Author Archives: Mike

About Mike

Mike Buetow is president of the Printed Circuit Engineering Association (pcea.net). He previously was editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He spent 21 years as vice president and editorial director of UP Media Group, for which he oversaw all editorial and production aspects. He has more than 30 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow

What’s In a Brand? In EMS, Apparently Everything

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The evolution of the EMS company as a “brand” is nearly complete.

Since a group of industry folks (including our columnist Sue Mucha) came up with the term at an industry meeting more than 25 years ago, the once common jargon of “board stuffers” has been vacated. In its place, the industry substituted CEM (contract electronics manufacturer) or EMS (electronics manufacturing services). Contract assembler, while still commonplace in conversation, is less preferred in writing, especially on corporate websites.

Now, the self-branding of EMS companies has taken over. No longer content with being grouped as an industry, EMS firms are taking matters into their own hands, outsourcing (get it?) their marketing to high-profile branding firms and adding a heavy dose of pizzazz along the way.

One well-known makeover is the company formerly known as Flextronics. Its style experts gave a haircut to its name (“Flex”), and added a sleek tagline: From Sketch to Scale.

Not to be outdone, Jabil is “A Trusted Product Solutions Partner+.” I’m not sure what the “+” means, exactly, but maybe it has something to do with Jabil’s alternate slogan: “Empowering Brands / Empowering the World.” That sounds exhausting.

Asia is getting in on the act. Wistron will serve you “Cradle to Cradle.” (That refers to the lifespan of electronics, but if my kids’ habits are any indicator, it could extend much further.)

Compal‘s catchphrase leans toward the esoteric: “From Vision to Reality.” If that’s too vague, the rest of it (“Innovation Empowered”) won’t help.

Taking its cue from the intelligent factory, Sanmina is now Sanmina 4.0. Plexus is “The Product Realization Company.”

Tier 2 companies are also jumping on the bandwagon. Neways is now “Your EMS Lifecycle Partner.”

Of course, not every firm has caught the branding wave. For instance, AsteelFlash is Electronics Manufacturing  Services, Mastered,” while NeoTech is taking a more traditional approach with its slogan, “Providing Electronics Manufacturing Services That Deliver Value.” Someone better clue them in, stat.

 

 

Top 5 Ways to Mitigate Component Availability Problems

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Most of the electronics design world is by now aware that we’re in a very serious period of components shortages. Hardest hit seem to be ceramic capacitors, but other passives as well as a variety of connectors and silicon parts are also caught up in the shortage storm. Allocation and shortages hit every few years, but this one seems to be the worst in recent memory. It could be a problem until 2020, and the supply chain and world of components manufacturers will likely be a different animal coming out of it.

So, you might ask, isn’t that just a problem for high volume producers? No, I would answer. It affects anyone regardless of volume. The exact way that it hits you and what you can do about it may differ, but it has or soon will hit all of us.

Here’s five things you can do to minimize the effects. I’m going to go backwards and starting with the most important thing for people who need low volumes manufactured:

1. Check the availability of all of your parts immediately before sending us your bill of materials.

The. very. last. thing. before sending us your BoM. It’s not uncommon for a part to be in stock one day and out the next. We’ve even seen cases where the part’s in stock in the morning and out by the afternoon. If you’re having us quote and order your parts, verify they are in stock as the last thing you do before sending your files to us.

Almost every BoM we see these days has one or more parts that are out of stock. We send you an email about the parts being out of stock. We can’t do anything else until we hear back from you. We can’t build without parts and we don’t know your design like you do, so we can’t guess at substitutions. A last-minute check can save days of delay.

2. Put one or two alternate part numbers in your BoM, especially for passives.

As I said above, we don’t know your project so we can’t pick a sub for you. Give us some alternates. Put them on the same line as the original part, to the right. And be sure to tell us in the special instructions that you’ve put alternates in the BoM.

 

 

 

 

 

 

 

 

3. Consider your parts values carefully. You may be able to pick something with better availability.

The 0.01?F capacitor is the hardest hit component. It’s the most commonly used bypass capacitor. Some designs need exactly that value, but many don’t. It may be easier to find a 0.022?F, a 0.0047?F, or something else close enough. If that’s the case, choose a close enough value that has better supply, or put one in as an alternate.

