Tag Archives: PCB

The End of the Viasystems Era

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At long last, the hunter became the hunted.

TTM Technologies today announced its pending acquisition of Viasystems. The deal, expected to close in early 2015, will vault TTM to second place among the world’s largest PCB fabricators.

No matter how the deal turns out for TTM, Viasystems will remain one of the most talked about PCB companies in the industry’s history, held in awe for its audacity and blamed on multiple continents for nearly single-handedly devastating local supply chains.

For the entirety of its 18 years, Viasystems was worth 10 times its revenue in industry controversy and chatter. It sprung on the scene in fall 1996, the brainchild of New York investment firm Hicks, Muse, which in quick order bought up AT&T’s board shop in Virginia, Circo Craft, Kalex, Forward Group, ISL, Mommers and Zinocelere, plus several EMS and peripheral businesses. They were the Yankees of the PCB world, albeit without the same level of success.

Then came the Tech Recession of 2001, and Viasystems’ debt ballooned to over $1 billion. Two Chapter 11 restructurings and countless lawsuits later, the company stabilized and managed to spend the better part of the rest of the decade simply managing the business.

In 2010 the veil was lifted. Viasystems resumed its buying ways, snatching up Merix and then, two years later acquiring DDi (which in turn had gobbled up Coretec). Yet consolidation didn’t bring happiness. Over the years Viasystems found it nearly impossible to turn a consistent profit. Debt, a persistent problem dating to its Hicks, Muse days, now sits at $561 million.

TTM is getting Viasystems for $16.46 per share, or about 6.8 times adjusted EBITDA. You tell me if that’s worth it.

I would expect TTM will sell off Viasystems’ wire harness business, which is small ($174.6 million in 2013) relative to the rest of the business and has shown operating losses in five of the past seven quarters. Viasystems has already consolidated its China manufacturing base, so I would not expect much change there. TTM is running at 75% capacity in China but only 60% in North America. TTM has seven sites in North America and Viasystems has nine, including a combined three in the Silicon Valley and two in Orange County. Perhaps they will seek to consolidate here in order to boost rates.

Viasystems changed the way the world viewed the industry. It forced Wall Street to take notice. It laid waste to the regional landscape, ultimately closing millions of sq. ft. of some of the once-best shops in the world. Some will say this was inevitable. Viasystems bought plants that were obsolete or quickly headed that way, whose workforces could not change even while the technology was quickly shifting away from them. And the firm tied up enormous amounts of capital in dubious debt deals that may have enriched a few but certainly did not leave their business units with the balance sheets necessary to operate in such a cyclical market.

There’s still time for the deal to fall through, and it took about 18 seconds before shareholder lawsuits began piling up. No matter what happens on the ground, come next spring, Viasystems will again occupy the rarest air of the PCB world. It just won’t be as Viasystems.

Hitachi’s SMT Exit

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And then there were … 27?

Hitachi’s board today announced plans to exit the SMT component placement business, selling off certain parts of the division and closing the rest. In a press release, the firm said it would transfer the sales organization to Yamaha and cease its development and manufacturing activities.

Japan has always been the major provider of the world’s component mounters, headed such major conglomerates as Fuji, Yamaha, Juki, Sony and Panasonic. And while Hitachi’s competitors will welcome one fewer player in the market, this in all likelihood won’t shake up the industry.

Over the years it’s been widely assumed consolidation was inevitable, yet it’s taken more than a decade since the Great Tech Recession of 2001-03 for any major moves to be made.

There have been several transactions and reshufflings, of course: ASM bought Siplace (Siemens), Universal was acquired by a private equity group, as was Assembleon. Mydata was acquired by a fellow Swedish OEM. And earlier this week Dima, a small European player, was snatched up by Nordson. None of these deals has truly changed the shape of the market.

In fact, the June 2013 merger of Juki and Sony was the first major deal in which a serious player ceased to exist. Hitachi’s will be the second.

