Headline: “IEC Swings to Q1 Profit”
(I’m not.)
Author Archives: Mike
Wooden Thinking
Were you as shocked as I was Saturday when Sparton announced CEO Cary Wood had resigned?
Since he took over as president of the company in 2008 (he was named chief executive months later), the 48-year-old Wood has been a shining star in the EMS sector. He reshaped and reinvigorated Sparton. In 2006, the company’s sales were just over $170 million and the company was in dire need of restructuring. By 2011 it had turned the corner, and today sales top $430 million, with consistent profits. He led the buyouts of Electronic Manufacturing Technology, Onyx EMS, and Hunter Technology, among others, firming up its presence in the medical and defense markets.
The reason(s) for Wood’s sudden departure are murky. Sparton isn’t talking, although it did praise (albeit somewhat tersely) his contributions. The rumor mill is speculating the move was prompted by an exchange on the firm’s quarterly conference call last Wednesday between Wood and some hedge fund managers who felt the company should be far more valuable for shareholders and even suggested a breakup would be in order. One went so far as to say his “16-year-old daughter and small pack of Norwich Terriers could probably get the stock up 50% to 100% before the end of the quarter.” (Cue to the 27:50 minute mark for the quoted assertion.)
Another frankly asked why a couple Sparton customers are considering moving production in-house.
To his credit, as the exasperated fund manager called for the board buy back stock or step aside, Wood kept his cool throughout. He noted that the board has evaluated all the alternatives about how to deploy its capital, put a pause on M&A and is moving to optimize SG&A and performance.
This exchange gets at one of the tensions inherent in being a public company today. The market is controlled by institutional and hedge fund investors, not private citizens. It’s a cliche, but the goals of a short-term investor are fundamentally different than those of a manufacturer, especially one that generates a big chunk of its revenue building other companies’ products. There’s a fundamental disconnect between needing to invest for long-term survival and trying to squeeze the last bit of blood from the body before moving on to the next victim. Yet coming up with the financing to fund expansion and acquisition without ceding near-total control of the company can be near impossible without going public.
Sparton has spent north of $150 million in EMS related acquisitions in the past eight years, including $55 million for Hunter Technology last year. It is exceedingly difficult to live in the $100 million to $300 million or so market in the EMS industry today. Companies have to grow, and they typically have to come up with revenue streams beyond just soldering components.
Sparton is in better shape today than when Wood took over, and there’s no reason to think that will change in short order. But the industry needs to take pains to protect its good managers, because just building things well isn’t enough for long-term success these days, at least not for public companies.
Addendum: Here’s a link to a Crain’s Chicago Business article on Wood’s departure.
In Memory of Steve Chidester
Steve Chidester was a class act.
EDA software can be a cutthroat place, but good luck finding someone who would even think of saying something unkind about Steve.
Known inside Cadence as “Mr. Allegro,” Steve could as well have been called Boomerang for the way over three decades he always returned to the software company. Steve did three stints in all at Cadence, totaling 17 years. He had only recently returned to the company when he passed away from cancer last week at age 55.
While I had met Steve years ago, I didn’t really get to know him until he joined Zuken as head of product marketing in 2010. He was instrumental in getting the IPC-2581 data transfer format off the ground after 40-plus years in the mire. At Steve’s invitation, I spoke on the topic at Zuken Innovation World that year, although I resisted his repeated urging to present at the company’s user conference in Tokyo. Something about not being fluent in Japanese always held me back.
Little details like that could never stop Steve, however. He was an eternal optimist, never one to get down either on a situation, himself or others. Colleagues tell me that even after learning, in late November, that he had a particularly aggressive form of cancer, he downplayed it, saying it was treatable.
He spoke often of his family — he had nine children plus several grandchildren. That always appealed to me as well, as I like going beyond the regular job-speak and getting to know the folks I work with around the industry.
In an industry filled with generous people, Steve was a particularly kind soul. I will miss him dearly.
Is This the Future of AOI?
