Weiner International Associates
           Weiner International Associates

Please send news and comments to:  gene@weiner-intl.com

September 2018

 

What will the electronic interconnect packaging market look like in 2019? Will Mexico rise again, stronger than before with the new trade agreement?

 

The latest round of announced U.S. tariff hikes includes bare printed circuit boards and copper clad laminates. U.S. buyers of bare boards from China started to pay the new tariff this month. Customs and Border Protection (CBP) expects to increase this tariff from 10% to 25% on January 1, 2019.

Beijing has begun to collect taxes of 5% or 10% on a $60 billion list of 5,207 American goods and promised further counter measures.

 

America's original equipment manufacturers (OEMs) must now re-evaluate their manufacturing strategy, in light of recent tariff announcements and the new USMCA trade agreement. From where will they get their bare boards? Will they depend upon their EMS providers or specify sources for their supply chains?

Boards assembled in Mexico not only costs less than those made in China, but they also do not incur a tariff on components imported from China for assembly in Mexico. That coupled with increased availability of indigenous qualified managers and technically educated workers in recent years makes it worth another look for American electronics supply chains.

 

Taiwanese tech companies are said to be leaving mainland China in droves as the U.S.-China trade war threatens to disrupt supply chains, according to various Taiwan media reports.

Some Taiwanese firms have begun pouring money into domestic facilities. Delta Electronics, a global leader in the manufacture of power supply units, will invest $87.9 million in a 30,000-square-meter new factory in the Southern Taiwan Science Park. It also recently purchased a$48.8 million site to build a new R&D center near its Taipei headquarters.

Career Technology, PCB maker for the iPhone, has begun seeking land in Taiwan to build a new facility.

Bloomberg reported that Taiwan-based iPhone maker Pegatron said it would add capacity in the Czech Republic and Mexico.

 

The TPCA SHOW 2018 on Oct. 24th-26th at Taipei Nangang Exhibition Center coupled with IMPACT (International Microsystems, Packaging, Assembly and Circuits Technology Conference) should be a “beaut”!

 

That was fast!

 

I just received my first new offer of duty free bare PCBs from Taiwan! The Bare Board Group told me at the Design-2-Part show in Marlborough, MA that 75% of their boards for clients come from Taiwan.

 

Was there any doubt?

 

Canada, at the eleventh hour, agreed to join Mexico and the U.S. in a revamped trilateral trade deal. The revised agreement, formerly called NAFTA, is named the United States-Mexico-Canada Agreement, or USMCA. The two countries really need each other economically. Canada is by far the No. 1 destination for U.S. exports, and the U.S. market accounts for 75% of what Canada sells abroad.

 

Along with the new trade deal, “side letters” allowing the two nations to mostly dodge auto tariffs have been signed. These letters stipulate that Canada and Mexico can continue sending about the same number of vehicles and parts across the border free of charge, regardless of whether auto tariffs go into effect down the road. Only parts above that quota could face tariffs.

 

We invite Canada's PCB and FPC fabricators, assemblers, and other members of the automotive electronic supply chain to participate in the IPC's Executive Forum on Automotive Electronics January 28 in San Diego.

 

Did you know that the IPC’s 2,300 North American member company sites employ more than 2 million people throughout the region?

 

The IPC's Executive Forum on Automotive Electronics more than a half dozen industry experts from around the world that will address challenges and opportunities the day before Tesla's CTO provides the keynote speech of IPC APEX EXPO 2019.

 

Who said, "Relying on the global industry may no longer be sustainable," when referring to the semiconductor industry's supply chain? Most recently, Yao Lijun, founder of Konfoong Materials (KFMI) China’s largest maker of the ultra-pure metal and other key chip making materials. Before that, yours truly, after reading "The Japan That Can Say No: Why Japan Will Be First Among Equals". At that time Shintaro Ishihara, Minister of Transport, and Sony co-founder and Chairman Akio Morita claimed that the world had come to depend on Japanese technology, especially in semiconductor production.

 

Semiconductors

 

Taiwan leads the world in semiconductor foundry, package and test services and is second in chip design. SEMICON Taiwan, attended by more than 45,000, featured more than 2,000 booths and 680 exhibitors from around the world.

 

Taiwan’s Ministry of Science and Technology (MOST) is aggressively moving to pool cross-domain academic forces to help the semiconductor sector break through bottlenecks through its ongoing Semiconductor Moonshot Project, to achieve as annual semiconductor production value of $98.23 billion by 2021. 62 semiconductor firms are focusing on the development of advanced processes and SoC (system on chip) solutions in cooperation with the academic sector.

Taiwan Semiconductor Manufacturing Company (TSMC), for instance, is developing 3nm process technology in collaboration with a research team from National Taiwan University. MediaTek and National Tsing Hua University have teamed up to develop neuromorphic AI visual chips, and LandMark Optoelectronics and National Chiao Tung University have jointly initiated the development of CMOS-based auto-use optical radar, while Novatek Microelectronics has joined forces with National Cheng Kung University to develop IoT chipsets boasting low power consumption. These programs and others will have government support.

 

How will China counter? More importantly, what will the U.S. do to get ahead of the curve?

 

 

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