Weiner International Associates Consultants- Board & Advisory Board Seats Technology: Commercial Viability Assessment Product Introduction/Marketing
           Weiner International AssociatesConsultants- Board & Advisory Board SeatsTechnology: Commercial Viability Assessment Product Introduction/Marketing

July 2021

 

At last!!!

 

Do you know about the PCBAA? If you are an American-based PCB, PCBA, or critical material/specialty chemical supplier you can learn more at https://www.pcbaa.org/contact. The newly formed Printed Circuit Board Association of America is a consortium of companies that support initiatives to advance the U.S. domestic production of microelectronics, specifically printed circuit boards assemblies and their domestic supply chains. It seeks to provide one voice for the PCB/PCBA industry. Its intent is to educate, advocate, and legislate to raise awareness with decision-makers in Congress, the White House, the Department of Defense, and the rest of the Executive Branch about the domestic capabilities and resiliency of the industry for both national security and economic purposes.

 

With this announcement and the current state of world affairs, extended supply chains, and competition we have to once again wonder if sovereignty is corporate or national. Globalists would most likely have a different answer than nationalists, especially when it comes to security.

 

Let us know what you think after contacting the PCBAA.

 

Chips - they need to connect to the outside world to work!

 

According to SEMI semiconductor manufacturers worldwide will have started construction on 19 new high-volume fabs by the end of this year and break ground on another 10 in 2022 to meet accelerating demand for chips. China and Taiwan will lead the way in the new fab construction starts with eight each, followed by the Americas with six, Europe/Mideast with three, Japan and Korea with two each.

 

Of the semiconductor makers beginning construction of new fabs this year, many won’t start installing equipment until 2023 since it takes up to two years after ground is broken to reach that phase.

 

Who will build the substrates? Where will they be built? What will the supply chains look like? How much more consolidation will take place?

 

How will new technologies be evaluated and accepted by the electronic packaging industry and its customers - especially those in the medical and military arenas? Will there be a fast track?

 

If I were investing I would look at establishing improved independent  build-up films (greater shelf life) and production facilities in North American and Europe.

 

Did you know that Penang in Malaysia accounted for 5% of the world's semiconductor exports or that there are more than 350 multinational corporations located in its free trade zone ?

 

Will the world's leading foundry invest more than the U.S. government in semiconductor development and new facilities during the next few years?

 

Following its move to set up a 5nm chips fabrication plant in Arizona and expand foundry capacity in China, TSMC recently confirmed its intentions to build fabs in Japan and Germany. 

 

Build-up Substrates

 

Taiwan's Unimicron Technology expects to keep its production capacity for ABF substrates fully utilized until 2025.

 

There is a new rush to build facilities to make ABF substrates. AT&S is reported to have plans to invest $2 billion for a major manufacturing complex in Malaysia with Intel and another unamed  U.S. partner. Production will be in 2024 ramping up to full scale production in 2026. AT&S will also invest over $235 million next year to set up new ABF substrate production lines at its hingjing, China facility.

 

Zhen Ding will invest over $535 million to establish a new plant in China to process HPC chips. Production is expected to start in 2023 to serve major chipmeakers including AMD, Nvidia, and Xilinx.

 

Zheng Ding will also build a $285 million BT substrate plant in China.

 

Korea based PCB makers Daeduck Electronics and LG Innotek have decided to enter the ABF substrate fray and are developing investment plans for this move. Source: Digitimes

 

Nan Ya Plastics expects increased growth in the sales of its copper foil and other electronic materials in the second half of 2021, while seeking further vertical integration of its supply chain. Its net profits for the first half of this year already exceeded those generated in all of 2020, according to chairman CJ Wu, who credited the positive performance to growth in sales of its electronic materials such as copper foil, copper foil substrates, fiber glass fabrics and epoxy resins.

 

Revenue generated by subsidiary Nan Ya Printed Circuit Board also added to the company’s profitability in the first half of this year> The company has been running its ABF substrate production lines at full capacity.

