January 2018

 

The year started of strongly with high hopes, optimism, orders and the promise of new facilities in the U.S. and China. Paced by a number of breakthroughs, ranging from new chips for AI, to packaging materials and processes, to megamergers, sales of semiconductor and printed circuit equipment were strong around the world with the IC segment rising faster than the board/substrate segments. The need for new and modified standards to meet tougher reliability needs has become evident. The demand for skilled and semiskilled labor seems to be surging beyond supply even as the use of robots and cobots rapidly increases.

 

Consumer Electronics Show 2018 (CES) in Las Vegas set multiple new records and showed that there is no lack of innovation in our industry. More than 900 "start-up" companies joined another 3,000 exhibitors that occupied over 2.75 million square feet. Every conceivable electronic device seemed to be in evidence ranging from automotive electronics, miniature drones, AR, VR to robots and cobots.

 

NVIDIA CEO Jensen Huang revealed during his CES 2018 press event that the first samples of the Xavier processors, initially announced a little more than a year ago, are being delivered to customers this quarter.  Xavier will power the NVIDIA DRIVE software stack, now expanded to a trio of AI platforms covering every aspect of the experience inside next-generation automobiles. With more than 9 billion transistors, Xavier is the most complex system on a chip ever created, representing the work of more than 2,000 NVIDIA engineers over a four-year period, and an investment of $2 billion in research and development.

 

It’s built around a custom 8-core CPU, a new 512-core Volta GPU, a new deep learning accelerator, new computer vision accelerators and new 8K HDR video processors. While the technical details are complex, the story is simple: DRIVE Xavier puts more processing power to work using less energy, delivering 30 trillion operations per second while consuming just 30 watts.

 

Huang announced that the company is now working with over 320 partners on autonomous vehicles, including new agreements with key global players. At the focal point of these collaborations is the new Xavier autonomous machine processor. This is the most complex and powerful SoC ever created. Xavier will be available to select partners over the next few months, about a year after it was first announced.

 

"Building a computer for autonomous vehicles is of a level of complexity the world has never known. This computer is on all the time, monitoring all of the sensors that are coming at it—it can never fail, it can never fail, because lives are at stake,” Huang said. “And it has to make the right decision, running software the world has never known how to write.”

 

More than a third of the exhibitors at CES were from China, including 482 exhibitors from Shenzhen alone. Americans only outnumbered China’s 1,551 exhibitors by about 50 companies. Chinese startups, especially makers of autonomous and electric vehicles, were in great evidence.

 

Nanjing-based Byton, unveiled a $45,000 electric concept SUV at the event. Termed a Smart Intuitive Vehicle, it featured facial recognition to unlock doors, gesture control and a 49-inch dashboard screen designed to increase productivity while commuting.

 

Dominique Numakura of DKN Research reported that more than 2,480 companies exhibited at NEPCON Japan 2018 this month. Automotive related technologies and electronics accounted for almost half the show.  A large number of companies in the categories of Robotics, Smart Manufacturing, and Wearable Electronics made their debut this year.  Participation was at an all-time high. Those that did not reserve space in time had to settle for the overflow space in lobbies and aisles that lead to the convention center.   Numakura said that the show was so packed that it was difficult to navigate from one booth to the next.

Like CES, it was impossible to visit every booth during the show. Booths that featured printed circuits and electronic packaging were spread out and not grouped together in the PWB or packaging zones. Some were found in the Robotics Zone, others in the Automobile Electronics Zone.  

There were more than 100 printed circuit manufacturers and related products exhibitors.  The major Japanese manufacturers included CMK, Meiko, and Denso. Mid-sized fabricator included Taiyo Industrial, Oki Cable, Oki PCB, P-ban.com, Raytech, and K2.   Major printed circuit manufacturers from Korea, Taiwan and Mainland China did not participate in the show. AT&S, the largest circuit manufacturer in Europe and KCE, the largest local circuit shop in Thailand reserved large sized booths.

 

Common theme topics with the PWB manufacturers included low cost multi-layer rigid/flex substrates for mobile equipment as well as elastic (expandable) circuits for wearable electronics.  New products are projected to have a spike in sales as new items begin to roll out in the medical device category and enhancements are made in scientific devices (finger print sensors).

 

Denso developed a series of MLB and flexible circuit manufacturing processes with LCP (liquid crystal polymer) resin for its trademarked PALAP boards. LCP resin was developed during the late 1990s, and after 20 years of promoting this, it has now reached volume levels. LCPs are low loss, low moisture resistant resins.

 

Several specialty chemical suppliers such as JCU, Okuno, and Japan Electroplating Engineers promoted new semi-additive processes for use with high density flexible circuits. The benchmark was a circuit with finer than 2 micron lines and spaces.

 

YAMAHA Fine Tech’s sales engineering staff stated that the quality requirement for fine via holes in fine flexible circuits has increased dramatically.  The traditional open/short test no longer meets customer requirements.  The new demand from flexible circuit manufacturers is to measure the conductive resistance of the via holes and eliminate half opened via holes. The latest automatic inspection machines can test 100% with high accuracy with good productivity. The new resistance inspection machines have now become standard in flexible circuit facilities. They are employed at the end of the manufacturing process for fine flexible circuits. Nowadays, the quality assurance required by the customers is approaching that of semiconductor IC devices.

 

At the end of his tour in the IC packaging zone, Numakura discovered a unique European company. Headquartered in Berlin, Germany, AEMtec manufactures custom packaging designs for small-volume based customers.  The company displayed special samples of packages based on COF (Chip-on-Flex). Bare semiconductor chips were mounted on high density flexible circuits employing different bonding technologies.  It looked very reliable and appealing, even though they have a large number of connections with small pitches. It is completely different from the packaging technologies for consumer electronics of which most of us are familiar.

 

Panasonic has developed a series of halogen free circuit board laminates for automotive radar systems. Designated R-5515, the new material has an ultra-low transmission loss with millimeter-wave antennae.  Panasonic has also commercialized a new series of aluminum hybrid capacitors for automobile applications that are reliable under severe vibration.

 

Graphene circuits

 

Researchers at Iowa State University, along with collaborators at Rice University, Ames Laboratory, and Lehigh University, have developed a new graphene printing technology to produce electronic circuits that are low-cost, flexible, highly conductive, and water repellent.

The researchers published a paper describing how the team used inkjet printing technology to create electric circuits on flexible materials. The ink is composed of flakes of graphene which must be processed after printing to remove non-conductive binders and “weld” the flakes together to boost conductivity and make them useful for electronics or sensors. The research group developed a rapid-pulse laser process that treats the graphene without damaging the printing surface – even if it’s paper. The process allows the fabrication of superhydrophobic graphene printed circuits.

 

China again

 

Shengyi Technology, China's largest copper clad laminate producer, reported that preliminary figures show its 2017 net profit to be up 43.6% at $169 milliion.

 

Chinese-owned companies are forecasted to lead the world in global IC fab investments, surpassing non-Chinese companies in construction spending last year and this year. 310 fabs are expected to be equipped in 2018.

 

China imported $182.8 billion worth of integrated circuits in 2017, up 13.5% over the previous year according to the China Semiconductor I China’s Ministry of Industry and Information Technology. At year-end the government announced a 3-year plan with the goal of being able to mass-produce neural-network processing chips by 2020.

 

Meanwhile, Tsinghua University’s Institute of Microelectronics announced the development of a new chip called Thinker designed to support neural networks. The new chip uses so little energy that just eight AAA batteries are enough to power it for a year.

Thinker can dynamically tailor its computing and memory requirements to meet the needs of the software being run. Many real-world AI applications, e.g., recognizing objects in images or understanding voice commands, require a combination of different kinds of neural networks with different numbers of layers. So far, Thinker has demonstrated its ability to do this.

 

IPC President of Asia, Dr. Philip Carmichael, said in a recent interview that what he sees coming next in China is having a high-reliability conference that's only focused on automotive or a high-reliability conference that's focused on aerospace and space technology.

 

Automotive electronics

 

LG Innotek, a materials and component making unit of the LG Group, said that it has developed an advanced flip-chip light emitting diode (LED) package with high lighting efficiency.

The advanced flip-chip LED package is an LED light source that is directly attached to a printed circuit board (PCB) substrate. It produces 220 lumens per watt (lm/W) stably even at temperatures between 250^o and 300^oC. It said the product is a result of nearly two years of research and 6,000 hours of intensive testing time.

The company states that the premium flip-chip LED package costs only half the price of products in the same category making it competitive to cheap Chinese rivals. LG has filed for 65 patents with related technology and plans to expand the flip-chip LED package technology to other lighting applications such as automotive lights and micro-LED displays.

