Monthly Archives: September 2014

Red Makes Green

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The arrival of India’s Mars Orbiter is an achievement on many levels. Much will be made of the fact that it is the first Asian satellite to reach the red planet’s orbit. That they accomplished it on their first try will open some eyes to India’s hardware capability as well, given than the success rate for the rest of the world is just 40%.

What I’d like to focus on is the price: India spent a reported $74 million on the Mars Orbiter Mission. That’s barely 10% of what NASA spent on the Maven mission.

Coincidentally, the F-22 Raptor saw action for the first time this week. But the fighter has been under fire for years for what critics call a bloated price tag and unmet performance objectives. The DoD has spent $67 billion for 188 planes, and no more will be produced.

Wall Street Journal

Should the US government wake up and realize that a huge price tag does not necessarily translate into performance, what will be the impact on the electronics supply chain, especially in the US where so much of it relies on military spending?

The End of the Viasystems Era

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At long last, the hunter became the hunted.

TTM Technologies today announced its pending acquisition of Viasystems. The deal, expected to close in early 2015, will vault TTM to second place among the world’s largest PCB fabricators.

No matter how the deal turns out for TTM, Viasystems will remain one of the most talked about PCB companies in the industry’s history, held in awe for its audacity and blamed on multiple continents for nearly single-handedly devastating local supply chains.

For the entirety of its 18 years, Viasystems was worth 10 times its revenue in industry controversy and chatter. It sprung on the scene in fall 1996, the brainchild of New York investment firm Hicks, Muse, which in quick order bought up AT&T’s board shop in Virginia, Circo Craft, Kalex, Forward Group, ISL, Mommers and Zinocelere, plus several EMS and peripheral businesses. They were the Yankees of the PCB world, albeit without the same level of success.

Then came the Tech Recession of 2001, and Viasystems’ debt ballooned to over $1 billion. Two Chapter 11 restructurings and countless lawsuits later, the company stabilized and managed to spend the better part of the rest of the decade simply managing the business.

In 2010 the veil was lifted. Viasystems resumed its buying ways, snatching up Merix and then, two years later acquiring DDi (which in turn had gobbled up Coretec). Yet consolidation didn’t bring happiness. Over the years Viasystems found it nearly impossible to turn a consistent profit. Debt, a persistent problem dating to its Hicks, Muse days, now sits at $561 million.

TTM is getting Viasystems for $16.46 per share, or about 6.8 times adjusted EBITDA. You tell me if that’s worth it.

I would expect TTM will sell off Viasystems’ wire harness business, which is small ($174.6 million in 2013) relative to the rest of the business and has shown operating losses in five of the past seven quarters. Viasystems has already consolidated its China manufacturing base, so I would not expect much change there. TTM is running at 75% capacity in China but only 60% in North America. TTM has seven sites in North America and Viasystems has nine, including a combined three in the Silicon Valley and two in Orange County. Perhaps they will seek to consolidate here in order to boost rates.

Viasystems changed the way the world viewed the industry. It forced Wall Street to take notice. It laid waste to the regional landscape, ultimately closing millions of sq. ft. of some of the once-best shops in the world. Some will say this was inevitable. Viasystems bought plants that were obsolete or quickly headed that way, whose workforces could not change even while the technology was quickly shifting away from them. And the firm tied up enormous amounts of capital in dubious debt deals that may have enriched a few but certainly did not leave their business units with the balance sheets necessary to operate in such a cyclical market.

There’s still time for the deal to fall through, and it took about 18 seconds before shareholder lawsuits began piling up. No matter what happens on the ground, come next spring, Viasystems will again occupy the rarest air of the PCB world. It just won’t be as Viasystems.

QFN? QFP? QFWHAT?

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The QFN (quad flat pack, no leads) has become my favorite integrated circuit package. It’s very compact, yet is easier to use than a µBGA.

µBGAs of 0.5mm and smaller pitch become a bit more difficult and costly with more than two rows of pins. At those geometries, escape routing can involve plugged and plated vias, which add complexity and cost to the fabricated board. QFNs can be almost as small, but have all of the pins exposed around the edges, so there’s no need for escape routing.

