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November 2021

 

Dateline November 29: The Organizing Committee of the 2021 Int'l Electronics Circuit Electronics event (the December 8-10, 2021 HKPCA show) have just made the official announcement to reschedule this year's exhibition to January 5-7, 2022.    

 

The week after productronia Germany canceled all remaining trade shiows for 2021 as Covid cases spiked again across the country.

The annual JPCA Show 2021, which was scheduled to be held in June, was held in late October. There were few exhibitors and visitors at the venue because the pandemic induced business trip ban was not lifted. Only 10 attended the  Advanced Packaging Symposium of the Japan Institute of Electronics Packaging (JIEP) held at Tokyo Big Sight during the event - rather than the usual 100. Some sessions had as few as 2 attendees!  

 

Moving forward?

 

At this month's IPC Zoom meeting for executives the statement was made that the U.S. should not just be trying to play "catch-up" in reproducing elements of the supply chain needed for microelectronic packaging, but should endeavor to leapfrog them with new technologies. Actually, I believe that both are needed to sustain and restore  the current industry while developing the resources, technology, and semi-skilled and skilled labor required for both today's and tomorrow's technology. This needs government incentives and support, not penalties, to encourage the investments needed. 

 

If I were to select  areas upon which to focus, they would include: several different additive manufacturing technologies, new organic substrates for build-up circuitry, and the application of photonics in a variety of fabrication and assembly operations for both substrate and chip manufacturing - to name a few.

 

Its official

 

The last obstacles have been cleared! MKS will take over Atotech!

 

Supply chain resilience?

 

Forecasts for recovery in the electronics packaging industry continue to dim as supply chain bottlenecks, silicone manufacturing disruptions caused by power shutdowns in China, and other areas continue to worsen. Some even state that there will not be a "full recovery" until 2023.

 

As we see Tier 1 suppliers, e.g., Bosch, as well as vehicle builders themselves, directly invest in IC fabrication operations, we must remind you that late deliveries and shortages of copper clad laminates, some passive components, and other items in the electronics packaging supply chain are causing greater grief to some than than the shortages of ICs. At the same time we note increased activity and advances in a wide variety of additive fabrication processes for fine line circuitry in the "Western World".

 

How true this is!

 

From the Wall Street Journal: "What’s Harder to Find Than Microchips? The Equipment That Makes Them. The world is hungry for semiconductors, and not all of them need to be made with cutting-edge technology. The race is on to find older machines that can still crank out chips."

 

U.S. orders to Taiwan company to be made in China?

 

Compeq Manufacturing will expand its capacity for high-end HDI PCBs to meet continued strong demand by building a 2nd plant at its Chongqing, China site next year.

 

Third-quarter 2021 sales rose 42% sequentially and 4% on year reaching $629.36 million, the company's second-highest level on record. Net earnings jumped 90% for the quarter to $56.2 million. 

 

Compeq attributed the 3rd quarter revenue and profit gains mainly to its strong HDI board shipments for new handsets, notebooks, tablets and wearable devices released by its major U.S. client, and partly to fulfillment of the client’s new flexible PCB orders for handset battery and TWS (true wireless stereo) device applications.

 

The company has managed to minimize the impacts of components shortage and other negative factors through flexible capacity allocations, agile inventory management and close communications with clients.

 

Compeq expects to land new PCB orders from US clients for low-orbit satellite communication and metaverse-based wearable device applications in 2022 because of its solid PCB manufacturing technology and experience. Source: Digitimes

 

October 2021

 

The Printed Circuit Engineering Association (PCEA) has signed a letter of intent to acquire certain assets of UP Media Group Inc. The deal is said to establish the PCEA as the leading association for printed circuit engineers worldwide, with over 2.5 million engagements annually to printed circuit engineers, designers, fabricators and assemblers.