 

Messe Muenchen India (MM India) and Indian Printed Circuits Association (IPCA) entered into an agreement to jointly organize IPCA Expo and co-locate the show with electronica India and productronica India, which are scheduled from September 26–28, 2018 at the Bangalore International Exhibition Centre (BIEC), Bengaluru. The initiative is intensely supported by the Electronics Industries Association of India (ELCINA). This alliance will bring together the state-of-the-art manufacturing technologies for manufacturing PCBs as well as the latest trends in PCBs from across the world.

 

Multek’s Global Business Services (GBS) team in Chennai, India received ISO/TS16949 Automotive quality accreditation. Multek is the only organization to have this certification across its entire GBS network worldwide. The ISO/TS16949 is a comprehensive Quality Management System that defines the foundation requirements of the Automotive industry for automotive parts manufacturers and suppliers for the design, development, production, installation and servicing of auto-related products.

 

Note the opinion of UP Media’s VP Mike Buetow on our Comments and Discussion page.

 

Westinghouse Electric, a faded industrial giant that once helped electrify the world but recently fell into bankruptcy because of bad bets building nuclear power plants, is being sold to Brookfield Business Partners, a Canadian conglomerate, in a deal valued at $4.6 billion. Brookfield is reported to be interested in expanding into servicing existing nuclear facilities and decommissioning aging plants. (Source; Wall Street Journal)

 

Westinghouse once had a major printed circuit facility at Friendship Airport (Baltimore) that became the first to use semi-aqueous dry film photoresist in volume production. It also marked a major first by industry notable and IPC Raymond E. Pritchard Hall of Fame member Dan Feinberg who says, "It was my first large account, one that I got from scratch."

 

Was this a result of Boeing's stated intention to bring many sub-contracted operations back in-house?

 

Rockwell Collins will be combined with UTC Aerospace Systems to create a new United Technologies business called Collins Aerospace Systems. The merger is expected to be completed by the third quarter of 2018.

 

February 2018

 

January's column elicited a few unusual complaints. Several readers wrote us stating that we did not raise sufficient issues or questions to stimulate thinking or action in our industry.  Let's start this month's column by stirring the pot a little with two quotations from a January 31 report in Semiconductor Engineering.

 

"Autonomous vehicles will result in a massive restructuring of entire segments of the global economy and create many new jobs-particularly for semiconductors and electronic systems."

 

And, it "... will precipitate one of the biggest disruptions in the history of business."

 

The IPC APEX EXPO event in San Diego was a “sell-out” with over 490 exhibitors. Attendance was up more than 10% over the previous year.  Traffic on the show floor was steady the first 2 days.

 

The mood was positive. Several companies, both domestic and foreign stated that they were having their best year ever! Others appeared to fear telling how good business was for fear of jinxing the current run up. These included virtually every category in the printed circuit and assembly supply chain. U.S. assembly equipment sales are up 30%. Platform's MacDermid Enthone unit saw an increase in metalization products of over 40% - primarily in greater China.

 

ATG was quoting August deliveries. Electra Polymers and Chemicals stated that their business continues to grow with 40% now in the semiconductor industry. Chemcut, with sales growing in all arenas from the U.S. to Asia, is quoting a 40 week delivery schedule. ASM’s backlog nearly doubled since the last quarter of 2017.

 

Shortages of skilled and semiskilled labor continue to grow. The IPC continued its focus on education and its outreach to students by bringing 70 STEM local high school students to the show to experience the excitement of Industry 4.0 manufacturing at the event.

 

The Taiwan Printed Circuit Association (TPCA) stated that worldwide PCB industry output value grew by 11.7% to $65 billion in 2017). Digitimes reported that the increase was the highest in nearly 10 years. The production value of PCBs produced by Taiwan-based makers in China and Taiwan was $21.1 billion in 2017, up 9.5% from 2016.  Among the target markets, automotive and communications showed the strongest growth.

 

We believe that we will see sustained growth in the PCB industry for the next 4 or 5 years barring any major political change or war.

 

We are now working on the IPC's January 2019 Executive Forum on automotive electronics to be held at next year's event. An update was given at the Raymond E. Pritchard Hall of Fame member breakfast on February 27.

 

Key management areas to be explored will include reliability/liability, business challenges, supply chain transformation, and government roles. The program will have all stakeholders together for the morning sessions for a 10,000 foot view of the business followed by separate sessions in the afternoon for fabricators and EMS operations and their suppliers.

 

The IPC is developing two Reliability Forums for Automotive Electronics.  The first will be held in Nuremberg on June 4-5. Speakers will include Volkswagen, Bosch, Continental, Infineon, and STMicroelectronics.  These will technical conferences targeting reliability, supplier quality, design engineers and managers.  A similar event will be held in the Fall in the U.S.

 

We can do better!

 

The 25 year old Automotive Electronics Council’s 61 member companies is continuing to work on building relationships with other “outside entities (JEDEC, IEC, USCAR, ZVEI, SAE, JEITA)”, to enable the development of relevant standards for the automotive industry. It is increasing its partnership with Chinese companies involved with automotive electronics.

 

It is evaluating what it must do to revise its standards in order to better qualify the upcoming disruptive technologies of autonomous driving, the Internet of Things, cybersecurity, etc. It believes that the next 5-10 years could make or break it as a relevant standards organization as others (JEDEC Automotive Forum, SAE/Mil Aero, ZVEI) “begin to infringe on its playing field.”

 

Rumors of the resurrection of eSurface (now in bankruptcy court) as Additive Circuits Technologies under the guidance of a recent president floated through the convention center. Apparently the new company will emerge from the Chapter 7 proceedings with "assets" being purchased by the former president who will then set up operations in Europe where funds have been raised to bring the company back to life. Hopefully, this time, management will not make grossly exaggerated invalid statements and have data to substantiate its claims.

 

China is drawing big money from global automakers seeking to compete with local rivals for the growing electric-vehicle segment of the world’s largest auto market. A Nissan Motor joint venture with China’s Dongfeng Motor Group announced $9.54 billion in investments over five years. This rivals the more than $12.4 billion in spending planned by Volkswagen and local partners through 2025.

 

The venture plans to release more than 40 models by 2022, more than 20 of them either electrics or vehicles propelled by motors that run on engine-generated electricity. It aims to increase its annual sales by around 1 million units from 2017 levels to 2.6 million by 2022, with electrified vehicles accounting for 30% of the total that year. (Source: Nikkei)

 

Daniele Schillaci, executive vice-president of Nissan said that the prices of battery vehicles and traditional cars will become even in just 7 years, ending the need for government subsidies that currently support the majority of electric car sales. He told the Financial Times that 2025 will be the turning point where the cost of an EV (electric vehicle) car will be the same as one with an internal combustion engine.

 

Nissan, through its global alliance with Renault and Mitsubishi, is the world’s largest electric car producer, selling more than 500,000 since launching the first battery powered Leaf car in 2010.

 

Dr. Hayao Nakahara of N.T. Information estimates 2017 PCB purchases by the automotive industry was about $6 billion of which $1 billion was purchased by Continental AG. He further states that about 70% of all rigid PCB manufactured in Thailand last year was for automotive applications. Further, Dr. Nakahara states that Taiwan and Japanese PCB makers are stepping up their production for automotive usage.

 

Flexium Interconnect a major Taiwanese supplier of flexible printed circuit boards (FPCBs) for Apple’s products announced its strongest quarterly earnings since being listed on the nation’s main board in 2003, despite the New Taiwan dollar’s appreciation.

The Kaohsiung-based company reported that net income in the 4th grew 34.1% to $47.2 million.

Fourth-quarter gross margin fell from 23.6% to 19.9% and its operating margin dropped from 17% to 15.3% due to a greater number of wireless charger modules produced at lower margins.

 

Net profits at Taiwan's Winbond Electronics, a supplier of specialty DRAM and flash memory, hit a 17-year high of $189.3 million) in 2017. EPS for the year increased 33% from 2016.

 

Thick film chip resistors prices will continue in short supply this year. Price increases of up to 15%, and in some cases 30%, have been announced since January by Chilisin Electronics, Walsin Technology, Ralec Electronic, Viking Tech, Yaego, and China’s Fenghua Advanced Technology Holding Co. (Source: the Taipei Times)

 

Is this what they mean when they say "Buy American"?

 

Japan’s Fujifilm Holdings is set to take over Xerox Corporation in a $6.1 billion deal, combining the U.S. Company into their existing joint venture to gain scale and cut costs amid declining demand for office printing.

 

Reminder

 

March 13-15, LOPEC, exhibition and conference for printed electronics in Munich.

 

March 14-16, SEMICON China in Shanghai (I'll be there).