The 27 (at least) remaining players will welcome the chance to grab Hitachi’s roughly $68 million in equipment sales now in play as result of this decision. Someone’s bottom line will look at least marginally better in the coming year. But more moves will be needed before the SMT market can truly regain the types of margins needed to inspire significant commitments to innovation that were standard fare in the 1990s.

 

 

 

End of Summer — End of an Era?

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Which is the way forward? New or renew?

Nepcon in Shenzhen Aug. 26-28 was “OK” in terms of attendance. Lots of prospects/”tire kickers” but very few buyers.

Japan’s high-tech PWB volume in June increased  8.6% over that of June 2013, but revenue declined 4.1% for domestic build-up types of multilayers — a typical sign of declining business, a maturing industry, cheaper foreign sources, and overcapacity. According to DKN Research, prices for these types of circuits used in cellular phones dropped 12% in Japan during the past year.

Japan manufacturers are also engaged in a price war with Taiwanese and Chinese competitors with double-sided and multilayer flexible circuits. Selling prices on these dropped more than 33% in the past year. Overall, the forecast for the Japanese circuit industry for 2014 is not better than 2013’s, which was the worst since 2008.

The world’s top 100 printed circuit makers account for approximately 80% of global demand.

Nothing is forever. The interconnect industry (PCB and PCBA) has had a good run and matured. It has progressed technically, shifted geographically, consolidated, thrived and suffered due to geopolitical shifts as well as technical advances. Some well-known domestic companies are undergoing inversions. Others are shrinking or struggling to regain a profitable (albeit smaller) status after squeezing suppliers, inventories and eliminating much of the R&D funding for future improvements. Renewing appears to be more difficult as competition for “more of the same” continues to increase and value differentiation declines. In fact, some of the cost reduction activities have actually removed value from many of the offerings making them less attractive in the long run.

Change is inevitable! We can contribute to it or be the “victims” of it. We can invest in the future or have no future. We believe that today’s survivors that are experiencing declining options for their current offerings must seek out new directions, new alliances, new wares, new  cooperative development activities and support for the future.

Opportunities do exist! 3D packaging has stalled due to both economic and technology issues. Mitsubishi Heavy Industry has started a new room temperature wafer bonding service for MEMs and biosensors for firms designing 3D packages and are unable to make them themselves. 2.5D appears to not be faring much better. New improvements in packaging appear to be filling some of the current needs and gaps. We can extend product life cycles with product/process improvements while developing new disruptive or not-in-kind technologies.

New flexible substrates with 14 micron thin cores and 9 micron Cu surfaces provide the reality of 25 micron line and space volume production and, along with new technologies, the opportunity of PCB and IC substrate makers, and their supply chains to work more closely with the packaging industry.

Future success will require a total reassessment of your company’s core values, mission statement and goals. It takes a new strategy and action plan. It will require you to question your managements’ styles. Procedures will have to be reviewed, too. Why were these established? Are they still needed? Should they be modified to meet today’s Lean manufacturing needs and technology requirements? Do they support speed to market? Should you change or create new areas of focus? Do all your managers feel the urgency?

What are you doing to ensure your future?

New cooperative activity. The newly established liaison between the IPC and the International Electrotechnical Commission’s (IEC’s) Standardization Management Board (SMB) should be a boon for the rapidly growing printed electronics industry. All concerned parties have something to contribute and something to gain from this collaboration to create international standards. One must, however, keep an open mind for new potentially disruptive technologies that could potentially bridge some applications of the areas encompassed by printed electronics, printed circuits, and other packages.

It’s time to get serious. The Taiwan Printed Circuit Association (TPCA) has asked for government support to help Taiwan’s PCB industry develop next-generation products to counter slowing growth rates. The nation’s industry (including output from its factories in Mainland China) will generate sales of $18.3+ billion this year. The TPCA is likely to receive a good audience from the government as the nation’s vice president has been a keynote speaker at the annual TPCA show’s opening ceremony the past few years.