 

The acquisition includes the annual PCB West and PCB East trade shows, which attract more than 3,000 registrants annually; PRINTED CIRCUIT DESIGN & FAB (PCD&F) and CIRCUITS ASSEMBLY magazine, with a subscriber base of more than 65,000; the PCB UPdate digital newsletter; PCB Chat, the podcast series; the PCB2Day workshops; and Printed Circuit University, the dedicated online training platform.

 

Under terms of the acquisition, key UP Media Group staff will join the PCEA, including Mike Buetow, who becomes president; Frances Stewart, who becomes vice president, sales and marketing; Chelsey Drysdale, who becomes chief content officer; and Brooke Anglin, senior sales associate.   The staff joining PCEA will report to the PCEA board, led by Chairman Stephan Chavez

 

Another PCB Pioneer has passed

 

Foster Gray who moved to Austin, Texas from Dallas in 1973 to build the Austin, Texas Instruments' Printed Wiring Board shop passed early this month one day after his 90th birthday. Texas Instruments elected Foster as a Distinguished Member of the Technical Staff at Texas Instruments Inc. in 1996, culminating a career spanning 41 years with eight patents, 27 technical publications, and four published papers. Foster was an avid supporter of the IPC and participated in many of its early industry roadmap and standard development activities.  In 1996 he was inducted into the IPC’s Raymond E, Pritchard Hall of Fame – thus receiving the industry’s highest recognition.

 

September 2021

 

More M&A

 

Day 1:  Analog Devices announced that it is buying Maxim Integrated for $20 billion. The deal will create a giant analog chip design & packaging company with sales of $9 billion and a free cash flow of $3 billion. The combination will have 50,000 products and 125,000 customers around the world and allow ADI to better challenge number 1, Texas Instruments. All this is subject to regulatory approval in the U.S., China and a few other countries.

 

Additive Circuits Technologies  (ACT) acquired Bench 2 Bench Technologies, a Fullerton, CA-based high-performance manufacturer of flexible circuit boards for the medical device markets. ACT acquired Winonics, another California circuit maker in 2020.

“Our acquisition of Bench 2 Bench will industrialize the manufacturing of high-definition flexible circuits, allowing these types of products to reach targeted customers in an accelerated manner.  ACT’s technology embedded into Bench 2 Bench flexible circuit products will provide a truly differentiated product that will address the next-generation technology needs of our customers,” said David Torp, ACT’s CEO.  

 

Spartronics has acquired Inovar, a privately held company based in North Logan, Utah. Inovar, founded in 1998 is the largest independent Tier 3 electronics manufacturing service (EMS) player in the Rocky Mountain region. It is Spartronics 2nd acquisition this year. The company now operates eight manufacturing plants in the U.S. and one in Vietnam.

Spartronics is a portfolio company of One Equity Partners (OEP), which acquired Spartronics from Sparton Corporation in July 2020.  

 

Sometimes I wonder

 

What are they thinking? Even as Japanese warn against traveling to Japan during the current Covid surge (August 27) NEPCON Nagoya is promoting its October show and offering free tickets to attend!

 

Lead times for deliveries of capital equipment for electronic manufacturing continue to stretch out due to component and labor shortages as well as ongoing shipping bottlenecks. This is certain to negatively affect majior segments of fabrication and assembly suppy chains well into 2022.

 

Japan: Bouncing back

 

Japan’s PCB output increased by more than 40%. Its, growth rate exceeded 10% for 10 consecutive months, the largest increase in more than 11 years. was recorded. Among them, the output of soft board increased by 20%, which was a 6-month increase.

 

The latest statistics released by the Japan Electronics Packaging Circuits Association (JPCA) pointed out that the output of printed circuit boards (PCB; rigid board + flexible board + module substrate) in Japan in July 2021 increased by 32.2% compared with the same month last year. 

Cumulative Japanese PCB production for the January-July period of 2021 was $353.2 billion.

 

Taiwan

 

Nan Ya Printed Circuit Board has posted unaudited sales of $170 million for August 2021, down by 3.2% from the previous month, but up by 30% year-on-year. Year to date total sales reached $1.19 billion, a 37% increase over the same period last year.