 

China’s state-backed China Integrated Circuit Industry Investment Fund Co. is in talks with government agencies and corporations to raise at least $23.6 billion for its second fund vehicle with a goal of $31.5 billion to build a world class chip industry. It will again invest in a wide range of IC sectors from processor design and manufacturing to chip testing and packaging. This will benefit industry leaders from telecoms equipment makers Huawei Technologies and ZTE to major players such as the Tsinghua Group. The first fund—about $22 billion went to more than 20 listed companies, including ZTE and contract chipmaker Semiconductor Manufacturing International.

 

March 2018

 

SEMICON China 2018 was amazing in its size and attendance. More than 1,000 exhibitors filled an event record of more than 74,000 square meters of exhibition space – the size of nearly 10 professional soccer fields. This year's theme was "collect, collaborate, innovate".

 

China is set to build 19 new semiconductor fabs from 2017 onwards, according to SEMI’s World Fab Forecast. China’s fab construction spending is forecast to grow from a record high $6.2 billion in 2017 to $6.8 billion in 2018, accounting for over 50% of worldwide construction spending. Global semiconductor revenue, silicon shipments, capital expenditures, and fab equipment investment all set records in 2017 - with China's government backed increased participation.

 

Keynote speakers included:

• Zhou Zixue, chairman of the board, SMIC
• Rick Wallace, CEO and President, KLA-Tencor*
• Walden Rhines, president and CEO, Mentor, a Siemens Business
• Steve Kelley, president and CEO, Amkor
• Jackie Sturm, VP and GM of the Global Supply Management Organization, Intel
• Rick Gottscho, executive VP and CTO, Lam Research
• Chu Qing, VP & CSO, Huawei

 

* Shortly after SEMICON KLA-Tencor announced its agreement to purchase Israel's Orbotech for $3.4 billion. The acquisition is expected to diversify KLA-Tencor's revenue base and add $2.5 billion of addressable market opportunity in the printed circuit board (PCB), flat panel display (FPD), packaging, and semiconductor manufacturing areas.

 

China will invest more in the development of advanced chips, with the goal of ensuring that the country has a secure chip industry of its own, according to Ding Wenwu, president of the China Integrated Circuit Industry Investment Fund, also known as the “Big Fund”, in a speech at the Semicon China fair on March 15. China will invest billions more to develop a secure chip industry of its own. The Big Fund is the country’s national semiconductor fund.

It is now in its second phase of raising capital, after securing $21.9 billion in its first phase. Established in 2014 with support from the finance ministry and other Beijing-backed entities, it is China’s most prominent investment vehicle. It is designed to cut the country's heavy reliance on foreign suppliers. China imported more than $260 billion of chip-related products in 2017, a much bigger amount than it spends on oil.

 

Ding said the development of the semiconductor industry is a top priority for China, as outlined in the latest government work report by Premier Li Keqiang during this year’s National People’s Congress.

Chips are not only the brains of electronic devices. But, they are also often used in surveillance, which means their production and development have national security implications and form a strong incentive for China to work relentlessly to expand the sector.

 

FPD China, productronica China, and electronica China were co-located with SEMICON. ALL of the co-located exhibits and conferences had major presentations on automotive electronics! electronica's forum agenda included tracks on "Innovation and Development of Electric Vehicles" as well as the "China International Automotive Electronics Conference". The latter included speakers from Avnet, Silicon Labs, and Micron Technology.

 

This begs the question as to what segments of automotive electronics are most important to the IPC's membership - especially in the U.S. What should be presented to its leaders at an executive forum held in the U.S.? What would have the greatest value? Who would provide the best guidance? An integrator or an OEM?

 

Business was reported to be good on all fronts. Concern over a trade war tamped down a bit what should have been an exuberant event. Chinese executives complained about the current difficulty in "partnering" with or buying technology/businesses in Taiwan and America. China's government sponsored press bemoaned and criticized the new forthcoming U.S. tariffs while stating that China was ready to "open" more of its markets. All this was widely publicized even as bilateral negotiations were being prepared between the U.S. and China.

 

How does one reconcile the need for protecting intellectual property, maintaining an independent supply chain for defense, reduce artificial barriers (import duties) and not undermine the long-term health of the semiconductor industry which largely depends on international trade (it increased 30% last year)?

 

What are the dangers when a nation’s boundaries are determined by corporations and global trade rather than a country’s borders? What are the boundaries between “free trade” and borders? Can they be balanced? If so, how?

 

Meanwhile, the Financial Times reported on March 26 that China has offered to buy more semiconductors from the U.S. to help cut China’s trade surplus by diverting some purchases from South Korea and Taiwan. Chinese officials are also rushing to finalize new regulations by May that will allow foreign financial groups to take majority stakes in its securities firms according to the Financial Times.

 

SEMI analysts expect 9% growth for fab equipment spending in 2018 and 5% in 2019. There are 82 future facilities/lines scheduled to start volume production in 2018 or later. This year Samsung will invest about $14 billion in fab equipment, down from $17 billion in 2017. China (including non-Chinese headquartered companies) will begin to ramp up to $11 billion in 2018, increasing to $18 billion in 2019.

 

Intel plans to invest in production expansion at its Kiryat Gat plant in southern Israel.

 

ADI plans to close its Milpitas, California (Silicon Valley) lab within the next few years.

 

Shanghai PhiChem Material is building a new larger production facility to meet increasing demand at its Anqing location for its epoxy molding compounds for SOP, QFG, SD cards/BGA, and other IC packages. PhiChem bought the business unit from Eternal last year.

The company also introduced its new Sn-Ag plating solution for plating wafer bumps and a new Cu plating solution designed for high speed pillar formation in RDL applications.

 

PMTC, a PhiChem subsidiary exhibited its low temperature (containing Bi and In), high temperature, and anti-fatigue micro solder balls at SEMICON.

 

Taiwan's Everlight Chemical showed a wide line of positive working G-line and I-line photoresists for IC and LED fabrication. It also showed a "thick" photoresist (EPG-591) for plating Cu and Au bumps.

 

The numbers are in

 

The Taiwan Printed Circuit Association (TPCA) states that the worldwide PCB industry grew 11.7% to $65 billion in 2017.

 

Taiwan's PCB maker Compeq Manufacturing has reported consolidated revenues of $106.7 million for February 2018, down 31.1% on month and 15.1% on year.

 

Will only the "giants" of industry be able to establish footing in the automotive electronics industry? There already appears to be a surplus in battery production. Yet new entries, e.g., Seikisui Chemical, keep announcing their intention of joining the fray.

 

Will there be new legacy or exchange businesses in the yet to be matured markets?

 

Nissan is launching an exchange program in Japan for Nissan LEAF batteries in Japan that allows LEAF owners to trade old batteries plus $2,850 for refabricated ones - less than half the price of a new LEAF battery pack.

 

Foxconn’s FIT Hon Teng division will pay $866 million to buy Belkin International, a maker of smartphone accessories and home networking products. The acquisition is seen as helping FIT Hon Teng acquire a greater presence in new applications such as car camera modules that are used in driverless cars.

 

Musical chairs! What were the original intents when all this began? What were the basic assumptions? One has to wonder!

 

FLEX announced the divestiture of Multek's China operations to Multi-Fineline Electronix, a subsidiary of Suzhou Dongshan Precision Manufacturing (DSBJ) for a net consideration of $273 million. DSBJ is set to acquire all equity interests in the non-US business of Multek and will continue to operate under its existing name and location in China. The Multek American business will remain under FLEX. The transaction is expected to close by year-end.

 

Global Brands Manufacture (GBM) will acquire a 70% stake in Japan-based Elna Printed Circuits for $32.7 million.

 

You can get the Japan Marketing Survey "Solder Resist Report 2017" published a year ago for only $2,850!

 

While greater China now dominates the global printed circuit fabrication industry, and spends tens of billions of dollars through federal funding just on ICs, shouldn't the U.S. invest just a billion to ensure America's independence of a secure interconnect (printed and flexible circuit fabrication) industry?

 

The U.S. Defense Advanced Research Projects Agency (DARPA) is planning to invest up to $1.5 billion* in the coming years to ensure the United States remains the world leader in the electronics field.

Working closely with the electronics industry, DARPA is seeking to create indigenous ‘leap-ahead’ technologies to ensure the United States maintains dominance in the electronics field, Bill Chappell, director of DARPA’s Microsystems Technology Office (MTO) stated in a recent interview.

There is not much innovation in the semiconductor space anymore, Chappell noted. “If you look at the venture capital funds they have not gone into the core semiconductor material space,” he said.

 

*Note: Singapore's Broadcom "enriched" its takeover bid of Qualcomm by offering to establish a $1.5 billion fund to train and educate the next generation of U.S. engineers to ensure the country’s lead in future wireless technology.  A U.S. government panel had, in an unusual move, stepped into Broadcom’s hostile takeover bid for Qualcomm early this month, citing a number of concerns around the development of the next generation of mobile networks (5G) and technology.

