Category Archives: Laying It Out

Off-grid thoughts from a burned-out designer turned editor.

What Goes Around

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Taiwanese printed circuit fabricators are feeling the pain of the currency crunch as their South Korean competitors have been taking advantage of the cheap won (and, in the cases of Samsung and LG, the home court advantage) to woo new orders.

As of today, one Taiwanese dollar is worth 38.1 won, down from a 12-month high of more than 40 won but still up 4.4% from the low. In the cutthroat world of PCB pricing, a 4% or more currency advantage is huge.

What’s interesting, however, is that Taiwan has noted South Korea’s government is intervening to keep the won cheap, which is precisely the argument the US government has made against China with its currency.

Oh, and most major Taiwanese board fabricators have plants in China. Few South Korean fabs do.

 

100,000 Down

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What’s the impact of the loss of 100,000 years of knowledge?

H-P is about to find out, because that’s how much experience is walking out the door.

The following is from the company’s official announcement about its Enhanced Early Retirement (EER) program:

“This is a distinguished group with more than 100,000 years of combined service—a group that represents an important part of HP’s legacy and has made incredible contributions to our success.”

No doubt, many of H-P’s brilliant minds are among those taking the buyout. It’s a shame.

The EMS-to-OEM Transition

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We list more than 2,400 sites on our Directory of Electronics Manufacturing Services Companies. Of  them, I would hazard to say at least 15 to 20% now offer some form of ODM/OEM work.

It’s not always who you’d think, either. While the obvious companies are there — Foxconn, Pegatron, Wistron, Flextronics, etc. — more and more smaller firms are joining the fun. Everyone from Hunter Technology, which builds discrete RF/microwave components in California, to Mikroelektronika, which makes fare boxes in the Czech Republic, are involved in some sort of original design manufacture or outright OEM work.

At some point I’ll sit down and count out the exact number. Suffice it to say, it will be significant. EMS firms never sit still.

Wasted Efforts

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The next time we start to complain about government or EPA rules being overly strict, remember this scene:

 

That’s the former site of CGA in Sanford, Maine, where “hundreds of thousands of abandoned circuit boards” having been strewn across three acres for the past 20 years. It will cost hundreds of thousands of dollars to clean it up. Every state has a similar story, and it’s a big reason why legislators and bankers are wary of helping the PCB industry. They can’t help but look at the past and worry that it will be repeated.

Riding High on Design

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The herd is riding on the EDA vendors, almost all of which are at or near 52-week high share prices.

In the past week, Cadence, Mentor and Synopsys hit or were trading just pennies off their yearlong highs. National Instruments and Ansys both traded much closer to their highs than their lows. Even Altium closed in on a high, but that’s a bit deceiving because it’s a penny stock and lightly traded on the Australian exchange.

So, is it the investor herd driving up an industry? Or is it a sign that the EDA market, which topped $5 billion for the first time in 2011, is geared up for a sustained run?

 

Do Research Parks Slow Advances?

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A recent visit to Champaign, Illinois, home of the University of Illinois, got me thinking about the relationship between industry and academia.

On south First St. just past the Assembly Hall, looms the Illinois Research Park. It is growing like crazy, with lots of big names in there. Yahoo, Littlefuse, SAIC and Raytheon are just some of the tech companies there, while Caterpillar and John Deere are among the others onsite and Intel and others are nearby.

The site’s Tech Incubator was in 2011 named in 2011 as one of Inc.com’s “10 Start-up Incubators To Watch,” and is home to more than 30 startups.

And given Illinois has one of the top engineering programs in the world, plus a low cost of living, it’s an attractive place for an OEM or software developer to park a design or engineering lab.

Lots of reasons to be proud, right?

Well, maybe. Certainly there needs to be some relationship between industry and academia. They fill in each other’s gaps. Industry provides the real world need and direction, while universities can engage in the long-range blue sky type of research that future groundbreaking technologies can be built on.

Not to throw a wet blanket on the fun, but is it possible whether the close proximity over time might have a potential negative effect? Is it possible that the near-term thinking industry might corrupt the focus on basic research that is the foundation of academia? Could the tight daily interaction provoke university researchers to limit their thinking to the obvious and doable, instead of dreaming the impossible?

The leveraging of academia shows no signs of abating. The question is, should it?

Whose Fault Is It, Anyway?

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The change in administration at IPC will inevitably dredge up lots of the past as various factions position themselves for a seat at the table.

Those whom hew to the line that IPC’s emphasis over the past decade has shifted to the assembly market are correct: IPC followed the money, and since the massive shift of printed circuit board fabrication to Asia starting in late 2001, assembly has where the North American money has been.

But that assessment  just as inevitably turns to anger and blame — fingers get quickly pointed at IPC for somehow failing the domestic PCB market. I’m not sure that’s justified.

IPC’s interest in programs for fabricators has waned; of that, there is no doubt. But it has waned in large part because fabricators themselves stopped supporting those programs. The PWB Presidents Meetings and the TMRC are shells of their former selves, it says here, because the members stopped forcing the issue. Keep in mind, IPC has long followed a “build it and they will come” model. That’s not a good strategy for a trade association. But fabricators who abdicated leadership over the IPC share much of the responsibility for what it’s become. It’s not that the IPC board of directors no longer reflects the needs of small guys so much as it’s that the board no longer reflects the needs of the private owner, large or small. No one complained IPC wasn’t doing enough for fabricators when representatives from large fabs like Photocircuits were on the board.

Could IPC provide better direction for the North American fabrication industry? Yes. But the Chinese have done just fine without the help of a strong domestic association. Given that, it’s hard to argue that IPC was the cause of the decline. Back in 2000, when the forecasts for high layer count boards were staggeringly optimistic for the foreseeable future, old friend Jack Fisher lamented that it would keep the domestic industry from investing in HDI for another couple years. He was right: none did. Then the bottom fell out, and none of them had the cash to invest in the newer technology, thus relegating them to third tier status. As one who participated in the IPC Technology Roadmap going back to its first incarnation, I can say microvias were clearly expected to take hold. In that respect, the IPC did its part; the industry just didn’t follow.

It’s uncomfortable to admit we got beat, and no, the playing field with China has never been level, and yes, IPC’s lobbying and related activities have been confused and ineffective, but there’s plenty of blame to go around, and not all of it was a trade group’s fault. We’d all be better off, I think, to focus on the needs of the future rather than the sins of the past.

Dark Cloud

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Cloud computing advocates beware: Apple’s cofounder thinks you’re nuts.

Holding forth in Washington last week, Steve (Woz) Wozniak said, ” ‘I really worry about everything going to the cloud. I think it’s going to be horrendous. … With the cloud, you don’t own anything. You already signed it away’ through the legalistic terms of service with a cloud provider that computer users must agree to.”

I will admit to not being familiar with all the various cloud IP agreements. But if the Woz is correct, this does suggest a serious wrinkle for those who see the cloud as a panacea.