One thing that’s important to note is that despite sharing the first two letters (Q and F), QFP and QFN footprints are not interchangeable. We do, from time to time, see boards laid out for one along with the other form packaged part.

Take a look at this PCB layout clip from the Arduino Leonardo. It has both footprints on the board. You can see how much bigger the QFP package is.

They put down both footprints because the Atmega32U4 chip used in the Leonardo sometimes has supply issues in one package or the other. This gives them the flexibility to use either without making changes on the board.

You might consider this as an option if there’s space for a QFP and you are concerned about the availability of one package variant or the other. If you do, there are some very important things to check out:

  • Make sure the pin-outs match. Some parts vary the pin-out a bit between packages or have extra pins on one or the other.
  • Make sure the extra space won’t cause noise problems. Generally, bypass caps should be as close as possible to the supply pins. This amount of extra space probably won’t be a problem when using a QFN, but in some designs it might.
  • Make sure the board won’t be in an environment where unsoldered pads will be a problem. Some harsh environments could attack the unsoldered pads. If that’s the case, consider conformal coat.

Duane Benson
We’re always being pushed and shoved by people trying to beat the clock
But we like it – it’s what we do

http://blog.screamingcircuits.com/

Who Needs 2 Newspapers?

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Juxtapositions can funny, even when the subject is serious.

From DigiTimes today:

Foxconn considering lawsuit over leukemia report

“Foxconn Electronics (Hon Hai Precision Industry) is considering taking legal action against UK-based Daily Mail for its recent report claiming Foxconn employees working in Shenzhen plants have developed leukemia.”

Foxconn promises assistance for ill workers in response to leukemia report

“Foxconn Electronics’ (Hon Hai Precision Industry) plants in Shenzhen, China reportedly have seen many of their workers develop leukemia because of long-term operations in the presence of electronic cleaners.”

 

 

Wave of Innovation

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Old friend Jeff Miller (some readers may remember him from his ACT and Wise days)

3D printed car

took this photo of a 3D printed car this week while at IMTS in Chicago.

Meanwhile, while at PCB West earlier this week, we saw the row of Tesla demo cars on display and waiting for test drives in San Jose. A designer from Telsa’s Palo Alto R&D center (the former HP semiconductor plant) was at the show and was visibly excited talking about the range of electronics he gets to work on.

No one will confuse Tesla’s elegance with the admittedly rough model at the right, but there are some amazing things happening with both board technology and form factors right now, and we are lucky to get a front row seat for this latest wave of innovation.

Hitachi’s SMT Exit

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And then there were … 27?

Hitachi’s board today announced plans to exit the SMT component placement business, selling off certain parts of the division and closing the rest. In a press release, the firm said it would transfer the sales organization to Yamaha and cease its development and manufacturing activities.

Japan has always been the major provider of the world’s component mounters, headed such major conglomerates as Fuji, Yamaha, Juki, Sony and Panasonic. And while Hitachi’s competitors will welcome one fewer player in the market, this in all likelihood won’t shake up the industry.

Over the years it’s been widely assumed consolidation was inevitable, yet it’s taken more than a decade since the Great Tech Recession of 2001-03 for any major moves to be made.

There have been several transactions and reshufflings, of course: ASM bought Siplace (Siemens), Universal was acquired by a private equity group, as was Assembleon. Mydata was acquired by a fellow Swedish OEM. And earlier this week Dima, a small European player, was snatched up by Nordson. None of these deals has truly changed the shape of the market.

In fact, the June 2013 merger of Juki and Sony was the first major deal in which a serious player ceased to exist. Hitachi’s will be the second.

The 27 (at least) remaining players will welcome the chance to grab Hitachi’s roughly $68 million in equipment sales now in play as result of this decision. Someone’s bottom line will look at least marginally better in the coming year. But more moves will be needed before the SMT market can truly regain the types of margins needed to inspire significant commitments to innovation that were standard fare in the 1990s.

 

 

 

Calculating Optimal Solder Paste Printing Aperture Parameters

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Folks,

A while ago, I developed an Excel-based spreadsheet, StencilCoach, that calculates optimal stencil aperture parameters for several common SMT solder paste printing applications. These applications include standard apertures, passive apertures, pin-in-paste (PiP) apertures, and preforms with pin-in-paste (PiP+) apertures. These algorithms are now online at http://software.indium.com/. Over the next several posts, I will review the use of this software tool.