The Committee on Foreign Investment in the United States (CFIUS) delayed a shareholder meeting that had threatened to hand Broadcom control of the Qualcomm board. It fears that the merger would lower R&D spending weaken U.S.-based Qualcomm against Chinese companies.

 

General Motors will build production versions of its Cruise AV (autonomous vehicle) at its Orion Township plant in Michigan. The roof modules for its self-driving vehicles will be assembled at its Brownstown facility. GM will invest more than $100 million to upgrade these 2 facilities. It plans to commercialize the Cruise AV model in 2019.

 

Germany's Schweizer Group (Schweizer Electroncis) had a profitable record sales year of  $149 million (preliminary unaudited results) with record bookings of $224 million - up 14% from 2016. The company has mutually agreed with Meiko Electronics for a mutual reduction in the shares of each other's company as Schweizer proceeds with its plans to construct a new facility in Jiangsu, China.

 

Finnish PCB manufacturer Aspocomp will invest about $12.3 million in a technology update at its Oulu Plant. The company has two main objectives with the investments. 1st grow its new customer segment, the testing of semiconductor components, by producing high-tech PCBs to meet the testing and R&D needs of customers. 2nd, to increase its production capacity to meet rising demand from the 5G and automotive industries.

 

Creative Materials introduced our new series of conductive Inks and coatings designed for manufacturing printed electronic circuits on washable textiles. The Ag, AgCl and C based inks are able to withstand 50 machine wash and dry cycles. They are stretchable and breathable and are designed for direct printing onto synthetic fabrics, including polyester, spandex and nylon, with no need for dielectric encapsulation to ensure wash durability. They are applied by screen-printing, syringe dispensing, dip coating or roll coating. Applications include wearable electrodes, biosensors, heart rate monitoring, pressure sensors and conductive wire replacement. Creative Materials products are manufactured in the U.S.

 

Memories

 

It's now a half century since George Hart, Executive VP of TRW presented me with the IPC President's Award in 1968. The award was established in 1966. Back in the day, the IPC stood for the Institute of Printed Circuits.I first met George when he was the general manager of Cinch Graphic, a large southern California printed circuit shop formerly known as Graphic Circuits that TRW bought from Spence Glaspell. I was the newly appointed young western regional manager of Shipley Company sent "West" to open a new 14 state territory for the small New England chemical company. George was a tough no-nonsense Chicago engineer sent to the City of Industry to "fix" the new PCB acquisition. He became a terrific manager and industry leader rising to the presidency of the IPC and executive Vice Presidency of TRW. We spent many a night and weekend fixing problems in the facility he inherited while designing new systems for the volume production of "fine line" MLBs. The plaque surprisingly awarded me by George remains one of my prize possessions. I think of George whenever I look at it and wonder what could have been had George's life not ended so suddenly and prematurely. George was a passenger on that ill-fated 1979 American Airlines flight 191 that went down moments after lift off from Chicago’s O’Hare Field.

 

April 2018

 

Early this month we posted the following to our thousands of "followers" on LinkedIn to give them a one month "heads up".

 

Will the proposed 25% import duties on Chinese goods, if enacted, shut down our electronics interconnect industries?

 

The 1,200+ products include a large number of assembled printed circuits, electroplating equipment, and soldering machines as well as laser and UV exposure systems for imaging and display panels and assemblies.

 

Here are some examples: Printed circuit assemblies for telecommunication apparatus; printed circuit assemblies which are subassemblies of radar, radio navigation aid or remote control apparatus; assemblies and subassemblies for flight data recorders, consisting of 2 or more parts pieces fastened together; printed circuit assemblies; printed circuit assemblies of flat panel displays; printed circuit assemblies for medical devices; printed circuit assemblies for instruments.

 

The interconnect industry is global and America's electronic industries no longer have an independent domeastic supply chain to meet all of its needs.

 

All eyes will be on Washington the next two months as public hearings on the tariffs by the Office of the U.S. Trade Representative (DocketNo. USTR-2018-0005) are held next month (May 15). Comments from the public are being solicited this month.

 

On April 26 the IPC sent the following email.

 

"The U.S. government’s proposed tariff increase has the potential to impact our industry and your business significantly. IPC wants to speak out on your behalf. We are asking for your participation in a confidential survey to help IPC accurately characterize how tariff increases on Chinese imports are likely to impact the U.S. electronics industry. 

Take survey now.   Please respond by Friday, May 4."

 

Or, contact Chris Mitchell at ChrisMitchell@ipc.org .

 

It's important!!!!! IPC's IMPACT is in Washington, D.C. May 21-23!

 

Earlier this year we spoke of component shortages and rising prices. Now a Morgan Stanley report indicates double ordering at a record level. It's not possible to determine how much of this is based on true demand or fear of potential impending increased costs due to new import duties. But one thing is certain, shortages and double orders will combine to slow some electronic manufacturing sectors. Lead times on memory, FPGAs, and MCUs are increasing in the face of current shortages.

 

Then we have the ZTE situation. ZTE is one of the first Chinese high-tech companies to successfully make inroads into the global market with its own branded products. The company's sales last year was $17.2 billion with net profit of $720 million -- mainly by selling telecom equipment and software to carriers, developing information and communication solutions for governments, and providing smartphones for retail consumers. ZTE generated 43% of its sales from abroad.

 

The U.S. has banned American companies from selling components to ZTE for seven years, after the Chinese firm failed to comply with an agreement with the U.S. that was reached after it was caught illegally shipping goods to Iran. Last month ZTE pled guilty to illegally shipping items of American origin to Iran from 2010 to 2016 in violation of U.S. sanctions. It agreed to $1.19 billion in penalties.

 

Now the Taiwanese government has ordered all of it’s companies that sell to Chinese telecom equipment maker to suspend shipments until they obtain "approval".

 

And what of ZTE's largest rival Huawei?

 

Huawei scrapped plans for a bond sale following revelations that the U.S. Justice Department is investigating whether it has violated U.S. sanctions related to Iran. The company pulled what would have been its first euro-denominated bond sale after attracting strong investor demand for a $609 million offering of five-year debt.

 

All this should delight Xiaomi who jut announced that it will make PCBs in India where it has 6 plants (built in "partnership" with Focconn) employing 10,000 workers making smartphones.

 

What’s next? In whose court is the electronic industry’s ball? China’s? The U.S.’s? President Trump talked tough on many commodities, and then seemed to waver or move toward making exceptions and deals. He made friendly overtures to President Xi, who then seemed to think that the two countries could bridge their differences through talks…until the last round of threatened 25% tariffs included a number of printed circuit assemblies and other electronics parts. One industry guru thought that there is now a chance to rebuild America’s PCB industry, but I think that the supply chain is now too global and diverse…and it lacks investors with the stomach to take the risk. It lacks time to do so. Much of the needed materials and equipment are made in China. Now Trump is re-investigating TPCA membership – which excludes China. It IS complicated! So, what’s the next step?

 

According o the April 26 report of IC Insights TSMC continues to dominate the foundry market with 2017 sales of $32.2 billion of the world's $62.3 billion. The top 8 major foundry leaders held 88% of the market. The only American in the top 8 was Global Foundries with $6.1 billion - 9.8% of the global market.

 

State-backed Tsinghua Unigroup’s affiliate Yangtze Memory Technologies is building a $24 billion memory chip facility in Wuhan, while Innotron Memory, another government-sponsored program, is constructing an $8 billion factory in Hefei. Semiconductor Manufacturing International, China's biggest contract chipmaker, is also expanding its facility in Shanghai.

These are all part of Beijing’s relentless push to slash dependence on overseas technologies, but it’s not fast enough to bear fruit. These facilities rely heavily on U.S. semiconductor equipment providers such as Applied Materials, Lam Research, and KLA-Tencor. Source: Nikkei

 

Although originally planned to be produced for senior executives of the PCB fabrication supply chain, the January 18, 2019 IPC Executive Forum on Automotive Electronics will welcome all senior executives with an interest in this topic. One of the speakers will come from China to present "PCB Reliability Testing for Automotive Electronics".

 

German Economic Minister Peter Altmaier told Germany’s mass-circulation Bild newspaper that the carmakers needed to invest high “two-digit billion amounts” in electric car technology He stated that he did not understand why the firms had hesitated for so long. He also stated that there is a need todevelop battery production facilities in Europe to keep up with global competitors.

 

Changing of the guard

 

Fineline VAR Ltd. acquired Prestwick Circuits GPS Ltd on April 4th. Do you remember Bill Miller, OBE?

 

New technology, new packages, new supply chain segment

 

Magna and its partner, Innoviz Technologies of Israel, will supply the BMW Group with solid-state LiDAR for upcoming autonomous vehicle production platforms.

