workshop called "FUTURECAR: New Era of Automotive Electronics" November 9-10, 2016 in Atlanta, GA. The new era of automotive electronics is the most complex electronics technology to date. It includes not only computing and communications electronics, autonomous driving electronics, sensing electronics but also high-power and high-temperature electronics. It is expected to account for a third of the value of "the car", creating a market of approximately $1 trillion within a decade. The challenges to address this market include: 1) research and development of key technologies, and 2) technology ecosystem stewardship to enable swift and cost-efficient commercialization. The basis of this workshop is the synergy between Georgia Tech in R&D in partnership with its 50 supply-chain companies and SEMI in technology stewardship. This is complemented by the strength of co-sponsors such as iNEMI in roadmaps, and IEEE-CPMT and IMAPS as global electronics societies.
The European Institute of Printed Circuits (EIPC) meeting on "Strategies to maintain profitability in the European PCB Industry" will be held on June 9 & 10 in Glasgow, Scotland. The European Commission said growth in the euro zone and the wider European Union will be slightly weaker this year than previously forecast, as it warned that the economic slowdown in China and other emerging markets, geopolitical tensions and uncertainty ahead of the U.K. referendum on EU membership could weigh on the economy. Economic growth in Gulf States is forecast to slow to 1.8% this year as the oil dependent region cuts spending to battle fiscal deficits reaching 11.6% of Gross Domestic Product (GDP).
June 2016
French oil and gas producer Total plans to sell Atotech. "Atotech no longer falls within Total's strategic vision," chief executive Patrick Pouyanne was quoted as saying. Total is reported to be seeking a buyer that was "committed to sustaining Atotech's current strategy." Berlin-based Atotech, which generates annual sales of about $1 billion, manufactures specialty chemicals and equipment for printed circuit boards and semiconductors. It is Total's sole remaining specialty chemicals unit.
Is this analogy correct? Printed circuits or packaging = buggy whips or transportation
My June trip to Hong Kong did not stir any optimism in my outlook for the printed circuit industry's future. The first discouraging sign was the empty stores in the shopping arcades of major hotels. The second was the oft repeated statement by hotel management and local businesses that this year's "June shoppers" did not come, and discounts galore were available from hotels and shops. Then came the real news. Distributors to the EMS and PCB companies (other than those involved with automotive boards) were singing the blues. Sales have dropped dramatically and stayed down during the previous quarter. Statements of improvements in SMTA equipment sales based upon customer activity and pent up buying needs have not yet begun to materialize.
The way that I see the problem relates to overcapacity for fabricators in the consumer segment of devices with flat panel displays - mobile and otherwise, as well as a decline in notebook PCs, TVs and other household and portable electronic devices. Additional culprits include the improved packaging designs as well as more powerful chips replacing multiple IC*s - both requiring less board real estate.
*See Dan Feinberg's remarks on our Comments & Discussion page.
Continued consolidation throughout the board's supply chain further exasperates the situation. What happens when there is just one or two of each type? Future packages for automotive, medical and other advanced systems will require increasingly small feature sizes on smaller substrates. My sentiments exactly.
Brian Shore, Chairman and CEO of Park Electrochemical, states in his company's 2016 annual report explaining the positioning of Park as a niche company for the future, "...there is no future in mediocrity other than a future on the garbage heap of companies which thought "OK" performance would be good enough."
Those of you that know me also know that I, too have long espoused niche market positions, as well as providing exceptional service to each and every customer. I have always considered a customer with a problem as my number one priority - and opportunity!
While in Hong Kong, as a member of the Advisory Board of Post University's MBA program at the Malcolm Baldridge School of Business, I couldn't help but notice the promotion of a 9 month senior executive program delivered mostly in Hong Kong by faculty from Stanford University and industry experts from such firms as Goldman Sachs and McKinsey. The flagship executive program was being offered by Stanford Rock Center, a joint initiative between Stanford law School and the Graduate School of Business in Stanford University.
I also noticed an article in the business section of the June 22nd edition of the South China Morning Post stating that Tesla was close to forming a partnership with the Jinqiao Group to build a production facility in the metropolitan Shanghai area. each side plans to invest nearly $4.6 billion in the venture.
China's central bank stated that it will grant "privileges" to some overseas companies "in the future" in a move seen as giving more options to investors. The People's Bank of China is considering allowing foreign companies to issue shares on the mainland as part of a drive to reform the convertability of the yuan and open up the country's capital market.
Mark Crawford, a senior trade and industry analyst at the U.S. Department of Commerce, will share findings September 2016 on the aggregate production, employment, financial status, and R&D activities of some 200 PCB manufacturers surveyed by the government this year at PCB West in Santa Clara, CA. (Source: UP Media)
Omron in Japan has developed a new wiring process on molded housings with inkjet printing. The new process will eliminate traditional printed circuits for some applications.
China now dominates a biannual ranking of the world’s 500 fastest supercomputers, called the Top500. China has the world’s fastest machine for the seventh consecutive time as well as the largest number of computers among the top 500. The new fastest supercomputer inn the world uses Chinese-made microprocessor chips instead of chips by Intel.
Over 43,000 visitors are expected to attend SEMICON Taiwan 2016 September 7-9 at the TWTC Nangang Exhibition Hall in Taipei. The event has added new pavilions for Okinawa (Japan), Philippines and Singapore. Industrial theme pavilions include: Automated Optical Inspection (AOI), Chemical Mechanical Planarization (CMP), High-Tech Facility, Materials, Precision Machinery, Secondary Market, Smart Manufacturing and Taiwan Localization.
The Taiwan semiconductor equipment and materials market is expected to remain the world’s largest, with equipment sales projected to reach $10 billion next year.
Donguan Shengyi Electronics Ltd. has become the first Chinese company to earn certification as a qualified manufacturer to the IPC 6012 and A-600 standards.
PCB maker Apex International reported revenues of $23.43 million for May, up by 12.56% on month and 13.44% on year. Accumulated revenues for the first five months of 2016 totaled NT$3.309 billion, up 8.38% on year. (Source: Digitimes)
Chin-Poon, whose sales to the automotive industry surpass 70% of turnover, expects 2016 sales to beat those of 2015. Production lines at its plants in Taiwan, China, and Thailand are expected to run at full capacity for the entire year.
The new Huawei P9 smartphone leverages the Chinese telecom giant's in-house system-on-chip (SoC) design with a Kirin 955 integrated apps processor and modem from HiSilicon-a Chinese fabless chip company fully owned by Huawei. Built on a 16-nanometer FinFET process for superior levels of scalability, the Kirin 955 is an octa-core processor with integrated CAT-6 LTE modem. The octa-core processor is especially useful for advanced tasks, which is when the faster set of four cores kicks in after the lower-power set of cores has been deployed. Overall, the P9's capabilities broadcast Huawei's new strengths in unmistakable fashion. Huawei is the only other handset original equipment manufacturer aside from Samsung to possess apps processor and modem capabilities in-house. But Huawei does Samsung one better in having built an integrated apps processor and LTE modem-only the third entity to do so after San Diego-based Qualcomm and Taiwan's MediaTek. (Source: Andrew Rasswiler, IHS)
July 2016
Total silicon wafer area shipments reached a new record this past quarter. 2,706 million square inches were shipped during the most recent quarter, according to The Silicon Manufacturers Group an independent special interest group within SEMI.
The M&A activity in this industry segment continues unabated. Noted futurist Alvin Tofler, author of Future Shock, a primer on change that I often have quoted, passed this month at 87. He wrote with great insight about modern technologies, including the digital revolution and the communication revolution, and their effects on cultures worldwide. His works and the lessons he taught are timeless.July 2016
Virginia Congresswoman Barbara Comstock met with executives and employees of IPC-member company TTM Technologies at their manufacturing facility in Sterling, Virginia. Coordinated by IPC, this visit was part of an ongoing IPC effort to help policymakers learn first-hand about legislative and regulatory issues that impact the industry.
Suzhou Dongshan Precision Manufacturing Co., Ltd. completed its $600+ million acquisition of MFLEX (Multi-Fineline Electronix, Inc. ) this month. MFLEX, now as a wholly owned subsidiary of DSBJ had its stock delisted from the NASDAQ. Suzhou Dongshan Precision Manufacturing now has 16,000+ employees, and over 2 million square feet of manufacturing space - along with a number of American OEMs as customers.
How big will the fallout from the Pokémon Go phenomenon be?
Will Nintendo's smash hit force other game manufacturers to transition from game consoles to mobile app platforms to compete and remain profitable? Industry technologist and consultant Dominque Numakura thinks so. He states, "Electronic products related to the video game industry are a significant contribution to the bottom line for many affiliated with the electronics industry. This change will be disappointing for EMS companies, component suppliers. and circuit board manufactures. Engineers are constantly creating ways to deliver products and information to the consumer even faster and cheaper. Sometimes, unfortunately, the technology advances eliminates many jobs from the electronics industry.
"SEMI and the Fab Owners Association (FOA), an international group of semiconductor and MEMS fab owners and suppliers, announced that the FOA has become a SEMI Strategic Association Partner. The FOA is an international nonprofit trade association of semiconductor and MEMS fab owners and industry suppliers, who meet regularly to discuss and act on common manufacturing issues, combining strengths and resources to increase semiconductor manufacturing efficiencies to become more competitive. As a SEMI Strategic Association Partner within SEMI, the FOA will retain its own governance and autonomy with regard to charter and activities. A SEMI representative will serve as executive director of the FOA.