 

Nan Ya expects to see customer demand outpace its supply during the second half of 2021, despite the arrival of additional production lines for copper foil and other materials.. Nan Ya PCB will also see its supply lagging demand in the latter part of this year, even though new ABF substrate production lines at its Kunshan, China plant have come online.

 

In March the company initiated production of high-end copper foils at its new plant in Chiayi, southern Taiwan, and has already utilized 80% of the capacity at the plant, Wu disclosed. The new copper foil plant fulfills orders for lithium-ion batteries for use in electric vehicles (EV).

 

Nan Ya plans to expand its factory site in Huizhou, China for additional capacity of copper foil substrates and fiber glass fabrics.

 

Taiwan's IC substrate maker Kinsus Interconnect Technology saw its net profits for second-quarter 2021 shoot up 202% on year to $36.1. Gross margins increased 4.75% to 27.1%.  The large profit gainswere due to investments in IC substrates.

 

Currently, BT substrates remain the largest product line at Kinsus, contributing 50% of its revenues, compared to nearly 30% for ABF substrates, and around 20% for traditional PCB products.

 

Kinsus has many major chipmakers among its clients for BT substrates, including handset AP vendors Qualcomm and MediaTek, memory supplier Micron and networking chips makers such as Skyworks and Qorvo. It also is reported to supply BT-based SiP and AiP substrates to Apple. Meanwhile, Xilinx remains Kinsus’ largest ABF substrate client, followed by Nvidia and AlteraSource: Digitimes

 

South Korea's Simmtech will invest $120 million to set up a 72,000 square meter printed circuit substrate manufacturing plant in Penang.

 

Thailand

 

Thailand has become a major investment area for PCBs fabs outside of China. This year Jingpeng, Jingguo, Taiding and others will make a capital investment for Thai factories of more than $619 million, a record high. The plants will produce boards for in information electronics, automotive and other demands.

 

Due to the U.S.-China trade war, Guangda, Taida Electric and other "large" EMS plants, are also actively shifting production capacity from China to Southeast Asia. Quanta invested $30.4 million in its Thailand plant.

 

June 2021

 

As orders for PCBs and PCBAs surge investment in China from parts of the western world continue. American-based firms continue to provide technical seminars to its customers in the PRC where their largest business and major assets now exist.

 

One has to wonder if international domains are corporate or government.

 

Certain chips will remain in short supply through mid 2022. There is evidence of some double ordering leading one to wonder if he surge in new or expanded facilities may be overkill.

 

The U.S. Senate has approved a $50 billion investment for ICs - but seems to have ignored the supporting infrastructure needed to build advanced substrates.

 

The IPC and iNEMI signed a Memorandum of Understanding (MOU), strengthening collaboration focused on the future of electronics manufacturing.

 

Hitachi High-Tech Corporation (President and CEO: Takashi Iizumi) and  Hitachi High-Tech America, Inc. (President: Craig Kerkove ), announced the establishment of Hitachi Center of Excellence in Portland, a new centralized facility for semiconductor engineering in Hillsboro, Oregon. 

 

TSMC says has begun construction at its Arizona chip factory site.

 

AT&S’ new campus in Kulim Hi-Tech Park, Kedah, to produce high-end PCBs and IC substrates involves a proposed total investment of >$2 billion and will create 5,000 high-tech and high impact jobs. The construction of the facility is scheduled to begin in the second half of 2021 with commercial operations targeted to come on stream in 2024. 

May 2021

 

China's PCB makers see severe impact of sharp material price rises

 

Ever-rising prices for raw materials are heaping great pressure on business operations of China-based PCB makers.

 

Prices for copper foil, accounting for one of the the largest proportions of PCB production costs, have been rising significantly with a rapid surge in battery demand for consumer and automotive applications.

 

Even leading Chinese PCB vendors Shennan Circuits and Wus Printed Circuit are feeling the pinch of sharp material cost increases, and they can only strengthen production management, upgrade technology and communicate more with clients to tide over the crisis, sources noted.