 

A Chinese government restriction on power use shut down a number of Taiwan owned PCB fabrication plants located in Suzhou and Kunshan for 4 days in September. The Industrial Research Institute stated that this coukd negatively affect Taiwan's PCB revenue by 1.0%Z to 1.5% in the 3rd quarter.

 

More chip investment

 

China’s top chip maker Semiconductor Manufacturing International Corporation (SMIC) is pouring $8.87 billion into a new chip fabrication plant in Shanghai’s free-trade zone. The company states that it has other plants planned for Beijing and Shenzhen as Beijing seeks to advance the country’s semiconductor industry.

 

General Motors Chief Executive Mary Barra said that the largest U.S. automaker plans to make changes in its supply chain as it works to address the continuing semiconductor chip crisis that has forced significant production cuts.

 

"We're going to make some pretty substantial shifts in our supply chain," Barra said in an online interview. "We're already working much deeper into the tiered supply base because generally General Motors doesn't buy chips (directly) but (our suppliers do). But now we're building direct relationships with the manufacturers."

 

The GM CEO said some newer GM vehicles have up to 30% more chips than other vehicles.

 

August 2021

 

Where are we headed? Sales and profits are up. So are costs, job openings, inflation and delivery delays as well as the need for workers with the ability to read and follow instructions. Remedial training in reading comprehension and arithmetic are becoming more of a need for American companies hiring new workers. It's a sad commentary of our declining education system.

 

In the U.S. Royal Circuit Solutions has acquired South Coast Circuits.

 

Zwei reports that the DACH (Germany, Austria, and Switzerland) region's printed circuit industry grew by 19% in the first quarter of 2021 with the highest booking level since 2019 – even as material bottlenecks remain a cause for concern. PCB sales also increased 12.3% for the same period.

It is also encouraging to note that the number of employees in the region has returned to the pre-crisis level of 2019.

 

Safe renewable energy for electric vehicles is not so easy to produce! General Motors is halting production of the Chevy Bolt EV after a number of battery fires prompted a massive recall that has already cost the company nearly $2 billion. The automaker won't resume making the 2022 Bolt and Bolt EUV until at least mid-September.

 

Switzerland's Mycronic’s Assembly Solutions high volume division has signed an agreement to acquire Shenzhen Huan Cheng Xin Precision Manufacture Co., Ltd. The company which makes automated screen printers and pick & place equipment has about 120 employees. 95% of sales are in China. Screen printers account for 80% of total sales.

 

Taiwan-based Gold Circuit Electronics' (GCE) second-quarter 2021 revenues jumped 48.2% year-over-year to a record high of $227.75 million 50% of which comprised server applications. Net profits for the quarter increased 22% to a new high. Its July revenues rose 40% on year to $7.1 million.

 

The company expects sales of server boards to grow quarter by quarter in the second half of the year along with increasing shipments of servers adopting Intel’s new Whitley processor series to both datacenter operators and enterprise clients.

 

GCE is also ready to roll out in late 2021 or early 2022 sample products for servers that will adopt Intel’s next-generation Eagle Stream processors. While 100G network switches will remain the market mainstream in 2021, GCE is expected to significantly increase its shipments for 400G switches in the second half of the year, resulting in another big boost to its profitability.

 

In the interim the company expects to ramp up its sales of high-end HDI mainboards for notebooks and thick copper boards for automotive applications. GCE has newly developed IC test boards and will further upgrade its technology to manufacture PCBs with up to 52 layers.

 

Nan Ya Printed Circuit Board announced a record second quarter with sales of $448 million, up 15% from the last quarter. Nan Ya PCB expects its available production capacity for *ABF substrates to be fully utilized through 2023. 