4. You might need a slight redesign to use a smaller package.

Since smaller packages can be used in more applications, many suppliers will be allocating more of their foundry capacity to smaller form factors like 0402 and 0201 sizes. Some component manufacturers have said they’ll be permanently discontinuing anything bigger than 0402 parts except when absolutely necessary.

Stick with 0402 size passives. It may be easier to find the parts you need in that package, and those size parts will be the first ones to come back in stock.

5. If we send you a message about a part we can’t find, respond as quickly as possible.

We do our best to avoid any delays in this process, but we can only do so much. Help us out by getting back to us as soon as possible, and don’t be afraid to give us more than one part number to try.

This can be a pretty annoying problem and it can cause delays and other problems. The good news is we’re having this problem because the design world is booming and technology is advancing. It will get better, and following these five tips can help prevent delays. Don’t forget to check your parts for availability right before sending your BoM in to us. I mean it!

Duane Benson
Parts, parts everywhere, but not an 0805 to solder

‘Fake Parts’ Data as Perplexing as the Issue

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Interesting report on counterfeit component trends, prepared by ERAI.  PLICs and microprocessors are the most commonly reported counterfeited parts.

One big takeaway: “Suspect/counterfeit parts that have not been previously reported are constantly entering the electronic supply chain and the threat of encountering one of these parts remains very high.”

All that said, the number of fake parts reported is minuscule — just 774 were reported to ERAI. As epidemiologists know, the best way to reduce risk and occurrence of negative outcomes is through research and communication.

Nothing Doing on NAFTA

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For all the chatter (rancor?) over various deals with Iran and China, left almost completely unnoticed is that the soft deadline to present any changes to NAFTA has come and gone with nothing to show for it.

US legislators had set a May 17 target to allow Congress the time needed to OK a new deal this year. That date wasn’t picked out of thin air. The US Constitution bestows Congress with the power to regulate commerce with foreign nations (the so-called Commerce Clause). As such, President Trump can’t circumvent Congress and sign a deal himself. Instead, he must give Congress 90 days’ notice before he signs any agreements.

Then, thanks to the Bipartisan Congressional Trade Priorities and
Accountability Act of 2015, the US International Trade Commission must submit two reports to the House Committee on Ways and Means and the Senate Committee on Finance on the economic impact of the pending agreements. Once those reports have been digested, Congress will be facing a countdown to the January swearing-in of new legislators, at which point all bets are off.

Compounding the situation, Mexico’s presidential election takes place July 1, and the leading candidate is expected to replace Mexico’s negotiating team when he takes office in December.

While President Trump campaigned on rewriting NAFTA, the rush to tender a new agreement has stalled as priorities have shifted. Of late, the three sides spent weeks debating how to carve up the lucrative automotive supply chain, without success.

One look at a 2106 US ITC report crystallizes the impact of NAFTA, in particular, the key auto supply chain. Per the report

from 1993 (the year before NAFTA entered into force) to 2014, Mexican motor vehicle production increased from 1.1 million units to 3.4 million. Mexico’s share of NAFTA vehicle production increased to 19% from 8% during the same period. At the same time, Mexico became a more important automotive parts producer for the North American market. Mexico’s share of value-added content in North American final demand for motor vehicles, trailers, and semi-trailers from 1995 to 2011 increased to 9% from 4%, while US content declined from 63% to 43%.

According to the US Census Bureau, the US exported $243 billion worth of goods to Mexico last year, while importing $314 billion. Both totals are the highest ever with the southern neighbor.

The US does even more business with Canada, exporting $282 billion worth of products last year and bringing back $300 billion. While China is our single largest trading partner, combined our abutters make up 29% of our overall trade, which is considerably more than China’s 16%.

This week Reuters quoted US Trade Representative Robert Lighthizer as saying a deal was “nowhere near close.” The finger-pointing is starting in earnest.

None of this is good for businesses, which must make long-range decisions on everything from equipment purchases to plant locations to staffing. Whatever problem we are trying to solve, let’s hope it doesn’t cause a bunch of new ones.

 

 

Just What Gets Counted in the CIRCUITS ASSEMBLY Top 50?

