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

China Inc. Hits a Snag

DigiTimes is reporting that a new round of fees levied by China on MNCs doing business there has bankrupted hundreds of electronics companies, and threatens the solvency of thousands more. The fees, which underwrite worker medical and injury insurance, are on top of government-mandated salary hikes. China has quietly extended the structure from covering just workers during their actual time of employment to underwriting their post-employment coverage as well. (Employees contribute a portion, but the businesses cover by far a majority share.)

More than 300 firms are said to have gone under already, and a Hong Kong official forecasts some 2,500 to 3,000 firms face bankruptcy this year alone.

And they say the US is unfriendly toward business.

It’s a fascinating turnabout for China Inc. and its “if we build it, they will come” attitude toward business, manufacturing in particular.

Now, there are many ways to view this. One is that, given the dollar amounts involved are rather low, the companies affected probably lacked the resources to compete over time anyway. A second is that China is targeting Taiwanese companies as part of its long-term strategy to force the island nation further under its umbrella (although from the story, non-Taiwanese companies are also being hit hard). A third is that China sees this as easy money and a way to look out for its domestic citizenry much in the way, say, the US levies Social Security taxes on alien seasonal workers even if they return to their home countries each fall and will never draw upon that retirement fund. And a fourth is that China recognizes that growth alone won’t pay for the soon-to-be top-heavy population it faces as the 1 child per family policy changes the age-plot dimension from rectangular to an upside-down pyramid.

But coupled with the staggering increase in wages seen there over the past few years — with many more to come — and China’s long-term dominance of manufacturing no longer feels like a fait accompli.

 

Intelligent Design

In my monthly column for PCD&F last month, I was ostensibly discussing standards and how they come to be. The first standard I worked on was IPC-D-350, one of the first of the would-be slayers of Gerber, the so-called unintelligent data format. Indeed, I’ve spent a good part of my life watching electronic data transfer formats come and go, and at the end of the day, Gerber, warts and all, has remained the one to beat. So I’m not prepared to rise up and shout to the heavens that IPC-2581, the latest iteration in 40 years’ worth of attempts at an “industry” standard, is at long last the answer.

But as we noted in “Around the World
,” there are enough notable differences in the process this time around to make it newsworthy. First and foremost, there are real live CAD tool vendors not just showing up at the meetings, but actively participating (!).

To understand why this is significant, we must go back to my IPC-D-350 days. Digital Equipment and the late, great Harry Parkinson were instrumental in trying to revive interest, and we at IPC also had support from several smaller software folks like Dino Ditta at Router Solutions and Steve Klare at Intercept Technology. But we never managed to break through, and a big part of the problem was the major CAD vendors’ collective refusal to offer IPC-D-350 as an output (or input). The response always was, “We’ll do it if our customers ask us.” But what they were really saying was, “We don’t want to make it easy for our customers to migrate their designs to a competitor’s tools.”

In the meantime, AT&T offered up RS-274X (aka extended Gerber), which UCamco continues to support, and Valor developed ODB++, and (like Gerber) while it was originally conceived as much a machine language as a format for electronic design data, it was accepted by fabricators desperate for something, anything, more intelligent than Gerber.

Under the leadership of Dieter Bergman, IPC also continued the fight, enlisting the help of the National Institute of Standard and Technology (NIST) through not one but two (GenCAM, Offspring) successors to IPC-D-350. (For a short history of the standards, click here.) Yet even now, after decades of trying, no group has been able to dismount Gerber from its perch, and it’s long past time we did. Data transfer formats are not something anyone ever will make money from, but every day we go without a better one, everyone will lose some.

Curiously, just a few weeks ago, I was contacted by David Gerber, son of H. Joseph Gerber, who invented the photoplotter and the eponymously named de facto standard that ran it. Gerber’s genius cut across many industries, from electronics to apparel, and he was awarded the 1994 National Medal of Technology for his life’s work.

For such an esteemed inventor, Gerber’s backstory is even more interesting than his career. As a teenager in 1940, he fled Nazi Germany for America. As an aeronautical engineering student at Rensselaer Polytechnic Institute, he discovered a way to reduce the time-consuming nature of graphing calculus problems using (seriously) an “expandable ruler” created from the elastic waistband of his pajamas. And of course, he formed The Gerber Scientific Instrument Co. in 1948, which is still going strong today.

The younger Gerber is writing a book about his father’s exploits. I look forward to learning more about the life of one of our industry’s true unsung heroes. But at the same time, I’m going to do everything I can to help retire one of his legacies.

In our cover story this month, Hemant Shah and Keith Felton of Cadence explain a new consortium taking root. The consortium is backed by a Who’s Who of OEMs and EDA vendors, including Harris, Ericsson, Fujitsu, nVidia, Sanmina-SCI, Cadence, Zuken, Adiva and Downstream Technologies. Its goal is to accelerate the adoption of IPC-2581 as an open, neutrally maintained global standard to encourage innovation, improve efficiency and reduce costs. The members are committed to adopting IPC-2581, which as I noted gives this latest effort a big leg up on all previous attempts.

Where does UP Media Group stand on this? For 20 years, we have supported the development of an intelligent, robust format for electronics data transfer. As such, we fully support the consortium’s effort to ensure a viable, supported and independent data transfer format that is driven by user needs.

That new task group attempting to update IPC-2581 recognizes that design needs will at some point “break” Gerber. Many of the players are new to the game, and a lot of the old rivalries appear to have died off due to retirements and, well, death. That’s good, because the industry needs a better standard than Gerber. Thanks in part to his son, Joseph Gerber’s name and many contributions will hopefully never be forgotten. But it’s time his namesake data format is.