Shortly after announcing a new $30 million share repurchase program this month Plexus held an opening ceremony for its $40 million 265,000 sq. ft. manufacturing facility in Guadalajara, Mexico. The company has stated that it is now actively recruiting to fill employment opportunities. Full employment at this facility is expected to exceed 700 workers.

The increasing costs in China and elsewhere, the stability and availability of a skilled and semi-skilled work force, locally established supply chains, and the proximity of five universities are all sure to have contributed to the decision.

SEMI announced another positive book-to-bill IC equipment order ratio for the month of July. Where will the equipment go? What types of chips with what nodes will it build? What industries will consume the added production? When will the PCB/packaging industries partake in the results?

Who is building the packaging substrates and where are they built? Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, yesterday said its revenue hit a record high $2.16 billion last month up 7.6% from June and 24.6% higher than a year earlier. The company also forecast a sequential revenue increase next quarter because of its strength in 28nm and 20nm process technologies as well as strong demand for flat panel IC drivers and tablet power management chips.

United Microelectronics Corp. (UMC), Taiwan’s second-largest contract chipmaker, posted its lowest revenue in three months last month, down 7% to $380 million due to lower contribution from its solar business.

Conversations with several major circuit interconnect and packaging supply chain members in Singapore, Hong Kong, China and Japan indicate that business is “spotty” at best. KCE in Thailand is having record sales participating in circuits for the automotive after market, now the 2nd biggest in Asia. Unimicron Technology’s second quarter net profits were up 377% from the previous quarter to $9 million. Gold Circuit Electronics and M-Flex are still working to restore profitability. Viasystems lost money the second quarter of the year. The second half of 2014 looks promising for Taiwan-based circuit makers. Global Innovation has restored its Lone Star name with a statement that it will only provide domestically produced circuit boards.

SEMI has forecast double-digit growth for equipment makers for the next two years. What will the applications be? Will Intel’s new 14nm node be part of the surge, or will the cost/benefit ratio not be good enough? How much of an effect will “wearable electronics” have?Which substrate/board builders will benefit? When? Where?

Samsung’s smartphone market position in China has been supplanted by Xiaomi  and in India by “home-grown” Micromax in the 2nd quarter of 2014. The latter is offering a 6-inch screen with magnetic flip cover, 1.3 GHz dual-core Media Tek processor, and an Android 4.2.2 Jelly Bean operating system with a 5-megapixel camera and a 6-month movie subscription for $140 (8,500 rupees)!

How is your crystal ball? Are you monitoring and re-evaluating your attainable markets and shares? Are you redefining your businesses? have you found creative ways of extending product life cycles? Are you noting major shifts in supply chains and aligning your companies with the king (or prince) makers of the next few years? Are you redefining your markets and stepping “outside” the traditional boxes? If not, I suggest (re)reading Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne (2005, Harvard Business School Publishing, 2005).

As a supporting organization of the China Sourcing Fair Fall 2014, Electronics & Components, to be held on October 11-14, 2014 at AsiaWorld-Expo, at the Hong Kong Airport, the HKPCA is offering its members VIP Buyers’* privileges to this Fair.  These include:
– Free admission to the fair;
– Free transportation arrangements to the fairs;
– Coupons for F&B & shopping discounts at the Hong Kong International Airport area and AsiaWorld-Expo;
Exclusive use of onsite office suites to its invited VIP buyers (Wifi connection, office equipment, etc);
– A free Octopus Cash Card with HK$150 stored-value for transportation or purchases.

 

Looking Forward

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The Taiwan Printed Circuit Association (TPCA) announced at a press conference attended by nearly 100 members of the government, industry, research institutes, academia and the media that it will publish a white paper in September to address the future Taiwan PCB industry challenges – both in Taiwan as well as China. It will take on production constraints, labor shortages (including skilled and semi-skilled), and end-of-market changes.