Let’s first look at standard apertures. After logging into to the website, click on “Stencil Coach” and then “Standard Apertures.” The page gives the definitions for “Aspect Ratio” for a rectangular aperture and “Area Ratio” for circular and square apertures. The aspect ratio, which is defined as the width of the rectangular aperture divided by the stencil thickness, should be greater than 1.5. Whereas the area ratio, for circular or square apertures, is given as the area of the opening divided by the area of the sidewalls. This formula simplifies to D/4t, where D is the diameter of a circular aperture or the width of the square aperture. The area ratio should be greater than 0.66. These recommendations are not standards, but are good rules of thumb.

Let’s consider a situation where a PWB has rectangular apertures with a pitch of 35 mils and circular and square apertures with pitches of 40 mils each. The stencil thickness is 6 mils. See if you can develop the pad and aperture sizes and reproduce the figure below. Hopefully this tool will help you design your stencils.

Cheers,

Dr. Ron

PS: If you need a hand, feel free to contact me at rlasky@ indium com.

End of Summer — End of an Era?

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Which is the way forward? New or renew?

Nepcon in Shenzhen Aug. 26-28 was “OK” in terms of attendance. Lots of prospects/”tire kickers” but very few buyers.

Japan’s high-tech PWB volume in June increased  8.6% over that of June 2013, but revenue declined 4.1% for domestic build-up types of multilayers — a typical sign of declining business, a maturing industry, cheaper foreign sources, and overcapacity. According to DKN Research, prices for these types of circuits used in cellular phones dropped 12% in Japan during the past year.

Japan manufacturers are also engaged in a price war with Taiwanese and Chinese competitors with double-sided and multilayer flexible circuits. Selling prices on these dropped more than 33% in the past year. Overall, the forecast for the Japanese circuit industry for 2014 is not better than 2013’s, which was the worst since 2008.

The world’s top 100 printed circuit makers account for approximately 80% of global demand.

Nothing is forever. The interconnect industry (PCB and PCBA) has had a good run and matured. It has progressed technically, shifted geographically, consolidated, thrived and suffered due to geopolitical shifts as well as technical advances. Some well-known domestic companies are undergoing inversions. Others are shrinking or struggling to regain a profitable (albeit smaller) status after squeezing suppliers, inventories and eliminating much of the R&D funding for future improvements. Renewing appears to be more difficult as competition for “more of the same” continues to increase and value differentiation declines. In fact, some of the cost reduction activities have actually removed value from many of the offerings making them less attractive in the long run.

Change is inevitable! We can contribute to it or be the “victims” of it. We can invest in the future or have no future. We believe that today’s survivors that are experiencing declining options for their current offerings must seek out new directions, new alliances, new wares, new  cooperative development activities and support for the future.

Opportunities do exist! 3D packaging has stalled due to both economic and technology issues. Mitsubishi Heavy Industry has started a new room temperature wafer bonding service for MEMs and biosensors for firms designing 3D packages and are unable to make them themselves. 2.5D appears to not be faring much better. New improvements in packaging appear to be filling some of the current needs and gaps. We can extend product life cycles with product/process improvements while developing new disruptive or not-in-kind technologies.

New flexible substrates with 14 micron thin cores and 9 micron Cu surfaces provide the reality of 25 micron line and space volume production and, along with new technologies, the opportunity of PCB and IC substrate makers, and their supply chains to work more closely with the packaging industry.

Future success will require a total reassessment of your company’s core values, mission statement and goals. It takes a new strategy and action plan. It will require you to question your managements’ styles. Procedures will have to be reviewed, too. Why were these established? Are they still needed? Should they be modified to meet today’s Lean manufacturing needs and technology requirements? Do they support speed to market? Should you change or create new areas of focus? Do all your managers feel the urgency?

What are you doing to ensure your future?