The new-business award, one of the first in the auto industry to include solid-state LiDAR for serial production, underscores Magna’s ability to support customers with flexible, scalable solutions and transform innovative technologies into automotive-grade products.

 

The First Printed Battery 

 

Nanoengineers at the University of California San Diego have developed the first printed battery that is flexible, stretchable and rechargeable. The zinc batteries could be used to power everything from wearable sensors to solar cells and other kinds of electronics.

 

The researchers made the printed batteries flexible and stretchable by incorporating a hyper-elastic polymer material made from isoprene, one of the main ingredients in rubber, and polystyrene, a resin-like component. The substance, known as SIS, allows the batteries to stretch to twice their size, in any direction, without suffering damage.

The ink used to print the batteries is made of zinc silver oxide mixed with SIS. While zinc batteries have been in use for a long time, they are typically non-rechargeable. The researchers added bismuth oxide to the batteries to make them rechargeable. Source: Advanced Energy Materials, April 19, 2017

 

More Taiwan-based players in the IT supply chain, including Foxconn Electronics, Inventec, Largan Precision, and TSMC, are expecting orders from Xiaomi Technology as the China-based smartphone vendor has continued to ramp up its shipments globally.

Xiaomi shipped over 70 million smartphones in 2017 and could ship 100 million units this year. The company has also joined forces with Foxconn to set up a PCB lamination plant in India where Xiaomi outperformed Samsung Electronics to become the largest smartphone vendor in India in the fourth quarter of 2017.

 

Taiwan-based flexible PCB maker Flexium Interconnect stated that its gross margin fell  to 14.7% in the first quarter of 2018, its lowest level in four years.

The company reported consolidated revenues of $184.20 million for the first quarter, up 27.6% from a year earlier but sharply down 49.2% from a quarter earlier. Net profit for the quarter plunged 82.1% sequentially and edged up only 0.4% on year.

Market observers are conservative about the 2018 revenue growth momentum for Flexium, now one of the suppliers of flexible PCBs to Apple and Amazon.

 

Major fire at a leading maker of PCBs for automotive electronics

 

A major fire at Chin Poon Industrial's Taoyuan City PCB manufacturing facilities in Taoyuan City Saturday night April 29 killed five firemen and two migrant workers while injuring seven other firefighters. Taoyuan Mayor Cheng Wen-tsan, who was on site to coordinate firefighting and relief efforts said that the five firemen were killed because they were trapped underneath heavy machinery that made them unable to escape the fire.

Seven other firefighters suffered injuries. Some were splashed by acids or alkali chemicals stored at the factory. They have been hospitalized.The two migrant workers killed in the blaze were from Thailand.

More than 70% of Chin Poon's revenues are from the automotive electronics industry. Losses from the fire are estimated to be about $10.2 million according to a Digitimes report.

Chin-Poon spokesman Hsiao Kung-yen said that the Taoyuan site’s P2 and P3 factories damaged in the fire generate around 15% of its total monthly revenues. He said that the company's P1 and P5 factories, as well as its China- and Thailand-based plants, will be supporting the damaged facilities, where production will be halted for about six months.

 

Apple has signed a deal with Volkswagen to turn some of the carmaker’s new T6 Transporter vans into Apple’s self-driving shuttles for employees — a project that is behind schedule and consuming nearly all of the Apple car team’s attention, said three people familiar with the project.

Apple’s deal with Volkswagen, which has not been previously reported, and the failure of its talks with other automakers reflect the continuing travails and diminished scope of the company’s four-year-old car program.

 

The CCI Eurolam Group has entered into a distribution agreement with the UK's Arjowiggins Creative Papers over EMEA region, effective April 2018, to be a distributor of the PowerCoat® substrate product line, a patented, unique, flexible paper formulation that allows the printing of complex electronic circuitry directly onto paper for printed electronics manufacturing. This agreement covers a large number of countries, including Germany, Austria, Switzerland, Belgium, Netherlands, Luxembourg, Scandinavia, France, Italy and the UK.

PowerCoat® is a microscopically smooth 100% paper substrate with a specially adapted coating that creates the ideal surface for printing electronic circuits directly onto paper products, eliminating the need for plastic coatings and additional processes. It is recyclable, biodegradable and FSC- certified.

 

Memories

 

It's now a half century since George Hart, Executive VP of TRW presented me with the IPC President's Award in 1968. The award was established in 1966. Back in the day, the IPC stood for the Institute of Printed Circuits.I first met George when he was the general manager of Cinch Graphic, a large southern California printed circuit shop formerly known as Graphic Circuits that TRW bought from Spence Glaspell. I was the newly appointed young western regional manager of Shipley Company sent "West" to open a new 14 state territory for the small New England chemical company. George was a tough no-nonsense Chicago engineer sent to the City of Industry to "fix" the new PCB acquisition. He became a terrific manager and industry leader rising to the presidency of the IPC and executive Vice Presidency of TRW. We spent many a night and weekend fixing problems in the facility he inherited while designing new systems for the volume production of "fine line" MLBs. The plaque surprisingly awarded me by George remains one of my prize possessions. I think of George whenever I look at it and wonder what could have been had George's life not ended so suddenly and prematurely. George was a passenger on that ill-fated 1979 American Airlines flight 191 that went down moments after lift off from Chicago’s O’Hare Field.

 

May 2018

 

The month started with news of 6.2 million unfilled jobs in the U.S., many of them blue collar as well as high-paid semi-skilled labor. One has to wonder how fast this nation can gear up to train workers and fill the jobs.

On the other hand, a number of this year's graduates with B.S. degrees in physics and mathematics from such noted schools as RPI, several years of R&D work in university physics laboratories with published papers, experienced in mathematical modeling, and with grade point averages above 3.0 are still unemployeda and seeking jobs.

See our Comments & Discussion page for thoughts on this topic by the president of IMI.

 

Reducing PCB real estate

 

TSMC has a new way to boost the power of graphics cards by Nvidia and AMD without making them physically larger. The technology is called wafer-on-wafer, and mimics 3D NAND memory technology used in modern solid-state drives by stacking layers vertically rather than spreading the hardware horizontally across the printed circuit board, which would require additional physical space.

TSMC discovered a way to stack two wafers in a single package. The upper wafer is flipped over onto the lower wafer, and then both are bonded together. Moreover, the upper wafer contains the in/out connection thru-silicon vias. As a result the two wafers are  packaged using flip-chip technology The system appears to be economically feasible (due to yields) on circuits with >16 nanometer features. Source: Digital Trends

 

Platform Specialty Products announced that its MacDermid Performance Solutions business successfully closed the strategic acquisition of HiTech Korea, a provider of non-conductive electronic adhesives that serve a variety of end-markets including mobile phones, automotive, camera modules and LEDs for consumer devices. The business is based in South Korea with an additional presence in Vietnam.

 

NOW is the time to put this on your calendar!

 

Monday, January 28, 2019 - San Diego at IPC APEX EXPO
7:30 am – 5:00 pm	EMS Management Council Meeting
7:30 am – 1:30 pm	IPC Design Forum
8:00 am – 5:00 pm	IPC Standards Development Committee Meetings
8:30am – 5:00pm	PCB Supply Chain Meeting: Executive Forum on Automotive Electronics*
9:00 am – 12:00 pm	Professional Development Courses
12:00 pm – 1:30 pm	Awards Luncheon
2:00 pm – 5:00 pm	Professional Development Courses   *A unique global top to bottom systems overview with speakers from Europe and Asia as well as the U.S. Several case histories will be included.

 

The IPC provided comments to the Office of the U.S. Trade Representative (USTR) on the domestic impact of proposed tariff rate increases on Chinese imports in a letter to The Honorable Robert Lighthizer U.S. Trade Representative. It explained the global nature and interdependencies of our industries after polling its membership.

 

New embedded components package

 

The BMBF INTAKT (interactive microimplants) innovation cluster, beat out around 1,000 other entries to be crowned one of the 100 innovative prize winners at the “Extraordinary Places in the Land of Ideas 2017” competition.

 

The goal of INTAKT, which is coordinated by the Fraunhofer Institute for Biomedical Technology (IBMT), is to develop the next generation of active integrated implants. The developmental focus of these innovative adaptive systems lies in a completely redesigned interaction between humans and technology; specifically between the patients and their implants as well as the attending physician.

 

Würth Elektronik, a member of the cluster took on responsibility for the development of the electronics for the implant. As part of their responsibilities, they were able to come up with a thin and moldable circuit carrier. The goal was to push the limits of miniaturization while also increasing the device’s functionality. They achieved this by integrating sensors, ASICs and energy components into the PCB. They move das many components as possible to the inner layers of the circuit board. It allowed the implants to be discreetly placed in the body while also retaining reliable effectiveness.