TPCA is calling for its government to lead the country’s PCB industry to develop next-generation products and to promote (sponsor?) industry upgrades. Taiwan’s PCB makers have lost its momentum and are likely to generate a CAGR of only 1.2% in the 2010-2014 period. The targeted goal for 2014-2020 was said to be 6% to 7%. Sales of Taiwan owned production at home and abroad (including China) is forecast to be $18.3 billion this year.

Dateline July 23, 2014 5:40PM EST: It is with great sadness and deep regret that I must inform you of the passing this morning of Dieter Bergman, Global Industry Icon of the printed circuit industry, colleague, and friend of the past half century. He worked selflessly and tirelessly with great charm and wit his entire life in behalf of the industry, enabling the impossible to become the possible. The accolades that are sure to follow will be dwarfed by his actual accomplishments.

Do Not Penalize! – Motivate! Incentivize! Negotiate!  License!
Renewable energy is the way of the future. Make no mistake about it. Achieving a cost-effective path is the challenge. Slamming China and Taiwan with enormous duties on assembled solar PV panels shipped to the US is the wrong approach. We should be grateful for the support of China’s  and Taiwan’s governments to their industry that allows us to buy them cheaply. The whole industry is based on government subsidies. The net effect of this new DOC action is to increase prices to the American consumer. The  US government has thrown away hundreds of millions of dollars by investing in unproven, doomed-to-fail companies during the past few years. It should have been providing job creating tax incentives for the manufacture of such panels in America.

Let’s see if the USA will be the first to commercialize (in high volume) the very efficient multi-juncture PV solar panel technology shown at the recent SemiCon West in San Francisco.

Wake up America! It has been 5 years since we have been the world’s leading innovator!

Report: The United States not even close to being top global innovator. By Pam Tobey July 23 at 5:39 AM – Source: The Washington Post

Switzerland is a four-time champ when it comes to global innovation. The United States? Not so much lately — the country last achieved that spot in 2009. The United Kingdom jumped ahead of Sweden to claim the No. 2 spot behind Switzerland in the recently released Global Innovation Index 2014, put out jointly by the business school INSEAD, the World Intellectual Property Organization and Cornell University. The index covers many variables that contribute to innovation, including institutions, human capital and research, infrastructure, market and business sophistication, knowledge and technology and creativity. It gathers data for 81 different indicators in 143 economies to come up with rankings. In 2007, the United States was at the top of the list. In 2010, it plummeted to 11th place, partially due to the battering of the economy by the financial crisis. Among the regions in the report, Europe holds the top spot, followed by North America.

 

Does Rising Nationalism Pose Threat to Electronics Supply Chain?

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The amount of geopolitical discord around the world at present is stunning: Thailand, Vietnam, Korea and other major electronics manufacturing hubs are seeing a rise in nationalism and severe internal tension over how to address foreign pressure.

Thailand in May endured yet another military coup — its 19th since declaring independence from its monarchy in 1932. Some observers feel the military wants a permanent seat in the national parliament, a move that could hinder its democratic movement.

In Vietnam, citizens are outraged at what it feels is Chinese strong-arm tactics. Its Northern neighbor has provoked many Southeastern nations over the past few years, often by occupying seaborne territory that others had staked claims to in the past. (The Philippines have a similar complaint dating to 2012, when China evicted Philippine fishermen from their long-held fishing grounds.) Lately, Chinese oil rigs took up in Vietnamese waters, leading to riots at Fittec, Foxconn and elsewhere, where domestic workers took aim at their Chinese* employers.

Korea is losing business to Vietnam, aided in part by its own OEMs: Korea is now the largest investor there, pumping in nearly 23% of all outside investments in the first quarter this year. As Samsung relocates its cellphone manufacturing there, Vietnam is on track to produce 250 million handsets this year, versus 200 million in China and just 30 million in South Korea. As the linked article indicates, as of March 2014, Samsung Electronics subcontractors had invested an aggregate $2 billion in Vietnam. Meanwhile, while Samsung buys a reported 53% of its parts from Japan, South Koreans now view Japan as their second-leading military threat, next to North Korea, and resentment from World War II is rising once again.