 

According to the statistics of the Taiwan Circuit Board Association (TPCA), the copper foil industry’s revenue in July increased by 110.69% annually, and the CCL industry’s revenue in July increased by 63.53% annually, making it the top two PCB supply chain manufacturers in terms of annual growth in July. 

 

From a report of the Taiwan Printed Circuit Association

 

Rebound from a fall: Japanese manufacturers on the road to transformation:


Ranked as the world’s third-largest with a market share of 16.9%, the Japanese PCB industry keeps declining every year. Due to the high production cost in mainland Japan, Japanese PCB manufacturers continue to expand overseas capacity, mostly in Southeast Asian countries, to a 50:50 basis over the domestic capacity.

 

In 2020, the proportion of Japan's PCB products was FPC 46.4%, IC substrate 33.8%, and HDI and PCB 19.4%. After two years of decline, the Japanese PCB industry regained growth in 2020 after increasing the proportion of IC substrate output.

 

To deal with the global substrate shortage, besides expanding IC substrate capacity, Ibiden and Shinko have also reduced uncompetitive product lineups to retain advanced products with higher added value. For example, due to the stagnancy of FPC demand for smartphones and the keen external competition, FPC plant Mektron under NOK announced labor cuts of 27% in 2020.

 

Materials for making advanced PCBs are still controlled by the Japanese PCB industry. This will favor its transition toward niche products for a transformation into a small but excellent model.

 

Due to the return of COVID-19, Japan declared an emergency control in 2021H1, challenging the production momentum and pressurizing the supply chain of the PCB industry. Although the PMI in 2021H1 of 49-54 suggests an ongoing trend, further observation is required to determine if the Tokyo Olympics 2020 have affected the recovery.

 

Korean PCB manufacturers sized the substrate market with a highly independently supply chain:

 

Strategically, the Korean PCB industry also coped with the market changes by centralizing investments in products with higher added value in the last year.

 

In 2019, leading Korean PCB manufacturers such as Samsung and LG ended the HDI business with low profit and turned to the substrate market, raising the 2020 substrate output by 10% over 2019. Further observation is required to determine if over-emphasis on a single product will hinder the development of the Korean PCB industry. However, it is certain that the rises and falls of leading Korean manufacturers of terminal electronic products will affect the competitiveness of the Korean PCB industry.

 

PCB development in South Korea will focus on smartphone-related products, and the substrate will play a more important role. Benefitting from the strong export and domestic demands in 2020H1, South Korea maintained a PMI of 52-56. However, whether or not the Korean government can effectively control the second outbreak of the pandemic in July will become an important variable affecting the economic and industrial development of South Korea.

 

Oneup Business Insights of Astoria, New York announced a new study on the market for build-up films entitled "Organic Substrate Market Growth Report 2021-2027".

 

*ABF stands for Anjinomoto Build-up Film. There is a shortage of the material used in IC subtrates. The Anjinomoto material requires refrigeration fior storage and is reported to have a relativel short shelf life. There are other less known build up films and one has to wonder what they will be named, or will the ABF acronym stick as Kleenex has done for facial tissues.

 

Foxconn bought a chip plant from Taiwan chipmaker Macronix International for $90.8 million, as the electronics giant looks to make auto chips amid its foray into the electric vehicle (EV) market. Source: Reuters

 

A rising star in chip making?

 

Technavio, a market research firm, says that Vietnam’s semiconductor industry is projected to grow at nearly 19% CAGR, about $6.16 billion, between 2020 to 2024. The semiconductor sector is deemed as a stimulator for many industries and as one of the high value-added industries from a national perspective.

 

The Vietnamese government initiated the first IC development program in 2009 and set up an IC design research and education center, Saigon high-tech park lab, and two IC R&D centers with a total of $3.2 billion. The program provided microchip design training to electric engineers and incubated over 30 local technology companies. A portion of locally-made chips manufactured between 2012 to 2017 has been successfully commercialized.

 

This year Intel Products Vietnam has increased its investment there by $475 million bringing its total investment there to $1.5billion since 2006.

 

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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