 

Würth Elektronik is researching new biocompatible materials, the properties that make such materials biocompatible, as well how to process the materials for circuit board production. Moreover, Wurth tested new approaches in order to successfully transfer energy using etched planar coils or embedded inductivity.

 

Orbotech, who announced that it will be acquired by KLA-Tencor last month,  said that its first quarter sales increased 34% over the same period last year to $250.6 million. Printed circuit board segment revenues were $87.1 million, up from $77.5 million last year. Gross profit and gross margin in the quarter were $117.9 million and 47.1%, respectively, compared with $87.1 million and 46.4%, respectively, in 2017.

Orbotech also announced new orders of approximately $50 million from one of the world's top 10 flexible printed circuit fabricators, Career Technology of Taiwan.

 

Memory chipmakers Nanya Technology, Winbond Electronics, and Macronix International have reported on-year increases in consolidated revenues of 77.9%, 23.4% and 41.7%, respectively, for April 2018.

DRAM firm Nanya posted April revenues of $257.8 million, hitting a record high.  source: Digitimes

Brazil ended the first quarter of 2018 with 11.1% annual growth in the production of electric and electronic goods, thanks to an increase of 26.1% in the production of electronics. The figures come from the state statistics office IBGE and were aggregated by the Brazilian Electrical and Electronic Industry Association (Abinee).

In the electronic goods segment, the production of computer equipment increased by 26.3%, while the production of audio and video equipment grew by 47.4 %.

 

The end of this year long saga will meet the wishes of the Japanese government

 

Reuters in Tokyo reported that China regulators have approved the $18 billion sale of Toshiba’s chip unit to a consortium led by U.S. private equity firm Bain Capital. The deal is expected to be completed on June 1.

The takeover consortium includes South Korean chipmaker SK Hynix, Apple, Dell Technologies, Seagate Technology, and Kingston Technology.

Toshiba will reinvest in the unit with Hoya, a maker of parts for chip devices, allowing Japanese companies to retain more than 50% of the business.

 

Circuit Foil in Luxembourg's TWLS and TZA electrodeposited copper foils are now arsenic-free. All traces of arsenic have been removed from the treatment process.

There is no change in the base copper foil or its properties.

 

Contactless charging of electric and hybrid vehicles

 

BMW will start production of its cutting-edge inductive charging system in July. Its charging pad system will work with many of the German carmaker’s plug-in hybrid electric vehicles, beginning with the 5-series 530e iPerformance.

It will be available to European customers by the end of the summer. The company is expected to start a pilot program in the U.S. limited to 530e drivers in California later in the year.

 

BMW’s charging technology comprises a base pad with an integrated primary coil that can be installed in a garage or outside. “An alternating magnetic field is generated between the two coils, through which electricity is transmitted without cables or contacts at a charge rate of up to 3.2kW,” the Munich-based automaker explains. “This form of power supply to the high-voltage battery involves a charging time of around 3.5 hours.”

 

BMW says the inductive charging system’s field strength falls well within regulatory limits, while the electromagnetic radiation it produces is less than that of a typical kitchen hotplate.

 

Needed for automotive electronics, too

 

A "5G plus 8k" industry alliance comprising 16 companies, including Oriental Pearl, China Telecom Shanghai branch, BesTV, and Foxconn. was founded in Shanghai this month.

The alliance will focus on ultra high-definition video transferred on 5G networkso be commercially available in China in 2020, the Ministry of Industry and Information Technology said.

The 5G technologywill provide speeds 20 to 50 times faster than 4G networks. China Telecom has already started 5G trial networks in six cities nationwide including Shanghai.

 

It's not easy - it takes more than size!

 

Apple has signed a deal with Volkswagen to turn some of the carmaker’s new T6 Transporter vans into Apple’s self-driving shuttles for employees — a project that is behind schedule and consuming nearly all of the Apple car team’s attention, said three people familiar with the project.

Apple’s deal with Volkswagen, which has not been previously reported, and the failure of its talks with other automakers reflect the continuing travails and diminished scope of the company’s four-year-old car program.

 

FLEX Taiwan debuts June 7, 2018 at the Taipei International Convention Center (TICC), showcasing the latest flexible hybrid electronics (FHE) technology, innovations and industry insights.

 

2018FLEX Taiwan will cover key technical advancements in: 

• Flexible Hybrid Electronics Market Trends and Opportunities 
• Advanced Manufacturing and Packaging Technology
• Next Generation Flat Panel Display
• Smart and Flexible Sensors
• Flexible Wearables and Other Opportunities

Featuring 14 keynote speeches, 2018FLEX Taiwan brings together leaders across the semiconductor, flat panel display, sensor and the entire microelectronics industries.

 

The ZTE and Impending Trade War Saga

 

Nanya Technology, Taiwan's biggest DRAM chipmaker, will apply for a permit to provide chips to ZTE. The company said it has been notified about restrictions on shipments to ZTE, and that the ban would have limited effect on its operation. The company sid on May 9 that it is preparing to apply for a permit to continue shipping chips to ZTE Corp as export restrictions took a new turn due to a US-China trade spat.

 

Taiwanese semiconductor company MediaTek has alreadyreceived approval to resume shipping chips to ZTE.

 

From the press in Japan and China

 

ZTE, China’s second biggest telecom equipment maker main business operations have ceased due to a ban imposed by the U.S. government. The U.S. ban prevents ZTE from using some Qualcomm processors and Android devices with Google Mobile Services software. The Chinese firm is trying to have the ban modified or reversed, it said in exchange filings late on May 9.

 

Hit with the seven-year ban on American technology exports April 16 for illegally shipping equipment to Iran, the company has halted smartphone sales in China. Since it does significant business with U.S. and Japanese parts suppliers, prolonged stoppages to production and sales will also worsen the impact on the global smartphone supply chain. Partly state-owned ZTE was also the ninth-largest smartphone vendor in China last year and fourth in the U.S. Ranked ninth in the world, the company is one of the first major victims of intensifying Sino-American trade frictions.

 

A senior ZTE official said that the company paid over $2.3 billion to 211 U.S. exporters in 2017 including over $100 million each to Qualcomm, Broadcom, Intel, and Texas Instruments. In March of 2017 ZTE paid nearly $900 million in penalties for exporting U.S. technology to Iran and North Korea in violation of sanctions. American companies are estimated to provide 25% to 30% of the components used in ZTE’s equipment.

 

ZTE is also reported to have paid over $100 million each to other U.S. suppliers in 2017 including chip makers Xilinx and optical component company Acacia Communications as well as memory chip maker Sandisk.

 

The ban also hurts ZTE’s ability to provide services, such as repairs to infrastructure, to customers in other countries and regions in which it operates. ZTE provides services for 100 million users in India, 300 million users in Indonesia, and 29 million users in Italy, the official said.

 

President Trump "tweeted" on May 13, "President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!"  

 

On May 21 the impending U.S. and retaliatory China duties were placed on hold pending the outcome of a new framework under which China would increase its purchases of American agricultural and liquefied natural gas (and other) products,  ZTE would pay a large fine while changing its board of directors, and China would also provide added protections for IP.

 

On May 22 China said it will reduce auto import duties from 25% to 15% effective July 1 following pledges to buy more U.S. goods and end restrictions on foreign ownership in the industry.

 

On May 25 a tentative agreement was reached with the U.S. administration under which ZTE would pay another fine ($1.3 billion this time) and buy a large amount of components from the U.S. - But, Congress is opposed to it based on what has been released so far.

 

The WSJ reported from Beijing on the 26th that Chinese authorities are set to approve Qualcomm planned $44 billion acquisition of Netherlands-based NXP Semiconductors NV in the next few days, according to people familiar with the matter, in what would be another significant step toward easing frayed U.S.-China trade relations.

 

China has been looking to accelerate plans to develop its semiconductor market to reduce its heavy reliance on imports and has invited overseas investors to invest in the country’s top state-backed chip fund.

 

Two major Chinese companies are setting up SMT for smartphones and TVs in India to beat new cost increases due to new duties

 

Chinese handset and telecom equipment maker Huawei is starting PCB assembly by setting up its SMT  line in partnership with its contract manufacturing partner, Flex, in Sriperumbudur near Chennai. ”The deployment of the SMT line is in full swing. We will achieve full capacity in the next two months. This is going to swell our growth to get into top three brands,” said P. Sanjeev, Vice President Sales, Huawei India - Consumer Business Group. 100% of Huawei's smartphones for the "local market" will have India assembled PCBs within two months.The executive also informed that the brand has been heavily impacted by the recent rupee fluctuation and the PCBA duty.  Xiaomi, India’s top smartphone vendor recently increased the prices of smartphones and television sets, following the government’s move to impose 10% duty on imports of populated printed circuit boards (PCBs), camera modules and connectors.Xiaomi, however, has also started PCB assembling in Sriperumbudur in collaboration with its Taiwanese manufacturing partner, Foxconn.