The new relationship is expected to reduce the FOA’s association management costs. “As the industry has changed, SEMI has adapted,” said Denny McGuirk, president and CEO of SEMI. "Our members requested SEMI provide more platforms and opportunities for pre-competitive collaboration with industry segments throughout the electronics manufacturing supply chain. We developed the Strategic Association Partnership as a hub and spoke linkage to other association communities to provide a collaboration and connection and access to SEMI's range of member services - while enabling that linked community to conduct their business autonomously for the specific interests of their members."
Although the meetings and workshops were busy, SEMICON's exhibits seemed a bit "old hat" and lacking the excitement of past shows. It did not have the luster of a highly charged and energetic SEMICON China held just a few months earlier. To be sure, there seemed to be substantial business conducted in the South hall and the Solar event in the West hall seemed to have a stream of visitors. But still, it seemed a bit lethargic. Perhaps this is as it should be when one considers two things - where the major growth is expected during the next few years and the continued consolidation of participants.
We DID find a fascinating new product at SEMICON.
TeraView Ltd. from the UK introduced a new non-destructive method of locating defects in complex circuit packages by terahertz imaging techniques. The system could locate faults (e.g., with solder ball connections) within 5um. TeraView was spun-out of Toshiba Research Europe in April, 2001 by its co-founders, Sir Michael Pepper (CSO) and Dr. Don Arnone (CEO), to exploit the intellectual property and expertise developed in sourcing and detecting terahertz (THz=1012Hz) radiation, using innovative technologies.
China is targeting a top-10 ranking in automation for its industries by 2020 by putting more robots in its factories according to the International Federation of Robotics (IFR). This is partly a response to labor shortages and fast-rising wages. The government which has been mandating 18-20% increases for years has now put a two year wage freeze into effect. To reach its automation goal, China is targeting sales of 100,000 domestically produced industrial robots a year by 2020, up 49% compared to 2015. The Chinese market is still dominated by foreign robot makers including ABB, Kuka, and Yaskawa.
Chinese companies still primarily produce low- to mid-range industrial robots. However, they intend to catch up quickly as is evidenced by this month's purchase of Germany’s Kuka by Chinese home appliance maker Midea in a successful $5 billion takeover bid for 86% of the company's shares. (Source: Reuters)
I had just finished reading the above news from Reuters on my flight to SEMICON when the passenger next to me on the flight decided to engage me in conversation. He turned out to be on his way to China via SFO. He was to be at his company’s Shanghai office for several weeks. He was employed by a Northeast wireless speaker company. His mission was to help his Chinese contract manufacturer automate. They had already begun to install 5 axis robots to pick, place and fasten a variety of large and small parts for the speaker assemblies. He stated that expected labor savings would be 20% to 30%, but that more importantly, improvements in yield and in quality had already been achieved. Productivity gains were also expected by the completion of the installation.
I asked if the company were to start to build or contract with a new an automated facility if it would it choose China, another country, or the U.S. He said, taxes aside, that would still be a tough call.
Do you remember Aquamer® DFR ?
The dry film photoresist originally introduced by Hercules several decades ago has resurfaced in China at the astounding reported low price of $0.07 per square foot including VAT. It comes with reports of less than perfect quality and the inability to produce patterns finer than 100um lines and spaces with good yields.
Nano Dimension Ltd has completed the development of the initial version of its software package, which will be integrated in the company's DragonFly 2020 3D printer. The new 3D printer, which is currently in development, will use proprietary inks and integrated software to quickly create fully functioning printed circuit board (PCB) prototypes. The software package, called 'Switch', enables preparation of production files of printed electronic circuits for the 3D printer. It supports customary formats in the electronics industry such as Gerber files, as well as via and drill files.
WACKER, the Munich-based chemical company, will be showcasing a world first in its booth at the 20th International Trade Fair for Plastics and Rubber: the first industrial 3D printer for silicones. The high-tech device – called ACEO® Imagine Series K – will be in operation throughout the entire tradeshow in Düsseldorf, Germany, from October 19 to 26, 2016. The inventor of 3D monolithic chip technology back in 2010, BeSang Inc , claims to have since created a superior three-dimensional (3D) architecture for NAND flash. Frustrated with licensee Hynix's slow implementation of its monolithic 3D technology, BeSang is opening the door to partnerships with other memory houses, as well as offering to contract-fab the chips for resale by others, at a price that reportedly reduces the cost-per-bit of 3D NAND from over 20¢ to about 2¢ per gigabyte.
DARPA’s newest program is making a bid to usher in a fresh dimension of technology miniaturization by challenging the technology community to integrate the collective functions hosted by an entire PCB onto a device approaching the size of a single chip,
The new Common Heterogeneous Integration and Intellectual Property (IP) Reuse Strategies Program (CHIPS) will try to push the massive amount of integration you typically get on a printed circuit board down into an even more compact format. It is all about devising a physical library of component chips, or chiplets, that can be assemble in a modular fashion. DARPA has posted a Request for Information (RFI), designated on fbo.gov as DARPA-SN-16-50, to harvest ideas at the front-end of the program from expert and industry players so that the CHIPS team can hone the details of the program in ways that would facilitate graceful incorporation of these new approaches within existing commercial semiconductor foundries and electronics fabrication facilities. The CHIPS team expects to use input from the RFI and a workshop anticipated to occur later this summer to prepare a Broad Agency Announcement (BAA). The BAA, which will also be posted on fbo.gov, will specify the program’s technical goals and how potential performers can submit proposals. (Source: DARPA)
OKI has entered into an agreement with Nippon Avionics Co., Ltd. (Avio) to transfer Avio’s printed circuit board business to OKI. The two companies will start negotiations on technologies and facilities transfer and a range of certifications beginning October 1, 2016 with a view to completing the business transfer by March 31, 2018. Most of Avio’s printed circuit board business will be transferred to OKI Printed Circuits and OKI Circuit Technology, both are the OKI’s EMS business sites, who will continue the transferred business.
The surface mount technology market is expected to be worth $4,730.5 million by 2020 at an estimated CAGR of 9.84% according to a study by Fast Market Research. SMT placement equipment represents the largest product market driven by the miniaturization trend, which has resulted in need for higher accuracy in the placement of semiconductor active components such as transistors and diodes among others. The market for inspection equipment segment is expected to grow at a faster rate due to an increase in use of small-sized components and optoelectronics which would force the electronics assemblers to invest in inspection equipment during the forecast period.
Tanaka Kikinzoku Kogyo K.K., one of the core companies of the Tanaka Precious Metals group based in Japan, announced that it has signed a contract to purchase 100 percent of the outstanding shares of the Swiss-based Metalor Technologies International SA, a company also active in the precious metals markets. The acquisition will give Tanaka (also parent of Electroplating Engineers of Japan (EEJA)) a global reach for its refining business, manufacture of electrical contacts, and its electroplating solutions and equipment. Metalor, with its 1,300 employees absorbed Englehard and NECC Coatings during its growth. Tanaka had joint ventures with Sel-Rex and others. Tanaka was founded in 1885.
Semiconductor Manufacturing International Corporation (SMIC), the largest and arguably the most advanced foundry in mainland China, announced an agreement with LFoundry Europe GmbH (“FE) and Marsica Innovation S.p.A. (“I) to purchase a 70% stake of LFoundry for a consideration of 49 million EUR. LFoundry is an integrated circuit wafer foundry headquartered in Italy, owned by LFE and MI. At the closing, SMIC, LFE and MI will own 70%, 15% and 15% of the corporate capital of the company. This represents the Mainland China IC foundry industry’s first successful acquisition of an overseas-based manufacturer, which marks a major step forward in internationalizing SMIC. The acquisition also provides SMIC with an entry into the global automotive electronics market.
For the first quarter of 2016, SMIC recorded profits for the 16th consecutive quarter with revenues of $634.3 million, an increase of over 24% year-on-year.
August 2016
People in the printed circuit and electronic packaging industries often ask me about re-shoring. My response generally is that re-shoring is a myth. It seems that whenever I try to contact someone by email I get an automated response stating, "I am currently in China and will return to my office on......"
Many of the facilities and much of the equipment that would be needed to reshore have been auctioned off or sent to the scrap heap. Those that operated them have moved on to other jobs. Some have gone to work for Chinese companies.
Further, reshoring intimates bringing back something. However, technology does not stand still. Advances in fabrication processes and equipment require major expenditures to produce today's, and tomorrow's products. Major firms, such as Apple have announced intentions to establish independent research facilities in China. Production often follows within the region of successful R&D. What seems to be occurring is not reshoring but new activity to establish new companies, manufacturing operations and produce product - albeit on a very modest level. However, with a sluggish economy, high corporate taxes, and overly burdensome government regulations there are few venture capital sources available for such efforts - especially in the uncertainty promulgated by the current election year.
In fact, affordable financing to modernize and upgrade America's smaller PCB enterprises is largely unavailable.