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I received a note today from an EMS company that had revenues exceeding $400 million in 2017. Why, they asked, did they make the MMI Top 50 EMS list but not the recently released CIRCUITS ASSEMBLY Top 50?

It’s a fair question, and one that comes up each year. In short, MMI calculates its Top 50 differently than we do. While it states it uses calendar 2017 EMS sales, that is demonstrably incorrect.

Key Tronic, for example, which is No. 35 on the MMI list, had sales by quarter of

  • Q1 113.6 million
  • Q2 118.5 million
  • Q3 109.2 million
  • Q4 111.7 million

for a total of $453.1 million. MMI lists Key Tronic’s revenue at $467 million, which was actually the amount for its fiscal year ended July 1, 2017.

Another example: Ducommun. It is similar to many EMS/ODM companies in that it is part of a larger corporation that has other divisions unrelated to contract assembly. MMI has Ducommun listed as 32 on its ranking, yet its EMS sales were, by quarter

  • Q1 $78.7 million
  • Q2 $81.8 million
  • Q3 $79 million
  • Q4 $77.2 million

for a total of $316.7 million. The rest of its sales come from unrelated products such as motors, switches and other non-PCB components. The no. 50 company on the CIRCUITS ASSEMBLY Top 50 was Global Brands Manufacture, with EMS sales of $430.2 million in 2017. As such, in EMS only, Ducommun does not belong. (And again, MMI used the fiscal year, not calendar year, for the revenue total, even though its chart explicitly states otherwise.)

Another reason why the lists don’t match up is in the definition of “EMS.” CIRCUITS ASSEMBLY counts ODMs such as Foxconn, Quanta, Compal, Wistron, Pegatron, etc., because they design and assemble products for other companies. (We also take care to remove the revenue unrelated to direct design and manufacturing for third-party customers.) MMI includes some of these companies but not all. But MMI does include Alpha Networks, which is an OEM, selling almost all its products under its own name.

MMI also counts revenue from bare board fabrication (Flex, Sanmina, etc.), which we remove. Yet MMI does not include companies such as ZDT, Mektron and MFlex which perform vast amounts of contract assembly although their primary business is flex circuit fabrication. We do so because their respective assembly operations are huge – in the billions. If you buy components and assemble them onto circuit boards for external customers, you are an EMS. To not include such firms is a huge omission.

I will say, it’s not easy to align companies’ EMS/ODM revenues, especially when they use different fiscal years, accounting standards, and reporting methodologies. Throw in the fact that most of these firms have businesses unrelated to pure EMS, some are private, and several report in languages other than English, and the task becomes very exacting. This certainly should not read as a criticism of MMI (or anyone else’s) methods, because 1. I know how hard it is to get everything right and 2. I truly respect the data that MMI (and others) add to the industry domain.

 

PCB Industry on Fire — Literally

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The potential for fire is an occupational hazard of printed circuit board fabrication and assembly. Plating lines can be highly flammable, as can be ovens and the exhaust systems.

The deadly fire at Chin Poon in Taoyuan, Taiwan, over the weekend underscores how careful workers must be when building circuit boards — and how important it is for management to ensure safety practices are in place and followed.

The US tends to be reliable when it comes to fire safety. The last publicly cited incident was in 2016, when a minor fire broke out at TTM’s fab site in Anaheim.*

Overseas is a different story. Wurth’s plant in Neiderhall, Germany, was decimated by a blaze in 2014. The company rebuilt. Likewise, Unimicron spent millions to rebuild its site (the former Ruwel) at Geldern, Germany, following late December 2016 fire.

In Southeast Asia, blazes are all too common. Fires have been reported at ITEQ, Compeq Manufacturing, Gold Circuit (twice), Unitech (twice), Unimicron, Wus Printed Circuit and Tripod Technology (twice). Viasystems in Guangzhou was shuttered for a period of time following a 2012 blaze, and also sustained a fire in Zhongshan. Gold Circuit in Changsu .Taiwan PCB Techvest suffered a blaze in Suzhou, and Zhen Ding (ZDT) sustained one in Jiangsu.