Change Time at Cadence?

John Bruggeman, senior vice president and chief marketing officer of Cadence, is leaving the company after two years. This comes as something of a surprise to many industry watchers, given Bruggeman’s prominent role in reshaping the EDA vendor following its revenue drop and ill-advised play for Mentor Graphics in 2008.

In laying out his EDA360 vision, Bruggeman asserted software must help profitability as much as productivity, and that future designs will be app-driven, in which users would start with the applications and then overlay the optimized hardware/software.

In doing so, Bruggeman echoed hardware design industry guru Lee Ritchey, who famously said at a Printed Circuit Design-sponsored tech session that users buy the hardware to run the software.

Bruggeman’s departure has raised the question about Cadence’s executive succession plan, and whether he lost a battle to run the company in the future. Again, some analysts feel CEO Lip-Bu Tan plans to step down sooner rather than later, and that Bruggeman’s resignation paves the way for senior vice president of worldwide field operations Charlie Huang to ultimately ascend the throne.

Stay tuned.

‘Dark Silicon’

Dark silicon refers to the underutilized transistors on a microprocessor. And those transistors are deliberately shut down during certain operations in order to contain the heat buildup that otherwise might fry the entire chip.

Some experts now say up to one-fifth of the of the transistors on the higher-performing chips will need to “go dark” to stem the chances of incorrect results at the least and a fried chip at the worst.

While users perpetually want faster devices, a group of US researchers have modeled expected microprocessor speeds and utilization and found that computing speeds will rise only 8 times their current pace over the next 15 years because of the limitations caused by potential overheating. They further argue that speeds would increase about 47 times if the problems of heat can be overcome.

The solution? While dual and quad core microprocessors have become mainstream today, more advanced chips could have between 100 and 1000 cores. Intel, for one, already uses multiple cores and next-gen chips will optimize those cores for different operations, helping to reduce the amount of power used (and thus heat generated).

 

One-Stop Shop

If you are looking for a snapshot of the latest (or historical) market statistics, we’ve begun compiling all the data from a host of sources in one place on the PCD&F website.

Among the data we are posting include book-to-bills and sales and orders of:

  • EDA software
  • Semiconductors
  • Passive components
  • Printed circuit boards
  • Key end-markets such as PCs, servers, mobile devices, etc.
  • Wafer utilization.

Sources include EDAC, SIA, SEMI, Gartner, IDC, IPC, ZVEI and other research firms and associations. Check it out!

One-Stop Shop

If you are looking for a snapshot of the latest (or historical) market statistics, we’ve begun compiling all the data from a host of sources in one place on the CIRCUITS ASSEMBLY website.

Among the data we are posting include book-to-bills and sales and orders of:

  • Semiconductors
  • Passive components
  • Printed circuit boards
  • Key end-markets such as PCs, servers, mobile devices, etc.
  • Wafer utilization.

Sources include SIA, SEMI, Gartner, IDC, IPC, ZVEI and other research firms and associations. Check it out!

Elcoteq’s Basket Had Too Few Eggs

Thanks to Europe’s fairly generous insolvency laws, Elcoteq will likely survive having run out of cash (which isn’t easy for a $1.5 billion company to do). But the industry will be reminded — again — of the danger of having too few eggs in a given basket.

Elcoteq fared beautifully for years as Nokia’s primary EMS supplier. At one point, Ericsson and Nokia made up 92% of Elcoteq’s annual sales. Revenues almost doubled in 1999, then tripled in 2000. As the saying goes, it seemed like a good idea at the time.

But Elcoteq did not anticipate that the 20-year relationship with Nokia might be undermined by emerging markets and their concurrent price pressures. Nokia, saddled with innovation-debt and fierce competition, fell victim to the market share chase and effectively bolted to Foxconn and Jabil. Years of acquisitions had taken their toll on Elcoteq’s cash, which ran frightfully low during the 2009 recession. A deal with Shenzhen Kaifa Technology, which would have brought in much-needed cash, failed to materialize.

Despite turning a profit last year — its first since 2006 — cash from operations was just 9.4 million euros. You know things are bad when you are left to asking Hungarian banks for money.

As of today, Elcoteq employs 7,000 workers across all major regions. A year from now, I’m guessing it will be half that. The company simply hasn’t proved it can build a sustainable business without the generosity of a major patron.

A Story Worth Reading

For many outside our industry, the name Gerber is synonymous with baby food. But for those in electronics design and assembly, Gerber means something much different indeed.

Still, how many realize the backstory of the man who invested the machine language-turned-data format?

H. Joseph Gerber invented the photoplotter and the eponymously named de facto standard that ran it. Gerber’s genius cut across many industries, from electronics to apparel, and he was awarded the 1994 National Medal of Technology for its life’s work.

But his life is in many ways even more interesting — and certainly more dramatic — than his career. As a teenager in 1940, he fled Nazi Germany for America. As an aeronautical engineering student at Rensselaer Polytechnic Institute, he discovered a way to reduce the time-consuming nature of graphing calculus problems using (seriously) an “expandable ruler” created from the elastic waistband of his pajamas. And of course, he formed The Gerber Scientific Instrument Co. in 1948, which is still going strong today.

Gerber’s son David is writing a book about his father’s exploits. I look forward to learning more about the life of one of our industry’s true unsung heroes.