Meanwhile, Taiwan's electronic exports hit a new April high   Taiwan's Ministry of Economic Affairs (MOEA) said that its export orders in April posted year-on-year gains for the 20th time in the last 21 months, increasing 9.8% to $39.11 billion. Export orders placed with Taiwan-based electronic components and machinery suppliers hit record highs last month. Orders for electronic components increased y-o-y 12.1% to $10.18 billion with strong demand for ICs, servers, and PCBs for a growing range of applications in high performance computing, the IoT, automotive electronics, and gaming PCs.   Still growing creating new opportunities   Worldwide semiconductor revenue is forecast to grow for the third consecutive year in 2018 to $450 billion, up 7.7% over 2017, according to a new Semiconductor Applications Forecaster (SAF) from International Data Corporation (IDC). The overall memory market was the key story of last year, due to strong demand, limited supply, and product mix constraints. Non-memory semiconductors are forecast to grow $11 billion to $302 billion in 2018.   Revenue concentration continued to increase with the top 10 companies making up 60% of the semiconductor market. “Market consolidation in the semiconductor industry over the past five years continues to shape the competitive landscape for semiconductor suppliers as each company continues to refine its core markets and make acquisitions to find new and emerging sectors for growth. The pace of change and technology is expected to accelerate as machine learning and autonomous systems enable a more diverse set of architectures to address the opportunity. This will fuel the engine of growth for semiconductor technology over the next decade,” said Mario Morales, program vice president, Semiconductors at IDC.   The automotive market will continue to be the leading area of growth , growing at a 9.6% CAGR from 2017-2022. “The key drivers of electrification, connectivity and infotainment, advanced driver assistance (ADAS), and autonomous driving features will continue to drive the growth of semiconductor content on a per vehicle basis,” said Nina Turner, research manager for Semiconductors at IDC.

June 2018

 

What a mess!

 

The impending trade/technology dispute with China has many electronic circuit fabrication and assembly/packaging executives puzzled and unable to plan the near term with any degree of certainty.

The China/U.S. connection/interconnection is quite complex. Threats and counter threats coupled with component supply shortages have resulted in a scramble to try to beat the expected July 6 imposition of a new 25% duty on a large number of items in America’s electronics supply chain.

 

We understand the need to “level the playing field” - in a broad sense. We have seen how quickly U.S. Steel can reopen 6 shuttered plants and get back into production.

But, in the case of electronic interconnections (aka printed circuits) the situation is different. The U.S now only produces about 4% of the world’s circuits and relies on Asia for much of its needs. Many of its closed and dismantled domestic fabricating shops would be out-of-date and incapable of producing the technical requirements of today’s circuits were they able to reopen.

 

Components are made and shipped to China for assembly and returned to the U.S. for final packaging and box build. The assemblies may now be taxed upon their return.

The supply chain has become quite intertwined. Some materials and specialty manufacturing equipment to produce, test and assemble boards are no longer made in America.

 

Component supply shortages compound the situation. Some of these shortfalls are expected to last for more than12 months.

 

Unintended consequences include potentially near disastrous effects on smaller American electronics companies that purchased custom manufactured production equipment in China in the Spring with scheduled deliveries in late July or August. An unforeseen half or three quarters of a million dollar tax on a $2 or $3 million dollar purchase could sink them.

 

The IPC conducted a valuable Webinar on June 29 to help clarify the situation for its members. They informed he participants of a rumor on impending export restrictions. They updated us CFIUS activities and reform. They told us of Congressional activity to re-establish authority on trade matters. Section 301 tariffs could be extended to added products.

They noted that 20,000 exclusion requests for steel have been filed but fewer than 100 granted. It’s a complicated process.

 

Do you know what’s next? My crystal ball is cracked.

 

Note the opinion of Alun Morgan, Chairman of the EIPC, on our Comments & Discussion page.

 

Meanwhile, China is spending billions to develop an army of robots to suoercharge its economy. Just 3 1/2  years ago Chinese President Xi Jinping called for a robot revolution in manufacturing to boost productivity.

Wages in China are rising, and it’s becoming harder to compete with cheap labor. An aging population in China also necessitates automation. The working-age population, people age 15 to 64, could drop to 800 million by 2050 from its current 998 million. Chinese robotic growth is forecast to exceed 20% annually through 2020. 

 

Meanwhile, rising wages are consuming profits and pushing manufacturing to Southeast Asia. Shanghai’s minimum monthly wage of $366.62, two and a half times what it was a decade ago.

According to the International Federation of Robotics, China added 87,000 industrial robots in 2016, slightly below Europe and the United States combined. A national campaign, Made in China 2025, encourages automated processes and intelligent manufacturing. There are now more than 3,000 robot makersin China.

 

Sales in the global semiconductor-grade silicon wafer market are forecasted to increase more than 20% in 2018, after surging 20.8% in 2017, thanks to a continued rise in silicon wafer prices, according to Digitimes Research.

The supply of silicon wafers particularly that of 8- and 12-inch ones will remain tight for at least one to two years.  Industrial, IoT and automotive applications will play major drivers of demand for 8-inch wafers, while demand for 12-inch wafers will come from mainly the cloud storage and smartphone segments.

 

Small component - big problem

 

The global multilayer capacitor shortage will last at least a year. Smartphones have hundreds of them and their cars have thousands. The part, which costs less than a penny apiece, helps control the flow of electricity and stores power for semiconductors, a function without which virtually no electronic device could work.

A proliferation of smart devices, factory automation robots and more sophisticated cars has lifted demand for the MLCC. A typical gasoline-powered car may require only a few thousand, but an electric car might need 10,000, say industry experts.

 

“There are only a handful of makers, mostly Asian, produce the component. The top three companies, Murata Manufacturing, Samsung Electro-Mechanics, and Taiyo Yuden own 60% of the market, according to research firm Paumanok Publications. Samsung said in June that it wouldn’t be able to accept new orders “for a while.”

 

ZTE announced a new board of directors as part of "the deal" it made to get its  devastating American supplier ban lifted. The United States slapped the crippling seven-year supplier ban on ZTE, China’s No. 2 telecommunications equipment maker, in April after it broke an agreement to discipline executives who conspired to evade U.S. sanctions on Iran and North Korea. However, in addition to the $1.4 billion fine and escrow. The U.S. Department of Commerce has yet to "work out the details". ZTE must still hire a "compliance monitor" and overcome Congressional resistance in the U.S.

 

DIGITIMES reports that China's PCB industry supply chain is capitalizing on 5G business opportunities. The industry is flush with cash and expanding.

 

Shennan Circuit was listed last year, and raised $191million in funds which it used to expand its HDI capacity. Jingwang announced that it will publicly issue $148 million of convertible corporate bonds after it officially passed the approval of the China Securities Regulatory Commission this monh. They are expected to use these funds to expand production.

 

In addition to capacity increase, domestic players is also rushing to catch up in technologies and are actively seeking international orders and cooperation opportunities. Shennan Circuit, which is mainly based on communication-related products, is one of Huawei’s major suppliers is also following up and developing 5G related products.

 

Yidun Electronics has been cultivating automotive electronics for many years and has gradually obtained certifications from major international companies such as Bosch and Continental.

 

Precision electronics manufacturer Dongshan Precision officially entered the Apple supply chain after acquiring the U.S. flexible circuit fabricator MFLX (Multi-Fineline Electronix) in 2016. The profitability has been greatly reversed. The net profit in 2017 reached $78 million, a 16-fold increase from 2015.

 

This month, Suzhou Dongshan Precision Manufacturing announced that it plans to buy Multek, a PCB business group of Flextronics (FLEX), for $292 million.

 

The complete "industrial cluster" is also one of the reasons for the rapid development of domestic PCB factories, from the upstream copper foil substrate factory to the downstream assembly plant, such as the upstream copper foil substrate factory Shengyi Technology, glass fiber cloth factory Jinan Guoji, equipment Factory Dazu CNC, etc., are excellent manufacturers with a single quarter of $150 million revenue.

 

Elite Material expanded its copper clad laminates monthly production capacity to 600,000 sheets to meet demand from investment clustering effect of PCB manufacturers in Huangshi City, Hubei Province, China.

 

The Jiangxi Copper Group has developed China’s first circuit board copper foil for 5G communications.

 

ITEQ, TAIFLEX, and Fulltech Fiber Glass are engaged in factory expansion projects of PCB upstream raw material plants to cope with increasing demand from automobiles, 5G communications, and cloud storage servers.