We must also consider the question posed by Andrew Strong an Associate Director of Cambridge Consultants when we think about reconstituting older manufacturing plants for potential reshoring: "Repair, Replace Or Re-Invent?" I would suggest, assuming that the products to be made have sufficient competitive market longevity, replace with improvements based on recent developments, automation, design changes, new materials, and lean manufacturing principles - assuming sufficient financing is available.
Reshoring continues to be a very "hot topic".
A member of our 2,500+ Linked-In network members wrote the following thought provoking and incendiary comment: "Reshoring for electronics manufacturing doesn't make sense due to high levels of process automation, extensive and effective supply chain already established, end product unit value to weight ratio enabling low unit shipping cost and relatively smooth global logistics.
The issues with establishing new manufacturing for other products in the USA are highest corporate tax rates, increasingly difficult regulatory positions discouraging small businesses and startups, government interference in attempting to ' pick winners', and uncertainty about the sustainability and competitiveness of our free market capitalism as we continue to follow the European socialists countries into oblivion."
Another colleague of the past half century sent an interesting response to the "silent complaint" story linking it to reshoring. We posted it on our "Comments & Discussion" page.
What do YOU think? Do you wish to engage in this vital conversation? Should we redefine the challenge? Do you have a workable solution? Let us know!
Somethings to watch !
The DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a section of the National Defense Authorization Act for Fiscal Year 2016 that makes contractors and subcontractors subject to approval (as well as review and audit) by appropriate DoD officials when identifying a contractor-approved supplier of electronic parts.
Apple will have to pay up to $14.5 billion plus interest in back taxes to Ireland after the European Union found on August 30 that the U.S. technology giant had paid next to no tax across the bloc's 28 countries for over 11 years. The ruling is a dramatic escalation by the EU executive Commission in its battle to have multinationals pay their fair share in the region, where popular outrage over alleged corporate tax dodging is common after years of financial crisis and austerity budgets. The EU says that many multinationals — including Starbucks, Fiat, and Amazon — struck deals with EU countries to pay unusually low tax in exchange for basing their EU operations there. Ireland's government said it would appeal the decision, arguing it had granted no favorable treatment to Apple. February 13, 2017.
The EU also risks fueling tensions with the U.S., which argues that the EU is singling out American companies. The U.S. Treasury Department voiced disappointment, saying retroactive tax assessments by the EU Commission "are unfair, contrary to well-established legal principles and call into question the tax rules" of the individual countries in the EU. The Irish finance minister, Michael Noonan, said he would seek approval from the Irish Cabinet to legally challenge the EU Commission's ruling. (Source AP)
If appeals by Ireland and Apple (which is certain to follow suit) are not successful, whatever taxes Apple and the EU agree upon (there will most likely be a negotiation) and Apple pays will be deducted from its U.S. taxes.
Nano Dimension Ltd. announced that its wholly owned subsidiary, Nano Dimension Technologies, has supplied the first DragonFly 2020 system designated for 3D circuitry and PCBs. The system was delivered to a leading defense company in Israel for production evaluation purposes. To date, Nano Dimension has proven its capabilities of printing multilayer circuits only in lab conditions.
We are tracking this carefully and expect a progress report on its performance at the Executive Forum presented by the IPC's Hall of Fame at IPC APEX in San Diego.
A recent conversation with colleagues on this topic reminded me of days gone by when Burroughs and Motorola squeezed their PCB makers and supply chain so hard for price reductions – then moved the orders elsewhere – that the board makers folded, and some suppliers vanished.
In July, Apple reported a third-quarter profit of $7.8 billion, compared with $10.7 billion in the same period a year ago. Revenue from the iPhone was down 23%. “Currently, Apple’s profits are declining, and the effects of this decline have been passed on to suppliers,” a New York’s China Labor Watch report says. Digitimes reported this summer that Apple suppliers were feeling more pressure to reduce costs.
News from Taiwan
NanYa PCB reported July sales of $77.46 million, about the same as June's sales, but up by 7.5% from July 2015. Losses for the 2nd quarter were reduced to $7.32 million from the $10.2 million loss the previous quarter.Low order levels for the iPhone during the first half of 2016 are negatively affecting the sales of a number of FPCB suppliers including Zhen Ding and Flexium.Flexible printed circuit board (FPCB) producer Ichia Technologies had consolidated revenues of $17.2 million for July, up 4.48% for the month but down 13.2% from 2015 on the year to date. In July, sales of integrated chassis components totaled $4 million, while sales of FPCB products reached $13.5 million. Accumulated Y-T-D 2016 revenues were $106 million, down 24.45% from the previous year. Automotive board supplier Chin-Poon Industrial increased its holdings in Draco PCB Public its Thai subsidiary, from 52.5% to 75%Compeq Manufacturing had sales of $115 million for July.PCB maker Apex International has reported net profits of $4.078 million for the second quarter of 2016, up 26.7% on quarter and 65% for the year to date. The company's July revenues were $29.1 million for July, up 33.7% over July 2015.
The value of PCB products produced by Taiwan-based producers in China and Taiwan is expected to increase 8.8% $4.54 billion in the 3rd quarter.
Cisco Systems says it will lay off 5,500 employees, 7% of its 78,000 workers. The internet equipment maker is scrambling to adapt to technology changes that have reduced demand for its main products. This will most likely soon effect a number of its bare board suppliers in China.The reason for the reduction in force is that Cisco’s business has been negatively affected by the shift of its corporate customers to remote data centers for their computing needs instead of their own online networks.
…and you think that producing lines and spaces of 50um is difficult?
Germany’s Heidleberg Instruments' µPG system is a micro pattern generator for direct writing DWL) applications and low volume mask making in the IC industry. It can generate feature sizes 500nm (that’s 0.02 mil or 0.5um) on photomasks. (However, please note MACRO is NOT always easier than MICRO! )
In the EMS world 2nd quarter M&A announcements included: PARPRO Corporation acquired Cal Quality Electronics; Tekmart Integrated Manufacturing Services acquired Sanyo Manufacturing’s injection molding facility in Tijuana; Cemtrex Inc. acquired Periscope GmbH; Flex sold its Valencia, CA high-mix microelectronics business unit to NEO Tech; and Foxconn Technology acquired TeleEye Holdings Ltd.
Summarizing EMS companies' Q2 results, and comparing them with the same period a year ago, we find that in the Large Tier (>$3 billion), Jabil Circuit showed the most improvement in operating margin to 3.2% from 2.9%; Key Tronic led the Mid Tier ($300 million to $3 billion) in operating margin improvement, up to 2.1% from 1.7%; in the Small Tier, (<$300 million) SMTC Corporation showed the most improvement in operating margin to 2.2% from 0.3%. (Source: Lincoln International)
When pruning is necessary to ensure survival, what is the best way to do it?
Should every enterprise survive? Nothing is forever!There is now huge overcapacity in board building enterprises. The world's largest contract assembly/box build companies invested heavily in facilities and labor to satisfy the demands of one or two surging customers. Now there is more competition. Markets are becoming saturated. Margins are being squeezed. Innovation is taking its toll.Who feels the pain when there is no more room to cut costs and still make a profit? What happens when the market declines or shifts? What will be the cost for change this time?
TRULY printed circuits by Xerox - a tool to combat counterfeiting Xerox® Printed Memory adds intelligence to objects by printing thin circuitry on a flexible substrate. The printed non-volatile memory can store up to up to 36 bits, which translates to 68 billion distinct data combinations. Data is preserved until overwritten within a 10-year span. Everything from lot codes and serial numbers to expiration dates and geographic codes can be stored on it. The tiny printed memories can be used at labels on products to protect brand names.
The company states that already exploring printed electronics with more advanced capabilities.
IP PROTECTION in China? Better late than never?
Beijing's intellectual-property regulator has ordered Apple to stop sales of iPhone 6 and iPhone 6 Plus phones in the city, ruling that the design is too similar to a Chinese phone. Some mobile-phone stores in the city said they stopped selling the two models months ago, switching to newer models.
Apple is reported to soon end production of both models. The two iPhone models infringe on a Chinese patent for exterior design held by Shenzhen Baili for its 100C smartphone, the Beijing Intellectual Property Bureau wrote in a statement on its website dated May 19. (Source: Wall street Journal)
Apple lost the trademark suit in the Beijing Municipal High People's Court, which ruled that Xintong Tiandi Technology can continue to use the phrase “IPHONE” on its leather wallets and accessories, according to China-based Legal Daily. Chinese regulators reportedly shut down iTunes Movies and the iBooks Store last month. Billionaire investor Carl Icahn sold his entire stake in Apple, citing the risk of China’s influence on the stock.
SEMI continues to strengthen and broaden its supply chain reach SEMI has announced the appointment of Melissa Grupen-Shemansky, Ph.D., as Chief Technology Officer (CTO) for the FlexTech Group and for SEMI’s Advanced Packaging program. With over 20 years of experience in the semiconductor industry, Grupen-Shemansky will oversee FlexTech’s flexible hybrid electronics (FHE) and Nano-Bio Manufacturing Consortium (NBMC) R&D programs and technology advisory councils. Grupen-Shemansky will also serve as technical advisor to SEMI’s Advanced Packaging initiative and as technical liaison to NextFlex, the Flexible Hybrid Electronics Manufacturing Innovation Institute. Denny McGuirk, president and CEO of SEMI stated, “With the convergence of technologies and the broadening of microelectronic applications, Melissa will ensure that we are serving our industry’s needs, as well as identifying technology trends and inflections.”