Indonesia is suffering through a contested presidential election, one that involves an ex-general and the possibility of an overturned ballot result.

Japan, my friend Dr. Hayao Nakahara tells me, has essentially stopped investing in new manufacturing sites in China, with the only new developments minor capacity add-ons to existing plants. The two nations have been at odds over everything from possession of uninhabited islands in the East China Sea to a rehashing of wartime atrocities.

Southeast Asia is home to the bulk of the world’s electronics production, and holds the majority share of products built for the consumer, industrial/instrumentation, telecommunications, PC and peripherals end-markets (not to mention the vast majority of the raw materials and components supply). We’ve absorbed several of nature’s bullets of late — flooding in Thailand, the typhoon in Malaysia and of course the 2011 earthquake and subsequent tsunami in Japan. I am told that the media reports have exaggerated what’s happening on the ground in Southeast Asia, and that on a day-to-day basis little dissent is noticeable. That may be true, and to be sure, the self-inflicted disruptions have thus far been held to a minimum. Given the number of countries involved — unprecedented in recent times — and the enormity of what’s at stake, we can’t help but feel it will take some luck if the next supply-chain breakdown is only as bad than the last.

*Fittec is based in Hong Kong, Foxconn in Taiwan, but most employees and manufacturing for both companies are in China.

PCB Panel Routing Technique

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Most PCBs we receive are individually routed; i.e., not panelized. That doesn’t mean that, sometimes, sending them in a panel isn’t a good idea, or required. Generally, we don’t require panels (sometimes called a pallet), but there are some cases when we do.

V-score panelIf the individual PCB destined for Full Proto service is smaller than 0.75″ x 0.75″, it needs to be panelized. If a PCB needing Short Run production service is less than 16 sq. in., it needs to be in a panel of at least 16 square inches to qualify for Short Run.

So, you ask, why else might I want to panelize my PCBs? Keep reading and I’ll tell you why.

  • First, if you’ve got a lot of small boards, it’s easier to handle and protect then when they’re in a panel. A few panels can be more safely packed coming and going from our shop here.
  • You may be able to get the through our factory faster. If you have a really large number, and need them super fast, panelizing them may enable that fast turn. With a lot of boards, sometimes, it simply isn’t physically possible to put them all on the machine, run them and take them off, in a short turn time. Panelize them and the machine will be running longer for each board change, which reduces the total run time.
  • It may also cost you less. If you use leadless parts like BGAs, QFNs or LGAs, you can usually reduce your cost a bit by panelizing the boards. Leadless parts cost a little extra because of the X-Ray test needed, but the extra handling is mostly per board, rather than per part. One panel of ten boards with ten BGA, in total, will cost a little less than ten individual boards with one BGA each.

Stay tuned for my next few posts where I’ll cover the pluses and minuses of different panelization techniques.

Duane Benson
“I looked outside my window and what do you think I saw?
The strangest sight I’ve ever seen you’ll never guess just what I mean,
I can’t believe it myself“

Component Packages — Let’s Get Small

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I’ve been on a bit of a package binge lately. First talking about metric vs. US passive sizes, and then a very tiny ARM Cortex M0 from Freescale.

The Freescale BGA part checks in at 1.6 x 2mm. That’s cool and I’m almost always in favor of making things as small as possible, but, as I wrote in my prior blog on the subject, it’s not always possible. The 0.4mm pitch BGA is problematic unless you can spend a lot of money on the raw PCBs, or will have super high volume.

All is not lost, though. You still can use a tiny ARM Cortex M0 part. Just not quite as tiny. That same part also comes in a 3 x 3mm QFN package. You lose four pins (16 vs. 20) going from the BGA to the QFN, but if you can handle that, it’s a very viable option that doesn’t require any exotic circuit board technologies.

A few years ago QFNs were scary, but not so much any more. I’ve designed a few of them in using Eagle CAD. Just be sure to pay attention to the footprint. A 6 mil trace is more than small enough for a 0.5mm pitch QFN.

