Tag Archives: Multek

Brazilian Blowup?

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Which way is Brazil headed?

It looked up, after Foxconn decided to invest — how much is the subject of much speculation, as one report pegs it at about $500 million, another at as much as $12 billion — in new manufacturing campuses in São Paulo and elsewhere.

But Multek recently bailed, leaving the country without its largest bare board fabricator, and now Benchmark is leaving too, citing customers that were “challenged by some of the regulation challenges there.”

Brazil has eased some of its notoriously rigid (and expense) laws that taxed imports, rules designed at essentially forcing companies to build their supply chains inside the nation. It’s a tremendous potential market, with nearly 200 million residents. A few companies leaving isn’t necessarily a trend. But the flow always starts with a trickle.

 

 

 

Why DfM?

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Design for manufacture is the practice of designing board products that can be produced in a cost-effective manner using existing manufacturing processes and equipment. — Ray Prasad

I’ve mentioned before that one of my early design gurus gave me a piece of advice that stayed with me throughout my design career. He said that after I finished a drawing or design, I should stand back and ask myself if I could build the product from the information I was providing. Well, to do that I had to know how the product would be built and the processes involved in manufacturing the product. Fortunately I was raised in a fabrication environment and had a fair knowledge of metal fabrication.

But when I started designing PCBs, I didn’t have the luxury of being around a PCB fab shop, where I could spend time with people who built the boards. I had to depend on other designers who had a wealth of knowledge about PCB fabrication.

Several years later, I worked for a couple companies that not only did design work but also had a board shop. Any time I had a question about something, I could walk over to the board shop and get some on-the-job schooling. The folks there would not only tell me what I needed to do to make the job more manufacturable, they’d walk me down the line and show me the whats and whys. I can’t help but think that this made me a better designer. I know that it gave me a better understanding of how the things that I was doing in a design affected every step and downstream process.

Over the years since I became involved in the magazine and conference side of PCBs, I’ve stressed the importance of DfM and the manufacturing process. We made it a significant part of the message and information in everything we produced, including the magazine, conferences and in later years, our websites. But DfM is still one of the major issues in the PCB design world. With the compartmentalization and outsourcing common today, it may be more difficult to get out to the board shop that builds our boards.

However, it is doable. Even when – for whatever reason – it isn’t feasible, designers and engineers need to know everything possible about board fabrication and assembly. So we keep running articles in the magazine and doing sessions at PCB West on DfM. We’re also working on some in-depth DFM courses for Printed Circuit University (PCU). In fact, we just loaded a video on PCU called Why DFM? that is available to all PCU members. (Membership is free.) In the video, Darren Hitchcock of Multek talks about some basic issues about which every designer should know. It is just a part of our effort to get every designer educated on DfM and other subjects relating to PCBs. Visit PCU today to see for yourself.

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Summer Doldrums

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Is it cyclicality, or … ?

Many reports, anecdotal and evidentiary, point to a general slowing in PCB production and sales over the past quarter.

Yet there are some reasons for optimism:

I am of the mindset that what we are seeing is a return to cyclicality after roughly two years of recession followed by a year-plus of bottled-up demand. Clearly there’s some market turbulence ahead, especially when we take the macro vectors into account. Some of the end-markets need a boost: Now that Windows 7 has taken over, PCs are stagnant, with new tablet demand offset by rather humdrum desktop/laptop interest coupled with some migration to smartphones. Nokia and RIM are skidding, and Apple can’t make up for everyone’s lack of flair. Autos are a big-ticket item and many consumers today need stronger feelings of job security before taking on new debt.

A forecast slowdown in US defense spending (the nation’s fiscal year starts in October) could be partially offset by new deliveries of jumbo passenger jets (Boeing last month announced a record single order and will ship its first Dreamliner next month).

The tea leaves are murky. We hope for the best.

Good Times, Bad Times

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Major printed circuit board fabricators are beginning to report their quarterly earnings, and the figures give some reason for concern.

By all accounts, 2010 was a banner year for PCBs in all regions. Sales were up 34% year-over-year in Germany through October, 18% in North America through November, and at least 10% overall worldwide. TTM and M-Flex, among others, are reporting record sales. DDi beat the pack to the recovery and has continued to spike.

But while the specialists are doing great, not all is well.

While Multek, a top 5 PCB provider, grew in the low-double digits sequentially, profits are scarcer, with the company saying the unit won’t be breakeven until the end of the current quarter (and that assumes the no dip in orders). Sanmina experienced problems in one of its factories (rumored to be Kuching, Malaysia) that sucked the margin out of what should be one of its more profitable businesses.

And that’s my concern: Even during a period where demand peaked, the largest players are still not consistently profitable. Based on experience, when the market slows, that means more factory closures or continued losses, or both. Another likely response is dropping their drawers on pricing, a move that inevitably ripples through the broader market.

Twenty years (!) in the PCB market has taught me this: If you can’t make a profit in an up market, you can’t make one in a down market.

There’s only one way to resolve this conundrum. The capacity increases have to stop. Let the factories remain full for a few years. Push back on OEMs that constantly demand price reductions with little regard for rising commodity prices and currency fluctuations. Try working together as an industry on this.

On the Cover

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The lead feature in the November issue of PCD&F is an interview with Multek President Werner Widmann. The interview was conducted by Circuits Assembly editor-in-chief Mike Buetow.

Take a look and tell us what you think.