NEPCON China held in Shanghai the last week of April was surprisingly the best in years. Pent up demand for pick-and-place equipment led the surge in active buying interest after a near drought in purchasing the past few years of the economic slowdown there. The next few weeks will tell just how real the show activity was as stated interest converts to orders.
Firan Technology Group (FTG) is buying the assets of Teledyne Technology's New Hampshire’s printed circuit technology business (Teledyne PCT) for $9.3 million in cash. For approximately 50 years, Teledyne PCT has designed and manufactured rigid-flex printed circuit boards and assemblies used in the defense, aerospace and oil and gas industries. For each of the last three years, the unit has generated between $15.0 to $20.0 million of annual revenue. FTG has two operating units: FTG Circuits is a manufacturer of high technology, high reliability printed circuit boards. FTG Aerospace manufactures illuminated cockpit panels, keyboards and sub-assemblies for original equipment manufacturers of aerospace and defense equipment.
Convoluted future for electric car batteries
Nissan Motor is reported to be in talks with Panasonic as well as overseas companies including Chinese firms over the possible sale of its 51% interest in Automotive Energy Supply Corporation, which makes lithium-ion batteries for electric vehicles NEC own the balance of the company. Nissan was said to be interested in selling the company because it would be cheaper to buy batteries for its electric vehicles from other makers.
Competition to supply batteries for electric vehicles is heating up due to expectations that a growing number of lower emission cars will be produced in the coming years. Tesla Motors, which currently procures batteries for its electric vehicles from Panasonic, is planning to boost its total vehicle production to 500,000 in 2018 - two years earlier than its original target.Nissan and Renault SA, under Carlos Ghosn, who heads both companies, have bet more heavily on electric cars than their mainstream competitors. In 2009 the two companies pledged to invest $4.43 billion to build models including the Nissan Leaf compact and as many as 500,000 batteries per year to power them.
Reuters reported in 2014 that Ghosn was preparing to cut battery production by AESC and instead use packs made by LG Chem.
Another example of the expanding trend of distributors providing full services for the shrinking footprints of equipment and chemical producers.
JUKI Automation Systems, a worldwide supplier of SMT placement systems and production solutions, and full service distributor ETEK Europe Ltd. bundle their competences in order to strengthen their local presence in the markets of the United Kingdom and Ireland - and to further expand their common growth potentials. ETEK provides sales, maintenance, repair, and installation services for its principals. It provides customer training at its the 14.000 square meter Technology Center in Prestwick, Scotland.
Mycronic AB will acquire 75% of Shenzhen Axxon Automation Co., Ltd. (Axxon) for approximately $51 million in cash from its own funds. Mycronic will obtain the balance of the shares over the next 3 years. Axxon develops, manufactures, and sells dispensing equipment for the electronics industry and is a leading supplier to the SMT market in China.
China represents approximately 40% percent of the global dispensing market worth several hundred million dollars.
Materials matter
The Strategic Materials Conference (SMC), themed “Scaling Challenges: The Future of Materials and Packaging” will be held at the Computer History Museum in Mountain View, California on September 20–21. This year’s event will focus on emerging materials and packaging technology trends across the entire microelectronics supply chain. Speakers will include Dr. John Hu, director of Advanced Technology, Nvidia, Ingrid Y. Shi, secretary general, Integrated Circuit Materials Industry Technology Innovative Alliance, China, and Dr. Anton DeVilliers, senior Technologist, Lithography, Tokyo Electron America.
The Silent Complaint
There have been many books written on marketing and niche marketing, sales, new product introduction, product promotion, customer satisfaction, after sales service, building a business. But there have been fewer written on the silent complaints: No calls, no RFQs, no orders, or re-orders. Just a deafening silence. A void where vibrant business communications fail to materialize.Months and years of planning, R&D, and work can go down the tubes due to the inaction or inappropriate action of one employee, often a senior manager of a business unit.
This can often simply be a lack of response to an inquiry. There are a number of appropriate ways to deal with an inquiry. Respond directly by phone or email, refer the matter to another person to handle it – and advise the inquirer of your action, or, even say that you cannot provide the requested information. Whatever you choose to do, DO NOT just ignore it! That is rude and reflects badly upon your company, as well as upon you.
If one wished to be sure that the arrogant message of how unimportant the business prospect may be, repeat the silence when the inquirer follows up on his original unanswered query.
There is another way you can negate the work and accomplishments of your colleagues while lessening chances of success of your company. Make a promise or commitment, e.g., “I am away on a business trip, but will respond next Tuesday.” Then do nothing.
Did you say that I exaggerate? Do you think that this doesn’t happen in the real competitive world? Well, I must tell you that it does. I have personally experienced both of the above examples from the “Head of Operations” of a business unit of an otherwise reputable company. Maybe this behavior is another unintended consequence of the digital age and the dehumanizing and depersonalization of conducting business.
What do you think?
In any event, my impression of the company in the aforementioned example is now one of unreliability.
September 2016
Solving Problems In High Density Electronic Packaging
This month I was a guest at the High Density Packaging Users Group (HDPUG) meeting in Nashville, TN. The consortium, composed of more than 50 companies (small and large) in the
electronics packaging supply chain conducts projects to solve real world problems or develop data for product parameters, package/component life, and production processing. All status presentations
were short and to the point. HDP announced the impending completion of 8 of its projects. Different companies around the world recommend and participate in the projects of import to their businesses.
The results are available for use to members only. The rapidity and output of this particular consortia surprised me. It clearly appears to provide an affordable solution for problem solving and data
development in the day of vanishing R&D (especially D) funds.
Lincoln International Adds an Innovative and Global Joint Venture & Partnering Practice
Lincoln International, the leading global, mid-market investment bank, announced today that it has added a new global capability in joint venture ("JV") and partnering advisory service.
Lincoln International’s JV & Partnering Team’s expertise spans the entire JV and partnership lifecycle, from creating sustainably successful new JVs in emerging economies, to resetting,
restructuring and exiting existing JVs and partnerships, globally. A particular area of focus for the team will be driving improved value from the diagnosing and resetting of terms and operations of
individual (or portfolios of) underperforming JVs, partnerships and minority stakes.
The reshoring conversation continues.
Here are comments from the industry icon that has visited more printed circuit factories in the world, everywhere in the world, than any other industry member. I have a comment or two on
reshoring. My boss at Photocircuits used to drive me out of my office by saying "You cannot do business sitting on your rear!" Seeing is believing. In the early 1990's, I attended one of IPC's
activities and commented, "Watch out for China in the future". One of the audience stood up and said, "Hey Naka, we've got technologies, let Chinese take care of the cheap and dirty stuff". Where is
he now?
China made about $450 million worth of PCBs at that time. It produced $29 billion in 2015. The North American PCB output peaked in 2000 at about $12 billion. In 2015, it made only $2.6
billion (actual production plus $500 million in imports for resale by PCB makers). There are now only two fabricators in North America that have revenue (made in North America) of more than $100
million. Jiangsu Suhan, ranked 50th in China, had revenues of $110 million!
Since my native tongue is not English, I don't know exactly the meaning of word "reshoring". Using my maximum imagination, "reshoring" is to shut down the plants built in foreign lands and
bring the business (maybe equipment as well) back to your home land. There have been a few new PCB plants built in the United States in the last few years. I vaguely recall one in Texas, one in New
York (GE Medical?) and one in New Hampshire. They are all very small. In my interpretation of reshoring, these are not "reshored" plants.
According to sources, GE Medical got fed up with PCBs sourced from China. I heard the rumor that the Chinese supplier offered 11 pieces for the price of 10. This happens when a buyer keeps
looking for cheap suppliers. Now, look at U.S.-headquartered PCB materials and equipment suppliers. More than 80% of chemicals for PCB are now produced in Asia Pacific, mostly in China. We have only
one copper foil manufacturer in the U.S.: Oak Mitsui, whose emphasis is more on thin copper foil for car batteries.
Where does DuPont (sorry, now Dow Chemical) manufacture dry film products which it invented in 1968? How about laminates? U.S. makers dominated the world in the 1960's through part of 1980's.
Only Isola, Park/Nelco and Rogers remain in the U.S. soil, and the latter is making more and more overseas. The majority of Isola and Park's production is made in Asia.
How about equipment? Excellon which dominated the world is still surviving with a spare parts business and a few mechanical and laser drilling machines sold only in the U.S. What happened to
multilayer press makers? TMP, Wabash, Pasadena, and so on? Chemcut is still surviving at the corner of Pennsylvania, but I saw only a few etching machines in Asia made by Chemcut. ESI is doing better
than the rest of US equipment makers, but most of its laser drilling machines for the PCB industry are made in Singapore. DIS based in Long island is doing exceptionally well in the international
market against ADARA.
ESI and DIS are the only U.S.-based equipment makers I see often at PCB fabricators operating in China whose output accounts for more than 45% of the world output. What I am driving at is
that if some dreamer tries to build a good size PCB plant in the U.S. soil, he has to import practically all materials and equipment from Asia Pacific. Despite the labor laws in China regarding
overtime, factory workers in China still work 12 hours a day and 6 days a week. Unfortunately, labor costs have been rising continuously in China, which is propelling factory automation. Robot panel
loading is becoming a common scene in China (VCP plating, AOI, router, etc). Many have adopted the spray coating of solder mask inks, which allows total automation for this function.