New cooperative activity. The newly established liaison between the IPC and the International Electrotechnical Commission’s (IEC’s) Standardization Management Board (SMB) should be a boon for the rapidly growing printed electronics industry. All concerned parties have something to contribute and something to gain from this collaboration to create international standards. One must, however, keep an open mind for new potentially disruptive technologies that could potentially bridge some applications of the areas encompassed by printed electronics, printed circuits, and other packages.

It’s time to get serious. The Taiwan Printed Circuit Association (TPCA) has asked for government support to help Taiwan’s PCB industry develop next-generation products to counter slowing growth rates. The nation’s industry (including output from its factories in Mainland China) will generate sales of $18.3+ billion this year. The TPCA is likely to receive a good audience from the government as the nation’s vice president has been a keynote speaker at the annual TPCA show’s opening ceremony the past few years.

Shortly after announcing a new $30 million share repurchase program this month Plexus held an opening ceremony for its $40 million 265,000 sq. ft. manufacturing facility in Guadalajara, Mexico. The company has stated that it is now actively recruiting to fill employment opportunities. Full employment at this facility is expected to exceed 700 workers.

The increasing costs in China and elsewhere, the stability and availability of a skilled and semi-skilled work force, locally established supply chains, and the proximity of five universities are all sure to have contributed to the decision.

SEMI announced another positive book-to-bill IC equipment order ratio for the month of July. Where will the equipment go? What types of chips with what nodes will it build? What industries will consume the added production? When will the PCB/packaging industries partake in the results?

Who is building the packaging substrates and where are they built? Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, yesterday said its revenue hit a record high $2.16 billion last month up 7.6% from June and 24.6% higher than a year earlier. The company also forecast a sequential revenue increase next quarter because of its strength in 28nm and 20nm process technologies as well as strong demand for flat panel IC drivers and tablet power management chips.

United Microelectronics Corp. (UMC), Taiwan’s second-largest contract chipmaker, posted its lowest revenue in three months last month, down 7% to $380 million due to lower contribution from its solar business.

Conversations with several major circuit interconnect and packaging supply chain members in Singapore, Hong Kong, China and Japan indicate that business is “spotty” at best. KCE in Thailand is having record sales participating in circuits for the automotive after market, now the 2nd biggest in Asia. Unimicron Technology’s second quarter net profits were up 377% from the previous quarter to $9 million. Gold Circuit Electronics and M-Flex are still working to restore profitability. Viasystems lost money the second quarter of the year. The second half of 2014 looks promising for Taiwan-based circuit makers. Global Innovation has restored its Lone Star name with a statement that it will only provide domestically produced circuit boards.

SEMI has forecast double-digit growth for equipment makers for the next two years. What will the applications be? Will Intel’s new 14nm node be part of the surge, or will the cost/benefit ratio not be good enough? How much of an effect will “wearable electronics” have?Which substrate/board builders will benefit? When? Where?

Samsung’s smartphone market position in China has been supplanted by Xiaomi  and in India by “home-grown” Micromax in the 2nd quarter of 2014. The latter is offering a 6-inch screen with magnetic flip cover, 1.3 GHz dual-core Media Tek processor, and an Android 4.2.2 Jelly Bean operating system with a 5-megapixel camera and a 6-month movie subscription for $140 (8,500 rupees)!

How is your crystal ball? Are you monitoring and re-evaluating your attainable markets and shares? Are you redefining your businesses? have you found creative ways of extending product life cycles? Are you noting major shifts in supply chains and aligning your companies with the king (or prince) makers of the next few years? Are you redefining your markets and stepping “outside” the traditional boxes? If not, I suggest (re)reading Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne (2005, Harvard Business School Publishing, 2005).

As a supporting organization of the China Sourcing Fair Fall 2014, Electronics & Components, to be held on October 11-14, 2014 at AsiaWorld-Expo, at the Hong Kong Airport, the HKPCA is offering its members VIP Buyers’* privileges to this Fair.  These include:
– Free admission to the fair;
– Free transportation arrangements to the fairs;
– Coupons for F&B & shopping discounts at the Hong Kong International Airport area and AsiaWorld-Expo;
Exclusive use of onsite office suites to its invited VIP buyers (Wifi connection, office equipment, etc);
– A free Octopus Cash Card with HK$150 stored-value for transportation or purchases.