Category Archives: Hot Wires

Mike Buetow’s thoughts on the industry

OEM/EMS Barrier Permanently Cut

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For years we’ve been told that EMS companies are in the service business only and would never develop their own products. In one of the first interviews I did, back in late 1991, then IPC director Tony Hilvers — a leading proponent of the then-emerging CM industry (it wasn’t even called EMS then; that term was coined by Sue Mucha the following year) — insisted to me that contract assemblers wouldn’t go down the product development and branding path because it would put them in position of competing with their customers.

We can bury that old saw. With today’s news that Foxconn has, at long last, bought Sharp (for the low, low price of $3.4 billion), the loop between EMS and OEM has been drawn taut.

Not that this is ground-breaking in practice. Certainly, many, many EMS companies have, through acquisition or otherwise, developed and marketed their own products. Our 2009 EMS Company of the Year had a healthy, branded keyboard product line. And we estimated in this space in 2012 that 15 to 20% of the (then) 2,400 companies listed in our EMS directory did some degree of ODM/OEM work.

Going further, we wrote in 2015 we felt the line between EMS and ODM has been “permanently crossed.” But the Foxconn-Sharp marriage takes it to an entirely different scale.

Whether the Sharp name stays on its product lines, which range from Aquos televisions to smartphones to solar panels, and includes the OLED technology so prized by Apple that it compelled Foxconn to write the check in the first place, remains to be seen.

Either way, there’s no going back. EMS is now OEM. Going forward, who is the customer they will serve? And knowing the line keeping their suppliers from their end-customers has been permanently breached, will this spur OEMs  to reestablish their assembly operations?

Good Talk

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The big story out of IPC Apex Expo last week – about the only story, really – was the introduction of an open communications standard by Mentor Graphics’ Valor division, followed by the rapid response by more than two dozen assembly equipment providers and software developers over shared concern that the solution to machine-to-machine communication might end up residing in the hands of a single company.

At the heart of the matter is the so-called Industry 4.0. Also referred to as IIC (US), Made in China 2025 (China), Industrial Value Chain Initiative (Japan), Manufacturing 3.0 (South Korea) and other names, it stands for the capability for different equipment, made by different OEMs, to share bi-directional data over an open, yet secure, platform. Done right, it’s a major step toward permitting manufacturers to pick the best machines for their specific needs, versus being beholden to a single line solution. Fundamentally, it’s at the heart of a fully beating Internet of Things; some feel the fully automated factory can increase production efficiency by more than 30% over time, adding billions or more to national GDPs.

Let’s start with the Mentor specification. Two years in the making and announced just prior to the annual IPC trade show, it was released at the Las Vegas event as OML, which stands for Open Machine Language. Having years of experience writing translators for various assembly line machines, Valor took those translators and installed OML in front of them, and packaged the combination in a black box. Thus, in a relative instant, a solution to a much-discussed electronics assembly problem was at hand; OML satisfied the need for machines to talk to each other, and the box handled any connectivity issues.

Mentor planned to make OML available to any company through a partner program and would retain ownership over the protocol while relying on the partners to help shape the future direction of the specification.

In Las Vegas, of course, everything’s a gamble. Once word got around the show, equipment vendors said “not so fast.”

Mentor’s angle was to multiply the use of IoT through OML, thus exponentially expanding the market for its Valor tools. Perhaps worried by the legalese, or the potential for a single “owner” to license and potentially change or even shut out competitors, roughly two dozen assembly OEMs met over the course of two days to hammer out an agreement that reshapes the trajectory of the specification. Several equipment OEMs PCD&F/CIRCUITS ASSEMBLY spoke with agreed OML is technically sound but felt the business issues inherent in licensing a corporate spec could pose a host of problems. Up against this strong front, Mentor pivoted and offered OML as a starting point for a to-be-determined IPC standard.

In one sense, then, bi-directional communication goes back to the drawing board. Some 15 years ago an IPC committee published a shop floor equipment communication standard labeled IPC-2541 and colloquially known as CAMX. One presenter at the Apex sessions demonstrated how IoT could work using enhanced CAMX. The early take – and this has yet to be finalized, as not even the charter is on paper yet – is the task group will study a combination of OML, CAMX and perhaps other, yet-to-be-written software as part of its IPC mission.