I recently visited a PCB factory in China. "Lay-Up" panels are unloaded onto a conveyorized de-pinning line, pins are removed, "lay-up" structure is taken apart and each panel is sent
automatically to a deburring machine, then carried into pre-cleaning and sent to a loading station where a robot mounts the panel onto a VCP plating line. This maker has an output of about
$120,000/employee/year, about 2 times the average of Chinese PWB factory output. But, this takes a lot of costly "internal" development and requires strong financing. Is there any U.S. PCB maker
which can afford to or is willing to build a system like this today?
There are several U.S.-based PCB makers operating overseas, mostly in China. TTM Technologies, Multek, Sanmina, 3M, Amphenol PCB, and MFlex (mistake, this was recently sold to a Chinese metal
stamping company). These are the ones that I know. If these makers shut down any one of their plants and bring back the business to the U.S. soil, this would be true "Re-Shoring". Do they
have plans to do this? Hell no! On top of this, many U.S.-based PCB makers have partners in China (or should I say subcontractors?).
PCBs bought by these U.S. based makers and sold in the U.S. amounts to no less than $500 million a year. There will always be a need for PCBs made locally for logistical reasons.
Design/develop stage, pre-production, design change iterations, small quantities, quick delivery, etc. are some of the reasons for locally made PCBs. But, once the volume begins to build up, "price"
becomes everything. Price comparison of PCBs made in China and the U.S. is not easy because the quantity is normally different. However, hypothetically, for larger volumes, say more than 1,000 panels
per order, the Chinese price is invariably 30% cheaper.
Except for some very special products, every PCB made in the U.S. can be made in China if there is a need. I have seen 116 layer probe cards in China! I have seen 84 layer backplanes! 34
layer rigid-flex circuits!
Well, let's forget about these endless bashings and stop complaining. The fact is, the U.S. PCB industry is still reasonably healthy – but frail. Many small shops are profitable. The bottom
line is profit. Let's keep it that way. Many Taiwanese makers make profits of more than $200-300 million "after tax". If they want to, they could use a large chunk of these profits for investing
further - mostly in China.
There is only one Taiwan PCB maker that has shut down its China plant. Boardtek, because its Chinese workers could not make the types of boards it fabricates at a high enough yield. Unitech
chose YiLang, Taiwan, for a new plant several years ago. It has recently broken ground (on 150,000 square meters of land) in Nantong for a new plant. Dynamic broke ground in Huangxi, Hubei
Province, in June to build a brand new facility with a final capacity of 5.5 million square feet per month. Unimicron and Wus built plants there, too. AT&S's Chongqing plant is
gigantic.
Even Taiwan and some European makers are not at all considering reshoring. My final remark: PCB manufacturing is a volume business if a manufacturer wants to grow sale revenue. Our current
production capacity has been cut down to 1/4 of its peak time in 2000, during which we had about 96,000 people working in our PCB industry. Today, it is somewhere 23,000, plus or minus a few, by
adjusting with part-timers. IBM Endicott used to spend $100 million each year in the 1980's for PCB technology development with 600 R&D people. Today, the surviving entity is called i3 and has
only $30+ million in revenue. Hewlett-Packard once had 11 plants worldwide. The last surviving plant (Multek Germany) was shut down three years ago because it kept losing money despite its high
technology profile. Viasystems shut down all the plants in North America and Europe. Now it is a part of TTM Technologies.
If and when the management of TTM, Multek, and/or Sanmina decide to shut down their overseas (China) plants and bring back the business to the U.S., I will remove my hat and bow deeply,
saying "I was wrong". ----- Dr. Hayao Nakahara, President, N. T. Information, Ltd. PCB West's attendance increased for the 7th year in a row to nearly 2,000 - the show's highest turnout in 14
years.
Technical conference registration rose more than 20% year-over-year. Attendees gravitated toward sessions on resolving fundamentals and practical solutions to engineering and design problems.
More than 24 designers underwent IPC certification during the conference as well. The sold-out show floor featured more than 100 companies occupying 110 booths.
Ah, the wonders of government speed and accuracy in evaluating critical programs for the nation's security: the military electronics supply chain
The U.S. Department of Commerce, Bureau of Industry and Security, Office of Technology Evaluation presented the preliminary results of its Defense Industrial Base Assessment "U.S. Bare
Printed Circuit Board Manufacturers" at PCB West 2016. The study was initiated at the request of NAVSEA Crane, the Executive Agent for Defense printed circuit boards. The report provides a reasonable
view of the industry based upon a large number of interviews. It does not mention the likelihood of losing another 20 to 25 domestic fabricators in the next year or so, but does anticipate that
possibility over the next four years. It does not discuss the fragility of the domestic bare board supply chain, but does show that capacity utilization of small board shops is under
50%.
The DoC is reported to be engaging a consulting organization not familiar with the industry, rather than one familiar with it, to take the next step forward. It seems like the U.S. Government
has made it to the 50 yard line and now is going back to the 5 yard line, despite a new Defense program of openness and cooperation – for instance the new Defense Innovation Units in San Jose,
Boston, and coming to Austin. There still seems to be too much "stove-piping".
Challenging national initiatives
With the announcement of "National Guideline for IC Industry Development" and “Made in China 2025” initiatives, the China government and industry are set to significantly improve
self-sufficiency for integrated circuits (ICs) manufacturing in China by 2025. This stimulated recent China M&A activity across the semiconductor manufacturing supply chain (Spreadtrum,
OmniVision, ISS, Mattson Technology, STATS ChipPAC), new investments by Chinese companies (SMIC, XMC, etc.), and investment in China factories by multinationals (Intel, Samsung, SK Hynix, TSMC,
GlobalFoundries). (source SEMI)WL-FOP gaining market share rapidly
The 40+% gain in performance of Apple's A 10 processor, largely attributed to TSMC's use of this packaging technique, is spurring demand for this reduced cost packaging approach. If it
demand continues to spread at this rate it will most certainly affect in laminate suppliers (negatively) and boost wafer lever substrates suppliers.
Prices going up again even as many Chinese shops struggle to break even while avoiding layoffs - this sounds sooooo familiar
There has been a huge increase in activity by Chinese fabricators soliciting business in the U.S. a number of companies are going direct, bypassing brokers. Some have already
transferred employees here or are opening ne offices. They will have a presence at IPC APEX EXPO in February.
Most PCB factories which had a materials price increase in March have received new price increase notifications from Guangdong Kingboard Laminates and Shengyi Technology according to sources
in China. This has raised widespread concern in the industry. CCL, PrePreg (PP) and copper foil prices are going up 5%-10%.
Shengyi's new plant in Changshu will start production this quarter adding 11 million square meters of capacity. This will increase the company's output potential to more than 80
million square meters per year!
Copper foil price rises are said to be the primary causes of the current increases. Cu foil represents around 30% of the cost for 0.062＂ CCL, and 50% of
0.039＂CCL.
Until recently copper supply exceeded demand.Now copper shortages have significantly increased due to demand by the lithium battery market. Some shortages have
appeared. Some suppliers of copper foil are said to have transfered some production from the PCB copper foil to lithium copper. However, lithium foil capacity expansion is lagging behind supply
and demand. This has resulted in foil producers to collectively being unable to meet the CCL and PCB production demand. Result? Copper prices are increasing.
Currently raw material costs are about 40% of the PCB. In this case, some of PCB factories may choose to absorb the increases by themselves, others may need
to charge their customers more. The situation has caused hoarding of CCL. This, in turn, causes a longer lead time than usual. Normally 3-5 working days are needed to purchase raw
materials. Now 5-10 working days, sometimes even longer periods are needed.
Dell Inc. completed its $60 billion deal to acquire EMC Corporation, the largest technology merger in history. The new company, to be named Dell Technologies, plans to be a one-stop shop
for information technology sold to business. The company employs about 140,000 people globally and will maintain operations in Hopkinton, Massachusetts where EMC was located. With $74 billion in
revenue, Dell Technologies will be the world’s largest privately controlled tech company.
Nan Ya Plastics will acquire the remainder of its ownership interests in its two PFG Fiber Glass joint ventures from PPG by year-end. Nan Ya and PPG each hold a 50% stake in the JVs. PFG
manufactures yarn fibers for laminates and fiber-glass reinforcement materials for automotive applications. It has production facilities in Chia Yi, Taiwan, and Kunshan, China.
Ventec International Group has doubled its B-series Insulated Metal Substrate (IMS) materials production capacity at its Jiangyin, China facility. The company invested $2 million to double
its IMS materials production capacity.
According to Research and Markets in Dublin Sales of conformal coatings will increase to $12.3 billion by 2021 on demand for printed circuit boards and automotive products. "...the need
for conformal coatings on PCBs for better performance in vulnerable environments have been the key drivers for the dominance of the electronic industry in the conformal coatings market," the research
firm said.
Update From Productronica India
The bare board market in India is now $1.2 billion of which only $360 million is made domestically. The market size is optimistically forecasted to quintuple to $6 billion by
2020 as there is a strong push by local industry and governments (local and national) to increase the percentage of domestic production. There are currently over 200 PCB fab companies
in India of which about 60% are classified as "small-scale" industry. Infrastructure for bare board fabrication is still a problem as key high tech supplies such as copper clad laminates and dry film
photoresist must come from abroad.Most domestic PCB production is made from FR-4 and is low-tech, 4-layer (or slightly higher).