Engineers at MIT have designed an atomic force microscope that scans images 2,000 times faster than existing commercial models. With this new high-speed instrument, the team produced images of chemical processes taking place at the nano-scale at the rate close to real-time video.
Users Could Find New CES ‘Wearables’ Painfully Restrictive
The early reports from CES indicate wearable devices continue to be the hot item. Among the early headliners:
- Samsung’s WELT wellness belt, which is really a backpack that charges phones via solar panels, among other things;
- Samsung’s Smart Suit, which to my view does fairly mundane tasks like like unlocking your phone when you take it out of your pocket;
- Samsung’s lab also made a golf shirt that can sense the weather and UV ratings;
Samsung’s Smart Suit - Under Armour’s Healthbox, which features an activity tracker, chest strap and smart scale; and Samsung’s Body Compass 2.0, a sensor-laden workout suit that performs similar tasks;
- MadRat’s Supersuit, which is designed to play laser tag and other such games in a closed space;
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MadRat’s SuperSuit
Also coming from UA, a smart running shoe that tracks movement and lets users know when the shoe should be replaced.
What these devices have in common is the ability for users to track their activity — and by extension, their wellness — in real-time and on multiple platforms including their smartphones. What they can also do is amass a terrific amount of data that may or may not be used for their original intended purposes. In short, if you can collect and review the data, so can someone else.
Consider: What if health insurers were to require policyholders to wear devices that tracked such details? And what if your insurance rates were to climb simply on the basis of a weekend ice-cream binge? What if auto insurers could tell that you had activated your cellphone while in a driving, and could cancel your policy on the basis of that information? What if it was learned that you habitually played 18 holes during high ozone days?
While the ability to monitor one’s health using actual real-time data is eye-opening, are we opening a door to such data being misused, or at least, applied in a fashion that could have very real and life-changing implications for the user?
The Top 10 in PCD&F
Yesterday, we reported the top 10 best-read articles published by CIRCUITS ASSEMBLY in 2015. Today we list the best-read articles from PCD&F.
The list includes features that were published for the first time in calendar 2015. Rankings are based on web site hits, and do not include — for obvious reasons — the number of reads in the print version of the magazine.
1. “Embedded Passive Technology Materials, Design and Process,” by Hikmat Chammas
2. “Beyond the Vault: The Evolution of PCB Design Archiving,” by John McMillan.
3. “01005: Size Does Matter,” by Arbel Nissan.
4. “Trace Current/Temperature Relationships,” by Douglas G. Brooks, Ph.D. and Johannes Adam, Ph.D.
5. “Microsectioning of Laminates,” by Karin Rudman Prieto, Ph.D., Peg Conn, Lizabeth Lagos and Charles Lehmann.
6. “The Changing Face of the Hardware Design Engineer,” by Steve Hughes.
7. “Refining Lean NPI at Optimum Design Associates,” by Randy Holt.
8. “The 3 Challenges Facing the Future of PCB Design,” by David Wiens.
9. “How Hot Is My Via? (Cooler Than You Think!),” by Douglas G. Brooks, Ph.D. and Johannes Adam, Ph.D.
10. “In Search of Greater Tolerance,” by Peter Bigelow.
There was a definite advantage for articles that were published near the beginning of the year. If we adjust for timing, a feature on field solvers authored by Dr. Eric Bogatin and published just last month more than likely would have made the top 10. And although not reflected here, there was tremendous and perhaps disproportionate interest in flex circuits, given the smaller audience involved to-date in flex, with pieces by Mark Finstad (“Designing Flex Circuits For Wearable Electronics“) and Ben Jordan (“Designing a Successful High-Speed Rigid-Flex PCB“) just missing the top 10.
As always, we are grateful for our loyal readers and the many authors who contribute their expertise each month.
The Top 10 in CIRCUITS ASSEMBLY
For the past several years, we have taken a few moments at year-end to look back at the best-read articles of 2015.
