Category Archives: Laying It Out

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

The Top 10 in PCD&F

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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.

Raspberry Pi — What’s It All Mean?

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What would you do with a computer that costs $5?

First, let me explain a bit. The Raspberry Pi, if you don’t know, is a small, inexpensive single board computer designed by the non-profit Raspberry Pi foundation in England. Its mission is to make computer-related education less expensive and more accessible to the masses. As a next step in that mission, it just introduced the Raspberry Pi Zero, with an MSRP of $5. So, you can buy a Big Mac, or a Pi Zero. You could buy some peanut butter, jelly and a loaf of bread, eat that for the next five lunches, and buy five Pi Zeros.

Now some folks have complained that it’s not very useful on its own. It needs a wall bug power supply, a micro SD card, a few cables, and a USB hub to connect a keyboard and mouse to.

That’s true, if you want to use it as a full PC workstation, which you can. It runs the “Raspian” distribution of Linux. But, I don’t think that’s where the greatest potential for this thing lies. No, I wouldn’t use this as a workstation. It’s biggest potential, in my opinion, is as an inexpensive embedded controller.

It has I2C, SPI, and RS232 pins available, as well as plenty of GPIO. Attach a small daughter card with accelerometer, gyro, magnetometer, and GPS, and you’ve got a nice drone auto pilot. Attach a few sensors and a cell phone module, and you’ve got a remote data logger. What would you do with one of these?

Duane Benson
Little Jack Horner couldn’t get a plum out of this pi.

http://blog.screamingcircuits.com/

The New Verticals

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Chasing the vertical OEMs is not a new strategy in EDA.

But it is becoming that much more widespread as the major players extend their reach from automotive (long the domain of Mentor Graphics) to other sectors.

Semiconductor design companies — the linchpin to the product development and cash flow of Synopsys, Mentor and Cadence — are expected to consolidate over the near term, and the revenue outlook from that market is being tempered.

But the “new verticals” — military, aerospace, IoT, cloud — offer the chance for the EDA titans to extend their reach by not only selling IC design software but also an ever-growing array of emulation, analysis, and system design tools to a single customer. Doing so tightens the binds between EDA firm and customer, potentially making the deal more profitable as some list price devaluation that naturally occurs with bundling is offset by a lower cost of sales (including commissions).

As Cadence CEO Lip-Bu Tan said this week, “We had been emphasizing system design development. That basis is providing the entire vertical solution spec that is from IT tool and PCB and a host of system design and verification and we strongly believe that is the strategy going forward to meet the requirement of some vertical (markets).

“IoT, the cloud infrastructure and the massive cloud infrastructure fueling up; the automotive as kind of the connective devices; some of the medical field and DNA sequencing … and a few others: those can be clear application for some of our IT portfolio and some of our EDA flow and also some of our hardware PCB and system analysis requirements.”

We are starting to hear the major EDA companies discuss the PCB segment on their quarterly conference calls. This is an emerging trend; not long ago PCB was an after-thought to most analysts because the revenues were so puny compared to those of semiconductor. Now that PCB is part of a larger strategy, as opposed to simply a (profitable) business unit, that’s changing.

As this strategy ramps, it could very well shift the scope of acquisitions by the major EDA players. For decades, Synopsys has stayed far away from owning PCB design tools  although some of its tools have been tied into Zuken’s. Its last foray into PCB came when it acquired Viewlogic in 1997; management quickly bought out the PCB design segment the next year. Would a shrinking semi customer base lure them back in?

Most PCB design M&A related deals these days are tied to filling gaps in technology. There’s still a disconnect between ECAD and MCAD, and there will be some shakeout as new disruptive hardware startups enter the field. So while Cadence and Mentor are pursuing true top-down strategies, not everyone is following suit.

Altium corporate director, technology partnerships and business development Dan Fernsebner told me at PCB West last month, “Incubators and hardware startups have to put products out very quickly, and they have to be right the first time.” Fernsebner says the model for these companies is shifting from enterprise engineering to relying on reference designs.

Does the change to entrepreneurship pose a challenge for the developers in terms of having to reevaluate their business models, I asked Fernsebner. “I think you’ll see explosive new companies changing the business model for those who have been in it for years,” he said, citing Telsa, Nest and Skully, companies that develop products that are field-upgradeable.

It’s rare that any single model wins out completely. But if the end-customers in key industries begin to flex their muscles, it won’t be long before the M&A activity gets really interesting.

PCB West Next Week

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I’d like to remind readers to register now for PCB West, the Silicon Valley’s largest trade show for printed circuit board design, fabrication and assembly.

The show takes place next week at the Santa Clara Convention Center. It includes a three-day technical conference, featuring nearly 70 presentations, which on average run more than 2 hours apiece. PCB West has always been different from other conferences in that regard. Founder (and UP Media Group president) Pete Waddell, a former designer himself, recognized that there was big hole where in-depth training for board designers should be. PCB West fills that hole.

The conference runs Sept. 15-17. There is also a trade show featuring more than 100 leading suppliers to the electronics industry on Sept. 16. The exhibits are free, and there will be a free lunch on the show floor, plus a happy hour starting at 5 pm.