Chinese telecoms giant Huawei Technologies will start to make smart-phones in India next month joining a wave of compatriots setting up in one of the world's biggest mobile phone
markets. The plant will be operated with the Indian arm of electronics manufacturer Flextronics International in the southern Indian city of Chennai, Huawei said in a statement. As growth in China
stagnates, India, the world's fastest-growing smartphone market, is providing Huawei and rivals like Xiaomi with new expansion opportunities.
HP is buying Samsung Electronics' printer business for $1.05 billion. Samsung has agreed to make an equity investment of $100 million to $300 million in HP through open-market stock purchases
after completion of the sale which is expected to close in less than a year - subject to regulatory approval.
Back to the drawing board
Camtek will reorganize its current mode of operation with respect to its functional inkjet technology (FIT) activity. It will cease supporting the four Gryphon systems currently
installed at customer sites, and will re-focus on creating the next generation of digital printer. Camtek estimates that the development of the next generation printer will take approximately 18
months. Rafi Amit, Camtek’s Chairman and CEO, commented, “Based on feedback we gathered from the four customers that have been evaluating the Gryphon system and in order to increase the addressable
market, we have decided that there is a need for a significant redesign of the system, the process and the ink. This will enable us to better gear the technology to market requirements. The project
run rate savings going forward with the change are expected to be $2.5 million.
The D2P (Design 2 Part) show in Marlborough, Massachusetts had far fewer, 3D printing displays and a well as fewer bare board fabricators. Most of the 18 EMS companies including one from
Australia, reported good , sale s this year one attributed it to its "open sourcing" policy. This company was operating at a one plus shift capacity said. it stated that it showed its customers its
margins on the services performed for them. Attendance seemed light.
Return of the reps?
The first thing that I saw after picking up my badge at the D2P show was a board with a sign "REPS WANTED". On it were twenty-two 5"x7" cards describing the company, the opportunity,
and the company's booth number where further information could be obtained.
Last month's NEPCON South China was busy - with "tire kickers". There was a lot of interest in the products shown, but few buyers as the industry continued in its doldrums outside of a few "hot
spots" - automotive, military, and medical. There did not seem to be any grousing about the 2 year wage freeze imposed by the government after years of mandated increases of 18-20%.
Gaining tractionFan-out wafer level packaging (FO-WLP) continues to expand market penetration in a wide variety of formats developed by TSMC, Deca Technologies, ASE, STATS ChipPAC, and
Fraunhofer.It's still all about the carSingapore’s nuTonomy became the first company to put autonomous cabs on the street. U.S. tech giants Uber and Google were expected to follow shortly thereafter.
The initial tests involve a dozen vehicles in a 2.5 square mile zone with an observer on board and a restricted destination list. Can you imagine the number of lasers, radar devices, sensors,
circuits, transmitters, and new electronic packages that will be required for vehicles in the very near future? Automotive electronics will exceed 9% of the approximately $1.5 trillion global
electronic systems market.
October 2016
If this page looks unfamiliar to you it's because we are in the midst of a redesign and software change. Our "old, tired site" is no longer properly supported by our "host" of more than a decade, so we are now engaged in the necessary transition to keep Weiner's World and the comments it elicits coming to you.
Continental Automotive's Technical Manager Mike Mayer will to be one of the featured speakers at the IPC's Executive Forum for fabricators and their supply chain in San Diego February 13, 2017!
This year’s TPCA (Taiwan Printed Circuits Association) show held October 26-28 seemed to have lighter attendance than last year. Robots were on display everywhere with lot of loaders and unloaders as well as the multi-axis multipurpose types. Equipment took sales surged up the past 30 days with orders from companies that subcontract to Apple, Huawei, and others. This was attributed to Samsung’s Galaxy Note 7 problems and the resulting recall and exchange program. We'll provide any added interesting information as we speak to several attendees during the next few weeks.
IDC Manufacturing Insights' latest report titled “Robotics in China Industry” states that the adoption rate of robotics in China's manufacturing industries will grow by 150% by 2018. This research is published under IDC’s Manufacturing Insights’ worldwide commercial robotics program. “The rise of robots in China can be attributed to three pull and push factors respectively", said Dr. Jing Bing Zhang, Research Director, Worldwide Robotics and Asia Pacific Manufacturing Insights, IDC Asia/Pacific."The three pull-factors are the rising labor cost, increasingly aging population, and global competition, whereas the push-factors are national initiatives, innovation, and investment in robotics," added Zhang. Engineering-oriented value chain (EOVC) companies are currently the largest adopters of robotics in China, primarily due to the complexity of the products and manufacturing processes used.
I wish that I had thought of this decades ago. Apparently someone has finally decided to do something about solving the old adage “When all else fails, follow the data sheet!”
Analog Devices and Mouser are cosponsoring a free webinar titled “How To read A Data Sheet” November 9 at 12:00PM ET. This wide-ranging and informative webcast will take you through a typical datasheet and explain the full meaning behind many often misunderstood specs and sections. It is designed for students and younger engineers who are at the beginning of their careers, more experienced engineers who are in a mentorship role that need to educate younger engineers and engineers who might be moving into a new product or application area.
TTM’s acquisition of Viasystems is one big PCB merger that seems to be working well - margins are up even as sales decline a bit.
TTM had 3rd quarter revenues of $640 million with an increased gross margin of 17.1% up from 15.0% a year ago for the same period. Advanced technology (HDI circuits) was 35% of sales versus 29% the previous quarter. Its top 5 OEM customers were AAPL, Autoliv, Bosch, CSCO, and Huawei according to Needham & Co. Book-to-bill at the end of the quarter was 1.06 – a positive sign for the next quarter’s sales. Factory utilization in North America dropped 2% to 57% while it increased in Asia to 80% from 74% last quarter.
NextFlex, America’s Flexible Hybrid Electronics (FHE) Manufacturing Innovation Institute, announced that it has partnered with California Manufacturing Technology Consulting (CMTC), a Hollings
Manufacturing Extension Partnership (MEP) center in Torrance, Calif., which has been awarded a grant by the U.S. Commerce Department’s National Institute of Standards and Technology (NIST) to help
small- and medium-sized manufacturers.
NextFlex Director of Commercialization, Paul Semenza (who will speak at the IPC’s Executive Forum in February) said, “We’re looking to develop approaches for engaging small manufacturers with
NextFlex through hands-on assistance and services, and cultivate an enhanced nationwide network of partnerships among NextFlex and MEP centers. We will work closely with them, and MEP centers in
Indiana and Georgia, to develop programs that enable small manufacturers to adopt FHE technologies, and benefit from NextFlex activities.”
The Taiwan External Trade Development Council (TAITRA ), Taiwan Exhibition and Convention Association (TECA), and the Taiwan Printed Circuit Association (TPCA) have co-organized a Taiwan Trade Mission of the PCB & Electronic Connection Industry to Germany. They will hold two B2B match-making meetings there The first will be held in Düsseldorf on November 8 and the second in Munich on November 10.
Taiwan’s delegates to the events will include Argosy Research Inc., Chin-Poon Industrial Co., Ltd., Eastern Electronics Co., Ltd., Epotek Electronics Co., Ltd., First Hi-tec Enterprise Co., Ltd., Hantic Precision Technology, Inc., Ker Yih Co., Ltd., Plotech Technology Co., Ltd., Subtle Electronic Co., Ltd., UDE Corp., and Unitech PCB Corp.
China’s and Taiwan’s Fall busy season for electronics still shows negative growth (down 4%) when compared to last year.
Bankruptcy filings by U.S. businesses soared 38% in September from a year earlier in an ominous sign of a weakening economy says Wolf Richter, editor of the Wolf Street Blog. Last month’s bankruptcies reached 3,072 to bring the year-to-date total to 28,789 and marked the eleventh straight month of increases from 2015, according to data from the American Bankruptcy Institute.
Qualcomm has agreed to buy NXP Semiconductors for $47 billion in an all-cash deal! This purchase is the largest in the history of the semiconductor industry!
Qualcomm is the largest maker of smartphone chips. NXP serves the auto industry. The combined companies will be THE major player in the growing market for car infotainment systems and internet-of-things devices while remaining a key supplier of chips for mobile phone . The combined company's annual sales are projected at $30 billion.
This merger is just one in a string of multibillion dollar deals in the tech industry during the past year and a half. These include Intel's takeover of Altera, Carlyle's buyout of Atotech, Avago's acquisition of Broadcom, and Dell's $67 billion takeover of EMC.
Sun Chemical and its parent company DIC have acquired Gwent Electronics Materials. Gwent's European-based production sites will boost Sun Chemical's supply chain position for conductive ink, paste, and powder manufacturing capabilities for printed electronics.
HP Inc. said it expects to cut about 3,000 - 4,000 jobs over the next 3 years as it continues to struggle to maintain profits in a “subdued” printer and personal computer market.
On again, off again on again.........