 

Smaller makers are bearing the brunt of the impact as they mainly produce lower-end PCBs for consumer applications with low gross margins. It is difficult for these to pass the entire cost increases onto downstream clients.

 

Many are now reluctant to take orders from clients, as the upward price adjustments for orders are always outpaced by those for raw materials and therefore the more orders they take, the more losses they may suffer as they are also in a disadvantageous position in vying for more supply of raw materials. As a result they face ever-higher material prices.

 

It remains to be seen whether the ongoing production cost increases will usher in a new wave of resources consolidation in the China PCB industry. Source: Digitimes (Taiwan)

 

April 2021

 

This month's shipments for the PCB industry in Taiwan totaled nearly $2.1 billion, a 0.38% increase from March, and a 10.3% increase from the same month of 2020 according to the TPCA.

 

NYC's loss, NC's gain

 

Apple plans to invest more than $430 billion in the United States and add 20,000 new jobs nationwide over the next five years. $1+ billion will go into North Carolina for a new campus and engineering hub in the Research Triangle area which will create 3,000 new jobs. 

No surprise here

 

Foxconn is drastically scaling back a planned $10 billion factory in Wisconsin, confirming its retreat from a project that former U.S. President once called "the eighth wonder of the world." Under a deal with the state of Wisconsin announced on Tuesday, Foxconn will reduce its planned investment to $672 million from $10 billion and cut the number of new jobs to 1,454 from 13,000.

 

March 2021

 

A fire at a Renesas chip plant in Japan damaged 17 machines. The company said that replacing the damaged machines could take several months. This will add to the global shortage of chips that is disrupting production of cars and electronic devices. Renesas accounts for 30% of the global market for microcontroller units used in cars and 2/3s of the chips made at this plant were for the auto industry.

 

China is gaining ground in the Industry 4.0 revolution as its advanced manufacturing now outpaces that in the EU, the U.S., and Japan. The Fourth Industrial Revolution, also known as Industry 4.0, is the automation of manufacturing and the upgrading of industrial practices, using modern smart technology. Of the 69 factories around the world now viewed as leaders using Fourth Industrial Revolution technologies, China is now home to 20, followed by 19 in the European Union, 7 in the U.S. and 5 in Japan.

 

The World Economic Forum has added five Chinese sites to its Global Lighthouse Network list of the world’s most advanced factories that have successfully adopted new technologies to transform business models and value chains.

 

Bosch Automotive Products in Suzhou, Foxconn Technology Group’s Chengdu campus, electrical appliance manufacturer Midea Shunde in Guangdong province, and Wistron InfoComm Manufacturing in Kunshan are among 15 sites added to the list after an assessment of over 1,000 companies globally from a range of diverse industries ranging from electronics to pharmaceuticals and automotive.

 

Honda Motor said at mid-month supply chain issues forced a halt to production at a majority of U.S. and Canadian auto plants for a week due to the impact from COVID-19, congestion at various ports, the microchip shortage and severe winter weather.

 

February 2021

 

How China views the importance of gaining capabilities in advanced chip technology and production may be inferred by the fact that the government is keeping SEMICON China live at the Shanghai New International Expo Centre March 17-19, 2021 while the CPCA Show scheduled March 15-17 has been posponed. Travelers to SEMICON, even from Hong Kong, have to arrive 14 days early in order to meet quarantine requirements before attendng the event. There are some complaints by foreigners already in Shanghai as to the poor quality of the quarantine hotels (and meals provided) chosen for them by the government. See the following announcement.