All sides agree there will be an emphasis on speed. If nothing else, OML forced the industry to confront the fact that not only is a standard needed, it was needed yesterday.

Going forward, it will be up to each software company and manufacturer to leverage the IPC standard as they see fit. It remains to be seen if Mentor will ultimately concede OML or whether it will attempt to go it alone.

Some will recall a similar scenario with the data transfer formats for printed circuit board designs. Various specifications sat mostly idle for years, IPC-D-350, IGES and EDIF among them, until the powers behind Valor’s ODB and IPC’s GenCAM formats squared off. Valor donated the XML version of ODB to IPC in 2008, yet continues to maintain its ODB++ format. GenCAM evolved into IPC-2581, and upon Mentor’s purchase of Valor, finally gained traction among worried software competitors and OEMs who feared being shut out of markets or forced to switch tools.

Regardless of the back story, this is where the industry stands today, and a basically workable plan is being formulated. The speed with which the industry moved – and Mentor should be thanked for spurring action – screams the need is present and widespread, and there is general consensus on the solution. That’s a great story. After all, in electronics, how often does that happen.

Happy St. Patrick’s Day!

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And some trivia. You may have noticed that the soldermask used on most PC boards is green, as is the paint used on most steel truss bridges. Why is that? And what do the two things have in common? Why green PCBs and why green bridges?

To answer, I brought in color expert expert Patty O’Patrick O’Dell, who stated: “Many bridges and PCBs are green because they absorb red and blue light, only reflecting the green.”

That wasn’t quite what I was getting at, but close enough. The important thing, is that, generally, in commercial products, the PC boards are hidden, so the color doesn’t matter that much. With prototypes and a lot of the hobby or development boards, that is not the case, so many companies have chosen to use a different color as a part of their identity.

Arduino products are blue, as are most boards from Adafruit. SparkFun makes theirs red. Ti Launchpads are red as well. The Beaglebone uses color, essentially, as a model number; Beaglebone black, Beaglebone green. This is possible because major PC board fab houses have made different colors more economical than they used to be.

I’ve been asked if the color makes any difference electrically. In general, no. If you’re dealing with super high speeds, RF, or other exotic conditions, it’s always best to ask your board house. In those fringe areas, a lot of things have the potential to make a difference. Other than that, if you can afford it, and want to make a statement, go for it. You can often get different color silk screen legend too. Just make sure there’s contrast between the two. White silkscreen on white soldermask would not be the best choice.

Duane Benson
Beware the monsters from Id

blog.screamingcircuits.com

Goldman Moment

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Congratulations to my old friend — as in “long-term”; I would never dare call her old — Patty Goldman, who was inducted into the IPC Hall of Fame this week (long overdue). In doing so, Patty becomes the first woman inducted to receive IPC’s highest honor (also long overdue).

I was on the IPC staff when Patty was chair of the Technical Activities Executive Council, which sets the priorities for all IPC standards activities. She ran that group of unruly engineers with an iron fist (well, really a gavel), demonstrating that not only could some sense of order and civility be brought to the Council, but that their meetings didn’t have to last four hours, either.

Way to go, Patty!

An Electronic Business Card Holder

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I design and build electronics at home, late at night when the spiders are out, and by day, I put my hours into Screaming Circuits. My job here doesn’t involve building things. I’m the marketing department, but I like to keep as much manufacturing smeared all over me as is possible. Here’s one way I do that.

Business cards are a bit of an anachronism today. I don’t give out many, this being the 21st century and all, but I still need some on my desk – I guess to look businessy or something. No one’s ever given me a cheap card holder with their logo on it, and I don’t want to just scatter cards around. So, why not combine my need to display business cards on my desk with my compulsion to create electronic things? With that thought in mind, I decided to build an electronic business card holder. Of course, I first had to decide just what an electronic business card holder would be.