The list includes features that were published for the first time in calendar 2015. Rankings are based on web site hits, and do not include — for obvious reasons — the number of reads in the print version of the magazine.
We’ll start today with the top 10 from CIRCUITS ASSEMBLY. Tomorrow we will list the best-read articles from PCD&F.
1. “How Clean is Clean Enough?” by Terry Munson, Paco Solis, Nick Munson, Steve Ring and Evan Briscoe
2. “01005: Size Does Matter,” by Arbel Nissan.
3. “Designing Flex Circuits For Wearable Electronics,” by Mark Finstad.
4. “Depaneling of Circuit Boards,” by Ahne Oosterhof and Thomas Nether.
5. “What You Cannot See Can Be Hand Soldered,” by Paul Wood and Bob Wettermann.
6. “A New SPI Tool for Defect Prevention,” by Chrys Shea.
7. “Zooming in on Digital Microscopes,” by Chrys Shea and Kristoffer Tømmergaard.
8. “China in Charge, by Dr. Hayao Nakahara.
9. “US or Mexico: Which Option Makes Most Sense for Your Project?” by Joe Villanueva.
10. “Cost/Benefit Tradeoffs of Capacitor Part Size vs. Manufacturing Efficiency,” by Chris Reynolds.
As you can see, a mix of technical and business-related pieces made up the top 10 this year. Interest was high in cutting-edge technology (multiple pieces on 01005s, wearable flex circuitry), but tutorial-type pieces on conventional technology held its own as well (cleaning, circuit board depaneling).
As always, we are grateful for our loyal readers and the many authors who contribute their expertise each month.
Happy Holidays!
With 2015 almost over, UP Media Group would like to take this opportunity to thank our advertisers, exhibitors, colleagues and loyal readers for another successful year. It was a good year for us, topped by another terrific PCB West.
We wish everyone the best for the holiday season and for a buoyant 2016!
Made in the USA
This is a pet peeve, so forgive me in advance.
Manufacturing in the US is by no means dead.
We don’t have nearly the number of unskilled or semi-skilled manufacturing jobs as once before, thanks in part to hands-free automation and a higher level of engineering knowledge / skilled labor needed for the non-automated work. Overall employment in the sector dropped about 12% between 2003 and 2013, and more than 20% from 1993 to 2013.
We are no longer the global leader in either manufactured goods — a title lost in 2010 — or valued added manufacturing — which we ceded in 2013 — although the data are skewed of late in China’s favor because of currency valuation changes.
And here’s no question manufacturing as a percent of GDP has certainly slipped in the US (and not to our advantage, but that’s a different discussion).
But even given that, in terms of how much the US produces, we still produce north of $2 trillion worth of manufactured goods every year.
That’s a really big number.
Now, how to get some of that back in the US printed circuit industry?
Automakers ‘Dashing’ for 3d Party Platforms
The fight for the dashboard is heating up as reports surfaced this week that two major automakers will ditch their current embedded software systems in favor of alternatives from Google and Apple.
Ford, which has dabbled with Apple’s CarPlay for two years even while using Microsoft Windows Embedded for its infotainment systems, drop Microsoft and migrate to an Apple-compatible platform, reports indicate.
Likewise, Hyundai is going all in on CarPlay and a competing system from Google called Android Auto.
There’s big money at stake. Automakers generate substantial profits on infotainment and related on-board gear: Ford bundles Sync with Sirius radio and other options in a package, priced at $1,250, which is purportedly nearly $1,000 higher than the OEM’s costs.
While the tools not only control today’s dashboard displays, they could be even more significant down the road as self-driving cars start to populate the roads, freeing vehicle occupants to do tasks once considered unthinkable in moving cars, such as shopping online.
So while the prospect of moving toward more interactive onboard systems holds promise and profits for the automakers themselves, major OEMs like Apple and Google stand to benefit from a captive audience inside the vehicle.
In the future, “keep your eyes on the road” may be replaced with “keep your eyes on the dash.”