The show also includes 11 free sessions covering everything from laminates to signal integrity to board assembly. We strongly encourage anyone involved in the electronics supply chain to stop in.

Visit pcbwest.com for more details and to register.

Platinum Deals Cost a Lot of Gold

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The silence, as they say, surrounding the pending Platinum Specialty Products acquisitions for OMG and now Alent, has been deafening.

Could it be because it’s summer, and people aren’t paying as close attention?

Could it be because that’s how the respective companies prefer it?

We receive announcements several times a week from various folks within Alent, but they haven’t said boo about the buyout. And the folks in the industry I’ve queried about it haven’t been quick to respond either, both on the Alpha and the Enthone sides.

Platinum is aggressively buying up companies in the solder and electroplating/finishing materials space, first having bid for OMG’s PCB chemicals unit (the former Electrochemicals) and now agreeing to terms for Alent, the former Cookson metals divisions which include Enthone and Alpha.

The aggregate price tag for the various units: $2.67 billion, including assumed debt.

That will add to the debt Platinum assumed when it acquired MacDermid in 2013 for $1.8 billion. The weight of these transactions is making folks inside and outside the industry a bit cautious, as this recent statement from Moody’s indicated.

Platinum paid nearly $40 million in interest in the first quarter alone, and its operating profit for the period was just $2.2 million. The additional acquisitions will further stress a balance sheet that carried $1.4 billion in debt as of Dec. 31.

Dan Leever, the man at the helm of Platinum following its buyout of MacDermid, knows the PCB industry inside and out, but it’s unclear to me how much further they can go before running into a Viasystems-like situation.

OMG and MacDermid? OMG!

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Not nearly enough attention is being paid to the pending acquisition of OMG’s electronic chemicals business by MacDermid’s parent company.

This deal will throw even more market share to MacDermid, and the big question becomes how will smaller fabs (i.e., the vast majority of the North American and European markets) handle it? Many of them already use one or the other, and will doubtlessly be affected by the merger. I can’t imagine they are looking forward to this.

 

CAD Software Pricing Wars Heat Up

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Another price/performance battle is heating up in PCB design software, and this time Altium could feel the burn.

Altium has experienced decent growth over the past few years, reaching about $75 million in annual sales. That’s not a huge sum compared to the Big Three of Mentor Graphics, Cadence and Zuken (subsequently referred to as MCZ), but it no doubt is getting the attention of the big boys, given the fairly modest pace of PCB design layout seat growth.

After dropping pricing on its signature Altium Designer tool from $14,000 to about $5,500 in 2008, Altium then raised them more than 30% a year ago this month, with some reports indicating even larger spikes, plus support.

Mentor today fired a big shot across the bow, pricing its newly configured shrink-wrap Pads suite at an entry level  price of $5,000, including a year of support. A mid-range version is priced at $10,000, in line with Designer once support is factored in.

Mentor made its move to target so-called independent users, those who may work for corporations but have the latitude to go outside the enterprise CAD system for their tools. That sector is characterized by engineering generalists who look for lower seat costs and aren’t driven by the particular tool. Will Altium counter move, or will it take a chance that it can wait out its deeper-pocketed competitor, hoping that Mentor lacks the patience to withstand the margin pain?

No matter how this plays out, a company can only grow so large in the shrink-wrap space. Enterprise is where the big bucks come from, and that space is dominated by MCZ. And that next move is Altium’s.

 

 

 

Fewer Reports Not in Altium’s Best Interest

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Always a company that operates behind a veil of mystique, Altium will take that secrecy to a new level with its latest board decision which pares its quarterly earnings reports to semiannual announcements.

In a statement today, the PCB design software company said the decision came about following an investor roadshow in Sydney and Melbourne in February, where management pitched the notion that the quarterly reports somehow — and I’m reading between the lines here — distorting and negatively affecting the market perception by obscuring the “steady annual growth delivered by Altium” over past years.

“The overwhelming view of the investor community was that Altium has reached a level of maturity that allows it to focus on driving its business and, consistent with market practice, provide full year and half year reporting,” the company said.

OK, then.

The great thing about quarterly reports is that they force a company to be upfront with investors on a regular basis. Dial that back, and investors are going to make decisions based on data that are often less clear. I’ll be surprised if there’s any mass selling, given that many of Altium’s major shareholders are insiders, with current CEO Aram Mirkazemi holding about 9% of the company directly and more than 11% through holding companies, with the board holding more than 20% of the shares overall. But I suspect they will have a more difficult time attracting institutional investors.

Altium has set as a goal $100 million in annual revenue by fiscal 2017. It’s at an annual run rate of about $75 million right now. As companies get bigger, they need to keep in mind that their responsibility to their investors grows as well. We’ve been supporters of Altium’s unconventionality in the past, including the move to Shanghai, which some predicted would be the death-knell of the company. If anything, Altium has been very willing to think out-of-the-box, to its benefit. Reducing its earning reports is an ill-advised decision, however.