Here’s what I came up with:

  • It should be small, about the size of a business card
  • It should have a lot of blinky lights
  • It should do something when a card is removed
  • It should have a long battery life
  • It should use tiny parts to show off our manufacturing capability a bit
  • It should be 100% buildable within our electronics manufacturing process (meaning it should be just electronics; no bolts or case)

That’s not a long list, but does involve a few decisions. I’m pretty familiar with Microchip PIC processors, so that would be a logical choice to drive the thing. Arduino compatibility would be cool, but I’d have more trouble with battery life, and the PIC microcontrollers come in some pretty inexpensive forms.

I’d recently been using a variant of the PIC18F46k22 on another project. I comes in a 5 x 5mm QFN package and can be purchased for less than $3 in small quantities. it has plenty of I/O and can be set to a very low power sleep mode. I settled on that MCU and a CR2032 coin cell battery for power.

Rather than add any extra hardware to hold the cards, I came up with an arrangement of pin headers and small push-button switches. (as in the photo below right). One header is the six-pin Microchip in-circuit programming (ICSP) header, and the other is a six-pin I2C/SPI header. Not that I need I2C or SPI, but with that, you could turn this into a robot business card holder or something.

I considered a light sensor to detect when a card is being picked up, but that would require leaving the A to D powered up, and it would be less reliable due to changes in lighting. I looked around my junk box at home, and found a Freescale MMA8452 3 axis accelerometer in a 3 x 3mm QFN package. It also has a decent low power mode, and can be talked to over I2C.

Some 19 GPIO pins remained open, so naturally, I had to put in 19 LEDs.

Stay tuned for my next installment, where I’ll go through some of the design decisions. At the end of this series, I’ll be giving out 10 of these, so stay tuned to see how you might be able to get one.

Duane Benson
If you dreamed you saw the silver spaceships flying
That’s a okay. They’re RoHS compliant

http://blog.screamingcircuits.com/

Linc’d In

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I never worked directly for Linc Samelson, but it’s safe to say I wouldn’t have had a career writing about electronics design and assembly were it not for him. I certainly wouldn’t have many of my good friends.

Linc passed away last weekend at the age of 89 following a car accident. He was a lifelong entrepreneur, going from engineering college student to a career in the Navy, followed by a degree in journalism from the University of Illinois in 1948.

After some time in the electrical insulation manufacturing industry, Linc recognized the need for a trade publication. That prompted he and his father to launch, in 1955, a company called Lake Publishing, named after Lake Forest, the town north of Chicago where their first offices were.

Their startup magazine, Insulation, grew and eventually was renamed Insulation/ Circuits. The electronics trade publishing industry would never be the same.

Fast forward to 1991. At that time, Lake Publishing had relocated to a far north Chicago suburb of Libertyville. To his group of journals Linc had added a number of titles — Microelectronics Manufacturing and Testing (MMT), Hybrid Circuit Technology (HCT), and eventually Surface Mount Technology (SMT).

SMT started as a seasonal supplement to HCT, then grew into a standalone publication. And in 1991, just one year out of college, I joined the magazine as associate editor.

At that time Linc was in transition too, having sold the company to a subsidiary of Information Handling Services. (According to lore, IHS bought Lake with the idea the magazines would serve as a monthly advertising vehicle for its component catalogs. Unfortunately for IHS, no one from the corporate offices in Denver ever bothered to send the ads.)

As an owner, Linc seemed to understand the nature of people. He had a racquetball court installed in the building and tennis courts outside. On Fridays came happy hours, with a keg of beer tapped to celebrate the weekend. (This was a different era for a lot of reasons.) His employees were never going to get rich working for him, but he did invest strategically, be it in equipment or brand positioning, always making sure there was an army of staff representing the company at trade shows.

Linc married my former colleague at Lake/IHS and longtime friend Jennifer Samelson (nee Read), with whom he raised seven children. Besides his wife, Linc is survived by 16 children, 19 grandchildren and three great grandchildren. He continued working into the late 1990s.

Through the years, Linc remained a favorite topic for me and former colleagues, some still in the industry, most now out. He brought us together, and in many ways launched us on our careers. I will always be grateful for his foresight and vision.

Wooden Thinking

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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.