Foxconn Electronics is talking about major investments and expansion in India...again. It now states that it will build a plant that will start volume production of iPhones in the 4th quarter of 2017. It also plans according to a Chinese language Economic Daily News (EDN) report. Foxconn plans to invest up to $5 billion to set up about a dozen production plants in India by 2020. This will include the renovation of the old Nokia and Sharp facilities in Chennai to produce a combined total of 100 million mobile devices per year.
The Worldwide smartwatch market decreased 51.6% to 2.7 million units in Q3 2016 when compared to Q3 last year according to data from the International Data Corporation.
Chip business continues strong but this no longer totally directly relates to board production.
SMIC announced an expansion project for its Tianjin, China facility. Currently running at full capacity, SMIC says that the foundry claims will become the world's largest 8-inch wafer fab. Currently running at full capacity, the facility will have an output of 150,000 8-inch wafers/month when the expansion is completed. The planned capacity expansion is to support demand for fingerprint sensors, power management IC, mixed-signal chips, automotive electronics- and IoT-related solutions.
China’s wearable device shipments increased more than 80% in Q3 to more than 9.5 million units. Shipments will surpass 500 million/year by 2021.
China's economy steadied in the third quarter, posting a 6.7% growth fueled by easy credit and other stimulus measures. The third-quarter pace matched that of the second quarter and is said
to meet economists' expectations.
There is renewed interest globally in conductive ink-based metal mesh transparent conductive films. This is because technology and application developments are making this approach more competitive.
Capacitive touch technology is reaching the large-sized end of the market, with many touch tables and touch TVs now being prototyped or sold. This changes the technology requirements because such
touch tables and TVs are likely to be heavily used in public spaces. This means the users may tolerate seeing visible metal mesh linewidths, thereby relaxing the linewidth requirements to a range
easily achievable using direct printing.
What do they have in mind?
France's Total sold Berlin-based Atotech to the Carlyle Group, a private equity firm, for $3.2 billion. Atotech, with annual sales of $1.1 billion in metal finishing chemicals and
equipment to the automotive and printed circuit industries, has about 4,000 employees - primarily in Europe and China.
German printed circuit board manufacturers reported August orders rose 27.5% year-over-year, says ZVEI PCB and Electronic Systems. Sequentially, orders were up 7.9%. PCB manufacturers’ sales were up
5% year-over-year and 7.9% sequentially. Year to date through August, sales were down 0.8%. The August book-to-bill ratio reached a new high for the year of 1.17. The ratio suggests future growth in
the sector.
The 14th Electronic Circuits World Convention will be held in KINTEX, Goyang City, S. Korea from April 25 to April 27, 2017 along with KPCAshow hosted by Korea Printed Circuits Association (KPCA) as
well as World Electronic Circuits Council (WECC).
From Japan
NEC has developed a new high efficiency lithium ion battery for use as the power source of industrial use drones. It is said to increase flying time over existing power sources by
33%.
Renesas Electronics has unveiled a new compact wireless charging system for wearable and healthcare devices.
Toppan Printing will enter the biosensor business utilizing piezo electric devices. The company sees a major potential in the medical and healthcare markets.
November 2016
Here we go again! The winter holiday (and trade show) season is upon us! *Electronica's mood was upbeat. Next, the Asian and San Diego shows.
*One of our colleagues stated that Electronica is the best show to meet over 80 Chinese PCB makers, many of which even I never heard before...and my attention is on PCB makers.
We just received word as we were preparing for our trip to next month's HKPCA/IPC event in Shenzhen China that the CPCA (China Printed Circuit Association) show suddenly changed its March 2017 date and venue. It is now no longer colocated with the SEMICON show in China, but will be held March 7-9, a week earlier , at the new National Exhibition and Convention Center instead of March 14-16 at the Shanghai New International Expo Center. apparently SEMICON wanted more space and the government offered the CPCA a great price to make the change.
Meanwhile, the HKPCA show, now billed as our industry's largest event, will have nearly 550 exhibitors - of which 20% are new.
The annual member meeting of the HDP* USER GROUP INTERNATIONAL, will be March 1-2, 2017 in Sunnyvale, CA USA. The meeting will be hosted by Juniper Networks on its campus.
*High Density Packaging consortium.
A new look at IoT?
Mentor Graphics has published a very helpful "white paper" The Internet Of things For Electronic Manufacturing. It addresses overcoming the bottleneck of establishing efficient machine-to-machine and machine-to-human communication.
January 18-20 will see the 46th NEPCON JAPAN show host 2,270 exhibitors in six concurrent shows: Wearable Expo, RoboDex, Automotive World, Smart Factory Expo, Light-Tech Expo, and NEPCON JAPAN.
The triennial 14th Electronic Circuits World Convention will be held in KINTEX, Goyang City, South Korea April 25 - 27, 2017 along with KPCA show. The event will be hosted by the Korea Printed Circuits Association (KPCA) and the World Electronic Circuits Council (WECC).
Circuit Connect has installed a 4 channel Maskless/Chime Ball Technology direct imaging (DI) system from Technica USA.
A number of familiar "players" showed their "complete" lines of specialty products for printed electronics at IDTechEx Printed Electronics held on November 16-17 in Santa Clara. These included Dow, MacDermid, and Sun Chemical. The latter showed a nanosilver ink designed for use with industry leading inkjet and aerosol jet systems, technology which utilizes printed conductors on packaging to interact with touchscreen enabled devices, and a value package designed to speed the design and development of membrane touch switches.
To the rescue
Wong’s Kong King Distribution has once again come to the rescue of hundreds of global printed circuit fabricators with the acquisition of global IP, manufacturing, service, and distribution rights for Multiline’s post etch ATP, OPE, and ECP punching systems. WKK which has distributed Multiline’s product in greater China for decades, has acquired the world-wide IP and manufacturing rights for these products formerly produced at Multiline's now closed New York factory. WKK has already started to provide technical service to customers in the U.S. and has established an American distributor to continue its support there. WKK will name a new Canadian distributor shortly. WKK has been manufacturing Multiline machines for the past 8 years under license from Multiline at their factory located in Champing China.
Finding employees and the millennials
Finding and hiring qualified employees has been a frequent topic of conversation this past year. Conversations in the printed circuit fabrication industry mention both the diminishing number of "grayheads" and the scarcity of young replacements and successors. Bob Ferguson, a seasoned executive of our industry and now CEO of BreakFree Strategies featured facts and recommendations for the hiring of millennials (those born between 1980 and 2000) in his newsletter this month. Some of them jolted me into thinking about how we, our businesses, and the millennials must change or we will find our enterprises dying of attrition or gobbled up by other concerns. The millennials, said to be the most educated generation ever, must also change and face the realities of working in a competitive world that has standards and rules (which can be modified - but not trashed).
I wonder if we have created a generation with a large number of unemployable "overeducated" people with unrealistic demands that lack the basic work skills necessary to rebuild a country's manufacturing structure. I yearn for the days when we had vocational schools training the technicians and support workers that we need. What do you think? Check out some of the opinions on our Comments & Discussion page.
As we predicted several months ago
Taiwan-based PCB makers, in response to price hikes by copper-clad laminate (CCL) suppliers, have raised quotes to reflect increased costs. China-based CCL maker Kingboard Laminates raised prices due to continual hikes in copper foil price. Prices for copper foil have significantly risen because makers have increased supply of more profitable copper foil used to produce lithium batteries for use in electric vehicles in the China market. (Digitimes)
M&A: Merger mania continues seemingly unbridled
Ampel Inc. has acquired Image Circuit Inc., a PCB fabricator based in Elgin, Illinois. Ampel is a 35,000 square-foot PCB fabricator headquartered in Elk Grove Village, Illinois.
Qualcomm is buying NXP Semiconductors N.V. for $47 billion in cash. NXP is a developer of high-performance, mixed-signal semiconductor electronics, with products and solutions in automotive, broad-based microcontrollers, secure identification, network processing and RF power spaces.
The combined company is expected to have annual revenues of more than $30 billion with positions in mobile, automotive, IoT, security, RF and networking markets.
Rogers Corporation announced that it had acquired DeWal Industries for an undisclosed price. DeWal has annual sales of about $50 million. DeWal makes PTFE, specialized polyethylene films, and unique tapes and specialty products for the industrial, aerospace, automotive, and electronics markets. Rogers' sales for the 3rd quater totaled mor than $165 million with a 37% gross margin.
After recalling millions of its Galaxy Note 7 smartphones, Samsung appears to be changing its future direction to enter the world of connected cars with the purchase of Harmon International for $8 billion. I wonder if their software will protect against unwanted intrusions.
Samsung Electronics also plans to invest more than $1 billion by mid 2017 to boost output of chips for mobile and other electronics devices in its Austin, Texas facilities.
SEMI initiated a special interest group (SIG) formed of members throughout the supply-chain – including Fabless, IDM, Foundry, OSAT, EDA, Equipment and Materials vendors– called the “SEMI integrated Packaging, Assembly and Test” Group or SiPAT Group. to address the ever increasing demand for smaller packages as Moore's law fades into the twilight. . Different applications in the vast field of the “Internet of Things” (IoT) – industrial, automotive, medical, etc. are posing increased challenges for both physical packages and the accompanying software.
The binary challenge as to which is more difficult in designing a new package, the physical system or the secure software, was said to be unanswerable according to a senior executive of Jabil in a recent conversation. We have since learned that the challenge of software security for IoT functions may have been solved by a "small" Florida company recently acquired by Analog Devices.