 

"Due to the current epidemic situation and the epidemic prevention and control measures introduced by various governments,and according to the requirement of "Exhibition activities should be held cautiously in winter and spring, Spring Festival and other key holidays" based on "the technical guide for epidemic prevention and control of Shanghai exhibition activities" issued by Shanghai municipal government, to fully protect the health and safety of exhibitors, visitors and participants, the 2021 International Electronic Circuits  (Shanghai) Exhibition, originally scheduled to be held at the National Exhibition and Convention Center (Shanghai) from March 15 to 17, 2021, will be postponed to July 7 to 9, 2021 after communication and consultation with relevant departments of Shanghai municipal government and Shanghai National Exhibition and Convention Center. The original venue of the exhibition and the original booth of the exhibitors remain unchanged."

 

Reshoring?

 

Motorola Solutions announced the opening of its new, Video Security & Analytics (VS&A) manufacturing facility in Richardson, Texas. The 136,000 square foot building represents the company’s continued investment in North American manufacturing and the expansion of its production and shipping capabilities to further the growth of its video security portfolio which serves customers around the world.

 

Note: Motorola was one of the first to move assembly (of its mobile phones with buried capacitor PCBs) off-shore to China some decades ago.

 

Samsung Electronics on the move ?

 

Samsung Electronics is considering investing up to $17 billion to build another chip-making factory in the U.S. It already has one in Texas. Samsung’s new facility would employ up to 1,900 with operations to be initiated by October 2022.

 

An important factor in whether Samsung moves forward with the expansion will be the availability of U.S. federal government incentives to offset those offered by foreign countries and cheaper costs in other parts of the world, according to the Wall Street Journal (WSJ). 

 

The plans were proposed as the U.S. weighs allocating billions of dollars in funding to grow U.S. chip manufacturing and reduce its reliance on Taiwan, China and South Korea. New chip-making incentives were included in the National Defense Authorization Act passed in January, although the measures have yet to receive funding.

 

The U.S. has historically not offered federal aid for chip plants. But the coronavirus pandemic highlighted how disruptions in the global supply chain could interrupt the flow of key ingredients needed to make vital technologies ranging from 5G smartphones to jet fighters, and sparked U.S. interest in becoming more self-sufficient according to the WSJ.

 

The U.S. share of global chip manufacturing has fallen to around 12%, according to a Boston Consulting Group report last year. It said significant new financial help would be needed for the country to reverse the trend.

 

Huawei told suppliers it will order fewer smartphone components this year amid crippling U.S. sanctions. Estimated reductions of its cell phone output range as high as 50% for 2021.

 

Chip shortages fuel boost in semiconductor equipment orders to new record

 

North America-based manufacturers of semiconductor equipment posted a historic  monthly high $3.04 billion in billings worldwide in January 2021 (three-month average basis). This is the first time monthly billings have reached $3 billion, according to the January Equipment Market Data Subscription (EMDS) Billings Report published today by SEMI. The billings figure is 13.4% higher than the final December 2020 billings of $2.68 billion and is 29.9% higher than the January 2020 billings level of $2.34 billion.

 

Ajit Manocha, SEMI president and CEO said, “The acceleration of digital transformation is fueling strong, durable demand for semiconductor equipment.”

 

Conquering capacity constraints 

 

Taiwan's TSMC, the world's biggest foundry, plans to raise about $9 billion through bond sales to expand production and take increased steps for pollution control. TSMC also approved the establishment of a wholly owned subsidiary in Japan to expand research on materials for three-dimensional chip

 

The company is running full tilt to meet demand that exceeds its production capacity. TSMC finds itself at the center of an increasingly geopolitical scramble to secure supplies of chips for everything from automobiles to smartphones.  Prices for phone parts such as chips and displays have jumped as much as 15% in the past two quarters.

 

Chip shortages are likely to erase $61 billion of expected sales for automakers, while the impact to the electronics industry could be far larger, according to Bloomberg.

 

In 2021, TSMC expects to invest between $25 billion and $28 billion in capital expenditures, this year compared with $17.2 billion last year This includes construction of its new megafab facilities on the 1,100 acres in Arizona it purchased last year. Rival foundry United Microelectronics (UMC) has increased its capex budget for 2021 to $1.5 billion from $1 billion in 2020. 

