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.
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.
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.
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).
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.
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.
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).
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.
Are you a supplier to the PCB and the FPC industries?
Do you provide them with with copper clad laminate, process equipment (exposure systems, etchers, AOI systems) or specialty chemicals (dry film photo resists, via fill systems, plating solutions)?
If so, then the February 13 IPC Executive Forum is for YOU, too!
Learn what challenges YOUR customers are facing and what they seek and need in products and technical services.
Learn what the automotive industry wants.
Join your customers' executives at the Executive Forum.
Get the same discount as they do for early registration.
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!)
Are you an executive of a company that makes printed or flexible circuits?
Do you plan to attend IPC APEX EXPO 2017 in February at the San Diego Convention Center?
If so you should definitely participate in the Executive Forum produced by the members of the Raymond E. Pritchard Hall of Fame designed to help you go forward in these difficult times.
An all star program composed of suppliers, fabricators, buyers, consortia leaders will provide their expertise. Others will participate in a panel discussion to provide you with ideas that they used to succeed.
A special speaker from Asia will give you the real "scoop" as to what is going on there.
Did you say that you are not an IPC member? No matter! Let me show you how to save nearly $1,000 on a first year membership.
You can take advantage of this one-time special arrangement to attend the February 13, 2017 Executive Forum at the same price as IPC members, and then take a few days to decide if you wish to take advantage of the special membership offer.
Contact me for detailed information.
Gene H. Weiner, Chairman IPC 2017 Executive Forum