A couple new podcasts to call your attention to.
In one, I speak with my longtime friend Randall Sherman, the EMS/ODM analyst and founder of New Venture Research, on recent developments in the market and how EMS companies are leading innovation by building intelligence into production systems.
In the second, I discuss the ongoing issues faced by the supply chain, and especially fabricators, in the wake of AS9100D.
The podcasts can be found at https://upmg.podbean.com.
Foxconn’s prospectus to issue a public offering to raise money for its nascent foray in to cloud computing is less revealing for what it proposes than where the offering will take place.
Rather than leverage its newfound admiration in the US (or at least, in a couple pf offices in Washington) by accessing the Nasdaq or NYSE, instead Foxconn is opting for a far less prominent bourse: the Shanghai Exchange.
The reasons are obvious: The Shanghai bourse lacks the capital controls and oversight of the world’s dominant financial exchanges. A company, even one as large as Foxconn, can get away with a lot more, since reporting requirements and level of scrutiny are so less rigorous than in New York or Munich or London. Foxconn’s financial picture is opaque: even reporting on its revenues and profits remains an uncertain undertaking. Staying offshore makes that possible.
Finally, Shanghai is a Chinese exchange and Foxconn is a Chinese company. (Yes, I know it’s based in Taiwan. But look where the bulk of its facilities, workers, investment and attention is. And keep in mind that for many Taiwanese, China is still the motherland.) This latest move underscores that fact.
The sums aren’t huge, and the research decidedly blue sky, but the US Department of Energy is following through on an Obama-era initiative to fund early-stage research projects aimed at innovative technologies and solutions in advanced manufacturing.
The Office of Energy Efficiency and Renewable Energy Advanced Manufacturing Office (AMO) today announced $35 million in awards to universities, national laboratories, and for-profit and nonprofit partners to a host of universities, national laboratories, and other entities
Among those with specific implications for electronics design and manufacturing:
Many of the other grant recipients are working on concepts similar in nature to the Dana Farber and Zyvex projects whereby atoms would be pushed around and connected. While those projects are targeting clean energy and other applications, it is possible the technology would have applications in electronics as well.
On PCB Chat this week we talk with Mark Hepburn, the new director of product management at Cadence. Some industry veterans may remember Mark from a few years back — he was with Viewlogic, Innoveda and Mentor in the late 1990s and mid 2000s. He spent the past eight years with Perception Software, a developer of collaboration software.
Fittingly, he joined Cadence just in time for its launch of Allegro Pulse, a new web-based platform for collaboration and productivity measurement and analysis.
The market for electronics design software continues to outpace gains in overall electronics demand, with sales up 8% year-over-year in the September quarter. PCB/MCM tools rose even faster — up 13.4% for the period.
Wally Rhines, president and CEO of Mentor and spokesman for the ESD Alliance of EDA companies, spoke with me about the results for the latest PCB Chat podcast.
Peter Bigelow pens a timely and salient column on the current crop of new employees and the differences in culture with the veteran workforce. (Sample comment: “Collaboration cannot exist if everyone shows up to work at a different time.”)
As usual, Peter makes some fascinating observations. I’ll add my own 2 cents.
Smartphones, video games, etc. have a demonstrable affect on users (of any age, actually, but particularly youth). The constant stimulation of the digital world is addicting, and physically changes your brain structures. I’ve had to institute rules for my kids (ages 12 and 14) about screen use for even the simplest of activities. (They actually reached the point where, when they would see me pulling up to pick them up, they would then get on their latest mobile game while walking to the car).
It’s no surprise, then, that this behavior carries over to the workplace. Young people are hooked.
Ironically, I’m the one in our house constantly fighting to get the kids away from their screens. My wife, who knows more about the brain than almost anyone, seems almost blasé about it. Grrrrr….
It took until the second business day of the new year for the chips to start falling in the US printed circuit laminate industry. On the same day, Isola changed hands and Park Electrochemical announced it was putting its PCB unit up for sale.
As the East Coast braced for a winter blizzard of epic proportions, Park Electrochemical sent a cold shiver down the spines of more than a few industry observers with its announcement of a “strategic evaluation” of its core printed circuit materials business, one that could result in a sale.
Park has been paring its PCB operations over the past few years amid falling revenues and tighter margins. Said revenues have been falling despite a rebound in the overall PCB market: Even as aerospace revenues have grown, overall Park sales have fallen year-over-year in 10 of the past 11 quarters, more than half the time by double digits.
Although it generates most of its revenue from the PCB materials unit, sources indicate the firm sees more upside in its aerospace materials division, which isn’t as susceptible to the commodity pricing pressures of board-level laminate. The sale or closure of the division could further disrupt the North America supply chain, however.
Park’s long history is heavily intertwined with that of the North American PCB industry, and one of the last remaining “family” firms. Cofounded in 1954 by Jerry Shore, his son Brian is now CEO and grandson Ben a senior vice president. Its sale, whenever that day comes, will truly mark the end of an era.
Meanwhile, in Arizona, Isola completed the transfer of its equity ownership to an investment group led by Cerberus Capital Management. This deal was not a surprise: Isola had reportedly been trying to restructure a debt load of more than half-a-billion dollars since last summer.
Isola was primarily owned by the investment firms TPG Capital and Oaktree Capital Group. It’s unclear at present how the stakes in the company are now divided. No doubt Isola won’t be one of the bidders for Park, however.
Couple this with the changes at Arlon over the past two years, and the US laminate industry continues to be in flux. Many of the other major players appear stable: Kingboard, Shengyi Technology, Nanya, Panasonic, Ventec (which merged with TMT in 2016). Among US-based vendors, Rogers’ position at the high-end has enabled it to remain financially sound. It may be the only one.
Demand for lower-tech materials isn’t enough to sustain footprints in higher-cost markets. M&A can result in stronger, more viable companies. Let’s hope that the future for Park (or whomever buys it) and Isola are brighter than the present, as the North American supply chain depends in large part on their success.
Jan. 5 update: Investment bank Needham & Co. says the Electronics unit could bring $50 million to $80 million in a sale.
The history of consolidation in the semiconductor industry, in one slide:
Source: Fortune
Here’s a good recap and summary of the state of Foxconn today, including some thoughts on its future. The sense that Foxconn does not believe in competing with customers is outdated, given its foray into phones, among other devices.
Productronica was, as usual, slightly surreal. The enormity of it cannot be overstated. Attendance at the Munich-based event was up 20% from two years ago to 44,000, per exhibition officials, although it’s not clear how many of those visitors were for SemiCon Europa, which colocated with the biennial show for the first time. Still, for those in the market for new equipment, or just perusing to see the trends, there was more than enough to keep them busy the four full days. For a full report, click here.