 

Both TSMC and UMC with fully loaded capacities are relegated to reallocating production to meet demand from global automakers like Volkswagen and Toyota, just to name a few. The carmakers are forced to take a rear position in the line behind bigger chip buyers such as Apple and Qualcomm.

 

According to the Nikkei Huawei told its component suppliers that it will reduce its smartphone production by about 50% due to shiortages caused by crippling U.S. sanctions in the "Tech War".

 

The U.S. Partnership for Assured Electronics is inviting electronics manufacturers and related companies to participate in its programs, highlighting the opportunities to collaborate with industry peers and the U.S. government. The USPAE was established in 2020 with a mission of ensuring the U.S. government has access to resilient and trusted electronics supply chains. The USG has many electronics needs, especially for defense- and security-related missions, and the USPAE is lining up funding and collaboration opportunities to address those needs. 

 

Taiwan update

 

Taiwan managed the pandemic better than any other country – 924 total cases and 9 deaths.  Its PCB industry reported record revenues for 2020.   The pandemic provided a boost for electronics from the “Work from Home” employees who drove sales for Notebooks, Laptops, Desktop Computers, Monitors and any hardware related to an internet connection. Board makers in Taiwan have been busy the second half of 2020.

 

The monthly production for rigid circuit boards set a new record in September, and that volume continued throughout the 4th quarter 2020.  Revenue in 2020 reached $17.15 billion, a 4.9% grow from the previous year. Flexible circuits recorded negative growth during the first three quarters due to the delayed release of Apple’s new iPhone 12.  A huge rally from Apple and other manufacturers pushed December’s revenue up 59.2% over the same month in 2019.  This incredible growth increased the total revenue for flexible circuits in 2020 to $6.68 billion, a 7.5% increase year over year.

 

Total revenue for all segments within the Taiwanese PCB industry reached $223.83 billion  in 2020, a 5.6% increase over 2019r.

Historically, electronics production during the first two months in Taiwan slows down because of the Chinese New Year. However, this year, demand remained strong into February.    Source: DKN Research

 

Reports from Europe show an unexpectedly strong bare board demand to start 2021. This appears to be driving possible overbooking amid fears of further supply chain disruptions from China board makers. This is coupled with Cu-clad laminate shortages and price increases with lead times ioncreasing from 3 weeks to 7 weeks in some cases. This is compounded by the expected February 11 Chinese New Year shutdown as Germany and others remain in a Covid-19 extended lockdown. Add to that rumored shipping container shortages. Some companies were said to be placing orders for their board needs through December 2021!  

 

It's not just the pandemic

 

Component demand for 5G and other high-tech electronics is booming! It takes time, technology, and $$$$$$ to build a new foundry or increase chip capacity!

 

Imagine ceasing production of a $60,000 vehicle for want of a $2 chipl

 

General Motors became the latest automaker hit by the global shortage of semiconductor chips. Production ceased entirely during the week of February 8 at plants in Fairfax, Kansas; Ingersoll, Ontario; and San Luis Potosi, Mexico. It also ran its Bupyeong 2 plant in South Korea at half capacity that week.  

 

The chip shortage has led several other automakers, including Volkswagen, Ford, Subaru, Toyota, Nissan, and Stellantis NV, to cut vehicle production. Mazda is considering cutting its global output by a total of 34,000 vehicles this month and in March due to the shortage. AutoForecast Solutions estimated the total lost  production this year could be 964,000 vehicles. Source: Reuters

 

January 2021

 

Although the world appears to be deeply mired in turmoil die to spikes in and mutations of the Codivd-19 virus causing increased lockdowns from Germany through portions of the U.S. to Hong Kong the electronics manufacturing industries continue to perk along. 5G component demand has caused shortages affecting modules destined for automotive factories in Europe causing some line shutdowns.

 

The effect of the stream of new Executive Orders by President Biden on America's electronics makers is not yet predictable.

 

 

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