And that doesn’t include another tragic incident which occurred last year at Unitech Printed Circuit Board in Taiwan, where four workers died after falling into a wastewater tank. They reportedly were overcome with fumes from the hydrogen sulfide present and lacked proper protective gear.

Assembly plants are risky too. Ovens and wave solder baths are potentially combustible, and it seems a cleaner explodes at least once a year.

A plant at EMS provider SVI Public Co. in Bangkadi, Thailand, burned to the ground in 2015. The last time we can recall a US assembly plant sustaining such damage was more than a decade ago, in 2005. That was a rough year for assemblers, as at least two were decimated by fires. Fawn Electronics, in North Carolina, chose to rebuild after a December fire leveled the plant. (It has since been acquired by ACDi.)

Workers at Mid-South Electronics weren’t so lucky: The EMS provider closed after a disastrous fire to its plant in Kentucky in January that year, leaving more than 700 workers out of jobs.

It’s commonplace to for management to say their workers are their greatest assets. We hope the tragedy in Taoyuan is a wakeup call for companies everywhere to review their safety practices and ensure the utmost caution is taken to prevent future disasters.

 

*Update: A good friend noted after this piece was published that ICM Controls’ captive board shop in North Syracuse, NY, was demolished by a fire in May 2017.

PCB Chat: Are Designers Lazy, and is Automation All-Important?

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“Content is the most important aspect of the design world right now,” says Manny Marcano, president of EMA Design Automation. Over the past nearly three decades, he has grown EMA into the leading Cadence Channel Partner as the exclusive distributor of OrCAD in North America. EMA has also developed a series of its own software products for library management, component supply chain data, and conducts training.

Manny talks about the role of automation and whether designers are keeping up with their profession this week as my guest on PCB Chat.

In Acquisition Mode, Foxconn is Turning Up the Heat

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OEMs, beware: Foxconn is coming for you.

No, not just to buy your components, build your boards and run your logistics. Foxconn is coming for your data, your markets, and your customers.

We’ve been sounding the alarm about this for years. It’s not healthy for your primary supplier to be bigger than the nearly the entire rest of the market. Foxconn, pushing $150 billion in revenues, is as large as the next five EMS/ODMs combined, and more or less as large as numbers 7 through 500.

The 2016 buyout of Sharp could be chalked up to a desire by Foxconn to nab a key technology and supplier to Apple, it’s top customer. The just-announced deal for Belkin, however, coupled with its foray into developing 5G computing and cloud platforms,, suggest a drive to higher margin, branded products. Foxconn’s revenue is larger than almost everyone of its customers, and a new plan to issue $50 billion worth of stock could give it the capital it needs to go on a massive acquisition spree.

OEMs, beware.

In China, A Bet on Tariffs

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Several news stories are breaking today about President Trump’s anticipated tariffs on scores of goods from China. On the list of items that will see new import duties is consumer electronics.

The effects of this move have the potential to go far beyond the administration’s stifling of a series of high-profile acquisition attempts, including Singapore-based Broadcom’s attempted not-so-friendly takeover of Qualcomm, or that of a Chinese investment firm’s deal for Lattice Semiconductor. One wonders, if the TTM-Meadville deal were in play today, what the ruling from the feds would have been.

China has successfully reached its goal of the “world’s factory,” but is it good for the US — or the world, for that matter — to have so much critical manufacturing concentrated in one place? I would argue no. Foreign companies get a raw deal trying to access the China market. The rules are set up to favor domestic companies, the government’s reach extends into all levels of private businesses, and the judicial system is weak, at best. As we have noted before, in China, “copyright” means “the right to copy.”

The US is the only economic body, except perhaps the European Union, capable of forcing China’s hand. China will not change on its own.

It would take a better fortune teller than me to predict how this will play out. On principle, some critics are primed to dismiss the administration’s move. But governments interfere in economic systems all the time. The entire US import system is one giant hurdle. So is Europe’s. It says here the risk is worth taking.

 

Talking Government Relations with IPC

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In my latest podcast, I speak with John Mitchell, president and CEO of IPC, and Chris Mitchell, IPC vice president of global government relations. They discuss the trade organization’s key government programs and initiatives, its annual member lobbying event coming up in May, and the importance of lobbying by member companies. Listen in at upmg.podbean.com.