Duane Benson
Strive at all times to bend, fold, spindle and mutilate

http://blog.screamingcircuits.com/

Open The Pod Bay Doors, HASL

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Does anyone use HASL (hot air surface leveling) anymore? It’s also known as HAL.

Prior to the RoHS days, HASL was probably the most common surface finish. You can get it lead-free, but most boards seem to use immersion silver or ENIG (electroless nickel immersion gold). HASL has traditionally come at a lower cost than those other two finishes, but immersion silver can generally be found at the same price now.

Our friends at Sunstone.com, for example, charge the same for silver and tin/lead HASL. ENIG is still more expensive no matter where you go, though.

One of the chief disadvantages of HASL these days, is the lack of planarity on the surface. (Note the bumps on the BGA land pattern in the image on the right.) With through-hole or large components, an uneven surface doesn’t matter so much. With the increasingly smaller BGAs and QFNs, however, surface irregularities can cause big problems.

Both immersion silver and ENIG have nice flat surfaces. OSP (organic surface preservative) has a pretty flat surface too, but it’s not used much except in high volume consumer goods or specialized applications.

Duane Benson
Oh, the pain! Save me, William.

http://blog.screamingcircuits.com/

Changing Times

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Many name brands are now gone, never to return.* Others have been sold off (merged into others) and will be bled for opportunistic sales. Their product ranges included dry film photo resist, drilling machines (laser and mechanical), phototool generators, test and inspection equipment, plating solutions and additives (electroless and electrolytic), etching solutions, solder masks, SMT assembly systems, OSPs, and more.

A number of new promising product innovations have not gained traction and may be doomed. Why? Can they be saved? Should they be? How? Is poor time-to-market the cause? Is failure to listen to customers and prospects the cause? Is myopia the cause? Is the lack of focus the root of deferred results? Is failure to seek help (advice? JV?) the problem? Are the products/services not ready for prime time? Does belief overshadow reality? How big is the realizable potential? Where is it? Do they meet customer needs? How should the wares be sold? Should they have been abandoned? How should after-sales service be provided? Will they be lost in the rush to increased board and SMT demand later in 2014? Who is the competition? What role does pricing play? Do they have not-in-kind competition? What can be done to salvage the project in 2014? What should be done?

What new products/services do you believe are needed for 2014-2015-2016?

Stay tuned! We will address these and other issues in “Weiner’s World” in 2014.

As I was reflecting over the relatively poor overall circuit board industry performance of the past two years, my mind wandered back a little more than a quarter of a century ago to 1987 when I gave Shanghai Mayor Ziang Zemin** (and former Electronics Minister of the PRC) a tour of a simulated surface mount production line at the first NEPCON show in Shanghai, China. At that time the circuit board industry there was literally in its infancy. It is difficult to believe that China, in such a short period, has become the world’s leading production site of PWBs. It has become the location of choice for manufacturing boards for the major Taiwan producers. It has become a major source for Japanese and Taiwan firms, too.

The International Printed Circuit & APEX South China Fair, with more than 1,900 booths already sold for its next production, has become the largest show for our industry in Asia.

Specialty chemicals and advanced laminates for the interconnect industry are now produced in China. Manufacturing equipment of increasing competitive quality levels for board fabrication, test, and assembly is made there. China branded vehicles and electronic devices are emerging at a rapid rate with an eye on the domestic market as well as for export.

The $64 questions are: What will the next 5 years bring? How will the other “developed” countries compete? On what basis? Who will fund next-gen products and processes? Will only the “giant” operations succeed? Will new businesses have to really focus on — and be satisfied with — profitable niche markets? Will product life cycles be long enough to justify their development costs? Will new types of partnerships be needed to succeed? Will smaller, lighter, faster boards and devices lead to shorter product life and early obsolescence?

I believe that IC and display demand will increase strongly in the first half along with assembly orders. Board production will feel an upsurge in the second half of 2014 with HDI and rigid-flex boards leading the way.