December 2016
Best wishes for a Happy Chanukah, a Merry Xmas, and a Happy, Healthy New Year to all of our friends and readers!
REMINDER: Discounted advance registration fees for the February 13 IPC's San Diego Executive Forum ends January 13, 2017. Register now to get the 20% discount for the event sponsored by members of the Raymond E. Pritchard Hall of Fame.
Designed specifically for executives of PCB and Flexible Circuit makers and their supply chains, its speakers and panel members have been selected to help you plan ahead and succeed in these rapidly changing and challenging times.
Rather than joining the annual forecast fray by attempting to provide guidance or guesses as to the outlook for the PCB and electronic assembly businesses in 2017, we thought we would provide a different year-end assessment. Here are a few thoughts for the new year and beyond by a long term colleague and friend of the past half century, Harvey Miller, electronics market researcher, consultant and founder of Fabfile Online.
“Is it 1980 Again?—Disruptive Electronic Manufacturing Tranformations Ahead!
Moore's Law is winding down in ways that will obsolete some industries and open enormous opportunities for others. But, Moore's Law is winding down asymmetrically 51 years after Gordon Moore projected an exponential increase in density resulting in exponential decrease in per transistor cost in that famous April 19, 1965 Electronics Magazine article.
Today the 51 year exponential decrease in cost per transistor has stopped and even begun to reverse as the cost of a new wafer fab approaches $10 billion. Yet, density increases goes on for now, largely driven by Intel's competition with Nvidia and Qualcom.
Look how far "stacked die" have come. Now there's a new buzzword--"heterogeneous integration" which includes photonic chips in the mix. High growth for embedded die Wafer Level Fan Out Packages (WLFOP) are predicted by the Yole Developpement group as well as by Dr. Nakahara's unparalleled antennae. They confirm high growth for WLFOP packages.
But the most disruptive development of all, driven by Moore's Law, will be embedded die in printed circuits. There are problems, but the cost and density rewards are so great they will come, and they will eventually displace much of today’s SMT and solder paste processes and materials.
Performance and reliability improvements are another bonus.
Watch Apple. It needs product encores in the worst way, and has the power and motivation to transform electronic interconnects in its race with Samsung and Amazon and Microsoft and the many Chinese up-and-comers.
Embedded die will lead to the merging of PCB fab and assembly!
Maybe we'll even see integrated OEMs again.” -----HM
It will be interesting to see if America’s independent printed circuit fabricators have an improved outlook as a result of the U.S. elections. One measure would be to see how many of the more than 150 shops and suppliers that are not IPC members take advantage of the Executive Forum’s February 13 program in San Diego (for board builders and their supply chain) offer of a 75% discount for first year’s membership in the IPC.
It was interesting to note that in Europe Lackwerke Peters (a supplier of conformal coatings and solder masks) rejoined the EIPC for 2017 after an absence of several years.
Observations from Shenzhen
The HKPCA/IPC International Printed Circuit & APEX South China Fair in Shenzhen was busy from its opening right through to Friday morning. Crowds seemed substantially "heavier" than the past few years. The transition to local staff by Western and global companies seemed nearly complete with few faces from America or Europe in evidence in the booths of Orbotech, MacDermid, Technic, Dow, DuPont, etc.
There were new exhibitors, an increase in the number of chemical suppliers and direct imaging machines, a number of product improvements, but nothing of game changing technology overtly displayed. There were reports of multiple sales of mechanical and laser drilling machines as well as other systems. Schmoll was said to have received orders for more than 20 machines. ESI was said to have sold 2 laser drilling systems. The resurrected Aquamer® dry film photo resist was exhibited by Zhuhai Dynamic Technology Optical Industry.
Discussions frequently included speculation by those with little or no knowledge on the topic as to whether there would be a trade war between the U.S. and China as a result of the U.S. elections. In one conversation we learned from a team that just returned from Europe that there are 4 companies in Poland near the German border building "quality" wet process and other systems for prices lower than in China. One ofthe most frequently discussed subjects during the show was the price increases of copper foil and laminates as well as delays in deliveries (we started reporting this as forthcoming in August).
The "team" of four plus an interpreter from Iran's Alfa Madar Sanat, a PCB fabricator in Tehran showed up again trying to buy products that they could not source elsewhere (e.g., dry film photo resist, Yamaha equipment, etc.). They claim to be making circuits for consumer products such as radios, but......
Of the approximately 550 exhibitors, 110 had company names that began with "Shenzhen" listed in the show directory's English Exhibitor Profile; e.g., Shenzhen Boardtech Co., Ltd., Shenzhen Chinarunsun Chemical Technology Co., Ltd., Shenzhen Gallon Technology Co., Ltd., Shenzhen Huajin CNC Technology Co., Ltd., Shenzhen Guanbia Automation Equiment Co., Ltd., Shenzhen JianjianPCB Equipment Co., Ltd., etc., etc., etc.
PhiChem introduced a new fluoropolymer based conformal coating to make electronic circuits and devices water resistant. Schmoll appointed WKKD as a distibutor in Greater China. Mutracx, maker of the direct imaging digital printing system (with a built in AOI) at Whelen and Philips shook hands with WKKD to become appoint it a distributor in Greater China.
112.3 million smartphones were shipped in the China market during the third quarter up more than 5% from last year’s period. This accounted for 30.9% of the world’s total according to Digitimes Research. Oppo had the largest market share of Chinese-based company shipments with a 19.9% market share. This was followed by Vivo with 15.9%, Huawei Technologies with 12.1%, Xiaomi Technology with 6.3%, GiONEE with 5.5%, LeEco with 3.8%, Meizu with 3.7%, ZTE with 2.1%, Coolpad with 1.9%, Lenovo with 1.6% and Hisense with 1.2%. Apple, Samsung Electronics, and HTC were the three largest international suppliers with 9.3%, 5.1% and 0.4% respectively.
Sales of smartphones in India will fall 17+% this quarter resulting in factory slowdowns and closures as well as layoffs. Inventory pile-ups have mobilephone companies such as Lava, Karbonn, and Intex planning 10% lay-offs while Micromax has already slowed production in two facilities.
Could this spark a U.S. domestic business boost?
Will the U.S. Department of Transportation's recommendation of mandatory vehicle-to-vehicle direct communication by short range wireless communications for all new cars and trucks to reduce accidents come to pass? If so when? Is it the right method? Should the government recommend the method of linkage? Or, should it just recommend the connections? One pundit says, "Having a wireless network is just stupid due to the security risk. It is much better to have uni-directional communication. RADAR/LIDAR and cameras can do the job without the broadcasting requirement. If this moves forward it would drive auto manufacturers nuts!"
On the other hand, it should delight the PCB and electronic packaging manufacturers by providing a host of new items to make.
SEMICON China, the largest gathering of the semiconductor supply chain in China, and FPD China will be held at the Shanghai New International Expo Centre on March 14-16, 2017.
The event will feature six forums, including a new one for automotive applications includng: Self-parking, anticipatory braking, safety, communication, navigation, and entertainment.
More news on automotive electronics from Europe
Adaptive cruise control, potentially Forward Collision Warning and Auto Emergency Braking will support a doubling in annual demand for Radar units from 2015 up to 2021.
Continental was the leading vendor of electronics for automotive Advanced Driver Assistance Systems (ADAS) in 2015, with an estimated market share of 18%, ahead of Bosch with 15%, Autoliv (14%), Magna (9%) and ZF/TRW (7%). Collectively the top ten vendors accounted for almost 90% of the ADAS market. The total addressable market for ADAS will more than double from just under $300 million/year today to nearly $700 million over the next five years. (Source BPA).
From Taiwan
In response to hikes in PCB pricing, DIY motherboard makers plan to keep prices unchanged for existing models but increase prices by about 5% for new models equipped with new Intel and AMD chipsets to be launched in January 2017.
PCB price hikes have increased costs for PC and smartphone vendors. Additionally, these vendors have faced price hikes for display panels, DRAM and hard disks arising from tight supplies. Consequently, these vendors have hiked sales prices for high-end models and plan to increase prices for all new models launched in first-quarter 2017. (Source: Digitimes)
IC substrate suppliers Kinsus Interconnect Technology and Nanya PCB both reported sales declines of 7.1% and 0.5%, respectively, for the month of November while Compeq Manufacturing’s sales reached a 12-month high of $150.9 million for the month.
Flexible printed circuit board (FPCB) makers Zhen Ding Technology and Flexium Interconnect are forecasting decline in sales for the first half of 2017 due to a decline in demand for Apple's iPhone 7. Flexium is said to be developing new FPCBs to work with OLED displays expected in the next round of iPhones in the Fall.
A solution to the factory skilled/semi-skilled labor shortage?
Numbers of Japanese elders (65+) in the workforce are soaring according to an article in the Wall Street Journal. A tight labor market prompts employers to increasingly turn to senior citizens for jobs that younger workers shun.
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Are you a supplier to the PCB and the FPC industries?
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If you are not an IPC member yet, get a 75% discount for your first year's membership - if you become a member prior to the end of IPC APEX EXPO 2017. (This is a one unprecedented time offer!)
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Are you an executive of a company that makes printed or flexible circuits?
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