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

Fixing the Fakes

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The US Senate Armed Forces Subcommittee may finally be taking the counterfeit problem seriously.

The subcommittee will hold a hearing next week to share results of an investigation into the development and procurement of fake chips for military use. This is long overdue, of course. The government’s own auditors have been pointing out just how widespread the problem is. It came to a head in 2008 when technicians working on an F-15 flight computer at Robins Air Force Base discovered four replacement semiconductor chips were fake. The legal trail traced the parts to a site in Shenzhen, and US courts extracted a guilty plea from one officer at the local distributor who resold the parts. (The owner committed suicide while awaiting trial.)

That the government is at long last getting involved is a welcome, if overdue change. This is one of those areas where an effective IPC government relations team could really have an impact. Instead of tilting at accelerated depreciation windmills which are better left to the big boys, this is a nitty-gritty technical issue with chilling overtones. All the conferences around the country are nice (and make money), but the real work requires pounding the pavement in Washington.

The Chinese Diaspora

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In what might be the most fascinating labor development to come out of China this year, major ODMs are relocating workers west due to labor shortages.

One major reason companies in Shenzhen packed up their factories and moved inland (with the government’s blessing) was to chase a larger supply of lower-cost workers. Shenzhen had become too expensive, and migrants from the western farms were no longer so eager to move to the Southeast coast to take jobs. The diaspora was supposed to resolve both

But today the news out of China is much different. Quanta Computer and Compal Electronics reportedly have moved employees from east to west to support factories in Chongqing City, a municipality with a population of more than 28 million (!), due to short labor supplies.

Even in a country of 1.3 billion people, cheap, effective workers apparently are hard to come by.

The Chinese Diaspora

Posted on by

In what might be the most fascinating labor development to come out of China this year, major ODMs are relocating workers west due to labor shortages.

One major reason companies in Shenzhen packed up their factories and moved inland (with the government’s blessing) was to chase a larger supply of lower-cost workers. Shenzhen had become too expensive, and migrants from the western farms were no longer so eager to move to the Southeast coast to take jobs. The diaspora was supposed to resolve both

But today the news out of China is much different. Quanta Computer and Compal Electronics reportedly have moved employees from east to west to support factories in Chongqing City, a municipality with a population of more than 28 million (!), due to short labor supplies.

Even in a country of 1.3 billion people, cheap, effective workers apparently are hard to come by.

Flood Pains

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Bangkok is responsible for 40% of Thailand GDP.

Which makes it all the more painful to recall this World Bank report from last year, in which the agency said rising temperatures and sea levels will increase risk of floods in Bangkok fourfold by 2050.

Most of the Top 10 EMS companies have operations in Thailand, and Cal-Comp (no. 6) and Fabrinet (no. 19) have most of their production there. It’s a major center for automotive production and, of course, a leading site for hard disk drives.

It’s also yet another reminder that access to cheap labor is only one component in the decision on  where to locate supply chains.

Boston Bulls

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To the list of those bullish on the prospects for US manufacturing, add the Boston Consulting Group.

The consultancy group has issued a report that, in essence, gives China about five years before the gap between the two nations is closed.

The report contains few surprises. BCG points to steady increases in China’s wage rates and logistical costs, coupled with higher productivity in the US, as reasons for its optimism. Automation in China will have a deleterious affect on manufacturing there, as it will further reduce any labor rate advantage.

Moreover, any shift to other lower-cost nations such as Vietnam or Brmitl will be mitigated in part by those nations’ weaker infrastructures.

Pointing to past successes in fending off Taiwan and Japan, BCG says that US manufacturing sector in well into a period of adjustment and retrenchment, and “conditions are coalescing” for another American factory resurgence.

Worth a read.

Pay to Work

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Here’s fodder for those who believe government should stay out of the “job creation” business. In the past few years one Florida county gave tens of millions in direct funding and tax breaks to a series of companies that are now accused of not having delivered on their employment promises. It’s not clear from the news item, but it appears one of the companies — Jabil — never lived up to its job guarantees and the state is now trying to renegotiate the contract.

 

Microsoft to Harden Sustainability Line

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Microsoft says it will start requiring some suppliers to provide annual sustainability disclosures starting in 2013.

About a dozen of its key vendors will be notified about the new reporting process in the coming months, Microsoft said.

Microsoft, of course, sells relatively little hardware, most famously its Xbox video game system. (It pulled the plug on the Zune media players earlier this year.) Celestica, Flextronics and Wistron have been some of the xBox manufacturers, and Flextronics also built the Peabody mobile phone platform, and Flex and Hitachi have worked on Kinect. So we have a pretty good idea of who will be on the receiving end of those first phone calls.