I liked the theme of next year’s (December 3-5, 2014) International Printed Circuit & APEX South China Fair “Innovation Through Resilience” but wonder if the reverse, “Resilience Through Innovation,” might not be better.

The Japanese yen slid to its lowest level, 104 yen/dollar in almost 7 months. I remember 300+ yen/dollar on my first visit to Japan in the early 70s to present a paper at the first NEPCON Japan event.

… and yet, there is a feeling of déjà vu

Japanese electronics companies are not reaping any benefits from the weaker yen. They have slowly outsourced most of their manufacturing needs to China and other Asian countries over the last two decades. It is extremely difficult to flip the switch and return manufacturing to Japan (or America). According to DKN Research, printed circuit manufacturers are in the same boat, and remain pessimistic about future market trends.

Direct imaging is moving towards becoming “the standard” for primary imaging with a shift from laser to LED in the works. More than 400 of these systems are reported to be in use. Direct imaging of solder mask will expand as photoimageable products requiring less energy to expose are brought to market in 2014. HDI continues to come on strong and should grow 15-18% in the region next year even though the overall outlook is for a soft first half. The use of advanced high tech laminates continues to increase. Greater interest in the employment of robots for SMT manufacturing is developing to counter the continued annual wage increases mandated by the Chinese government. Automotive electronics remains strong. The Shenzhen police department has started to use all electric vehicles (from BYD) with roof-top video cameras and lighting.

We expect the purse strings for capital equipment acquisition to be loosened after April. All are awaiting to see what he required minimum wage increase will be next year. The “new” government is also reported to be signaling that it is increasing its battle against corruption and waste with a new guideline to prevent government officials from using 5-star hotels in 2014. We note that manufacturing companies in China are taxed even though they may have losses.

The island political situation continues to cause some disruption in electronic equipment businesses between Japan and China. Taiwan has now asserted its claim to the barren islands under territorial dispute between Japan and China. North Korea has followed China’s lead and expanded the sea area over which it claims protective rights. We believe that a new wave of emigration from Hong Kong to Vancouver is in the process of starting as young educated families have decided that it is a “better place to live.”

The Hong Kong government has apparently decided to “give” $100 million to poor people (up to $10,000 each) sparking a series of protests (including a column in the HKPCA journal) stating how the money could be better spent on education, food, facilities, technology, job creation, etc.

*An Italian company bought the former Dynachem logo and trademark “Laminar.”

**Ziang Zemin was named President of the People’s Republic of China (PRC) in June 1989.

Public Data

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I was pleasantly surprised this morning to receive a note from IPC indicating a change to its data collection methods.

In an announcement touting its new market research subscription series, IPC said it would use aggregate company data along with “carefully vetted secondary research.”

That sounded like IPC would now use data from the publicly traded EMS companies to help flesh out numbers its participating members report. A quick inquiry to IPC director of market research Sharon Starr confirmed as much.

“The growth rates reported each month will be based on IPC’s survey sample, but we will be looking at published data from the publicly traded EMS companies as a cross-check and may also use this data in our market-size calculations. If growth rates from the publicly-traded companies differ significantly from what our survey participants are telling us, we will address that in the reports,” Sharon told me.

This represents a departure from the past 20 years, where IPC would rely only on the data directly reported by survey participants. For years, report after report showing various manufacturers’ monthly sales numbers would arrive on an unsecure fax machine in the IPC office. Eventually, that fax was moved to someone’s office, but there was little in the way of confidentiality offered, and even if the the reporting company used a unique code, its name on the top of the fax always gave it away. As companies went public and disclosures became more scrutinized, there was a real disincentive for manufacturers to submit monthly data. Over the years, this trend undermined the usefulness of the IPC data: if larger companies weren’t reporting, were the figures as published truly representative?

Parsing the publicly traded firm’s quarterly numbers will go a long way toward ensuring that the data reflect the macro industry trends.