 

As for the recent trade war issue, because the latest tariff list contains many electronic products, whether Huawei will become the next target for the U.S. government is still inconclusive, so the outside world is also very curious about whether the operation status of the domestic PCB factory will be affected. At present, most manufacturers are still cautious and neutral. Shennan Circuit said that at least the company’s operations have not changed significantly at this stage, but the subsequent development of the situation still needs to be observed.

 

IC Insights forecasts that China-headquartered companies will spend $11.0 billion in semiconductor industry capex in 2018, which would represent 10.6% of the expected worldwide outlays of $103.5 billion.  Not only would this amount be 5x what the Chinese companies spent only three years earlier in 2015, but it would also exceed the combined semiconductor industry capital spending of Japan- and Europe-headquartered companies this year.
 

Although China-headquartered pure-play foundry SMIC has been part of the list of major semiconductor industry capital spenders for quite some time, there are four additional Chinese companies that are forecast to become significant semiconductor industry spenders this year and next—memory suppliers XMC/YMTC, Innotron, JHICC, and pure-play foundry Shanghai Huali.  Each of these companies is expected to spend a considerable amount of money equipping and ramping up their new fabs in 2018 and 2019.

Due to the increased spending by startup China-based memory manufacturers, IC Insights believes that the Asia-Pac/Others share of semiconductor industry capital spending will remain over 60% for at least the next couple of years. Source: The MacLean Report

 

SEMI  announced the formation of the SEMI Electronic Materials Group (EMG), a new collaborative technology community that combines the former Chemical& Gas Manufacturers Group (CGMG), the Silicon Manufacturers Group (SMG) and other SEMI member segments to better serve the interests of the electronics materials industry. The group is open to SEMI Members involved in materials manufacture, distribution and services throughout the microelectronics industry.

 

Electronic materials have played an increasingly important role in technology innovation as electronics move from IT-centric to ubiquitous computing across consumer, industrial and data management markets. The market size for wafer fabrication materials ($28 billion), semiconductor packaging materials ($19 billion), and electronics assembly materials ($20 billion) reflects the critical importance of materials to the growth and expansion of the worldwide electronic manufacturing ecosystem.

 

To help manage growing interdependencies across the microelectronics supply chain, the EMG now has laid claim to represent all materials makers, aligning with the SEMI mission to serve members across the microelectronics design and manufacturing industries.

 

The EMG will continue its mission to facilitate collective efforts on issues related to the microelectronics materials industry that are more effectively addressed by an industry association than by individual companies.

 

Taiwan Semiconductor Manufacturing (TSMC), the world’s largest contract chipmaker, plans to start mass production using the advanced 5-nanometer manufacturing process late next year or in early 2020, according to CEO and vice chairman C.C. Wei .

The company will spend $24.75 billion to build a plant in the Southern Taiwan Science Park in Tainan.

 

The plant’s annual production is expected to surpass 1 million 12-inch silicon wafers .

As of the end of last year, TSMC employed  6,145 researchers, a nearly three-fold increase from a decade earlier, with research funding last year totaling $2.652 billion.

The firm earlier this year began mass production on the 7-nanometer process, products of which are to be mainly used in artificial intelligence applications, graphics processing units, 5G telecommunications equipment and application processors, The company’s total output for this year is forecast to reach 12 million 12-inch equivalent wafers, with products on the 7-nanometer and 10-nanometer processes to double from last year.

 

JPCA

 

Massamitsu "Matt" Aoki has provided us with a report on the JPCA show with many pictures. The report is in Japanese. The pictures focus on FPC materials, manufacturing, MSAP, and wearables.

 

Write us if yoiu would like a copy.

 

....and last, but certainly not least

 

The EIPC had record attendance as it celebrated its Golden Anniversary at its 50th Anniversary Conference in Dusseldorf, Germany. A wide range of topics covered the global industry, new facilities, and technology changes.The 2-day event also featured such industry icons as Walt Custer and Hans Friedrichkeit.

 

July-August 2018

 

I was going to take a break and skip July's issue of Weiner's World, but there is just too much going on, so I'll combine it with August's and write as the summer passes and major events unfold.

 

We wonder what the unintended consequences of the duty war will be in both the electronic and automotive industries. 12,000 jobs could be negatively impacted just on the autos built in the U.S. and shipped to China.

 

What happens to the integrated global supply chain of the printed circuit fabrication and assembly businesses when large tariffs are suddenly interjected into the system? No one really knows. Peter Bigelow, President and CEO of IMI addresses this issue in his column in his July 25 column of Printed Circuit Design and Fab. Check our Comments & Discussion page for how he addresses the situation.

 

The U.S. Trade Representative (USTR) released a 25% tariff on $16 billion in imports from China, including 29 tariff lines that represent the heart of the semiconductor industry. These tariff lines include semiconductor products such as machines and spare parts used to make wafers, flat panel displays, masks and chips, and will cost SEMI’s 400 U.S. members an estimated more than $500 million annually in additional duties.

 

This trade action is on top of the already imposed $34 billion U.S. tariff list, which will cost SEMI’s U.S. members tens of millions of dollars annually. In the coming days, USTR will publish details on how U.S. companies can request the exclusion of products from the $16 billion tariff list, much as it did for the first round of $34 billion.

 

In a swift retaliation, China announced a 25% tariff on $16 billion in U.S. exports, including products vital to semiconductor manufacturing such as chemicals, test equipment and other parts. Both U.S. and China tariffs took effect on August 23.

 

The EU made concessions to avoid a trade war with the U.S.

 

The U.S. lifted the ban on selling components to ZTE while threatening new import taxes.

 

Australia banned Huawei from its 5G network citing security risks..

 

China's approval delays killed the Qualcomm $44 billion deal, for NXP (2 years in the making).  

 

American PCB makers (and others) scramble to apply for waivers on new (up to 25%) duties for equipment and supplies that will ship from China in August. The PRC countered by lowering the value of its currency and adding new duties of its own. But the PRC cannot lower the currency too far as it would negatively affect it's overseas purchasing ability.

 

How much will inflation in the U.S. increase as companies prepare to raise prices to absorb new duties?

 

Several economies appear to be poised to stall.

 

Mexico's outgpoing president agreed to a new bilateral trade agreement with the U.S. to replace NAFTA. It must still pass the U.S. Congress and Mexico's incoming new president. Canada now seems willing to negotiate a "new NAFTA".

 

From an ex-pat in Zuhai

 

Shops are busy over here in segments. It seems that non-Chinese companies are buying as much inventory that they can get, and having it shipped to the US prior to any potential duties that may be added for PCB’s near the end of the year.

 

We are going crazy qualifying new copper sources due to the copper shortage created by the battery folks. Many specialty copper foils are being EOL’d.

 

Employee salaries are moving up here. More board shops are being built in Zhuhai, others will start construction soon.

 

Taiwan-based PCB makers in China and Taiwan are forecasted to reach $20.5 billion in 2018, an increase of @5 over 2017 according to the Taiwan Printed Circuit Association (TPCA).

 

Buyer’s nightmare

 

All sorts of electronic parts are on allocation and prices are on the rise. Everything from capacitors to hard disk drives is in short supply with no end in sight according to EBN Eidtor-in-Chief Lynne McKeetry. These include MLCCs, TVS Diodes, Schottky Diodes, Zener Diodes,MOSFETS, CPUs, and disk drives.

 

I wonder who will actually analyze the situation and write this report

 

U.S. President Donald Trump signed legislation that will bring greater focus and long-term leadership to the government’s interests in military electronics.

Specifically, Section 845 of the FY2019 National Defense Authorization Act (NDAA) – passed by the U.S. House and Senate last month – calls on the Secretary of Defense, in consultation with the Executive Agent for Printed Circuit Board and Interconnect Technology (based at the Naval Surface Warfare Center in Crane, Indiana) and the Director of the Office of Management and Budget (OMB), to prepare a report to Congress by January 2019 on the health of the U.S. defense electronics industrial base. 

 

The report must include an examination of the department’s partnerships with industry and a plan to formalize the long-term resourcing and mission of the Executive Agent, which is the principal Defense Department entity charged with assuring the security and availability of printed circuit and interconnect technologies for defense electronics.

 

End of an era- the last of the independent American Cu clad laminators

 

Park Electrochemical has entered into a definitive agreement to sell its electronics business to AGC Inc., formerly Asahi Glass for $145 million in cash.

 

Park's Electronics Business develops and manufactures digital and RF/microwave printed circuit materials principally for the telecommunications and internet infrastructure, enterprise and military/aerospace markets, and includes manufacturing facilities in Singapore, France, Arizona and California and R&D facilities in Arizona and Singapore.

 

AGC Group employs approximately 50,000 people worldwide and generates annual sales of approximately $13.3 billion.

 

Park's electronics business was founded in 1961, when Park's Jerry Shore and Tony Chiesa bought a Connecticut firm called *New England Laminates Co. (Nelco) out of bankruptcy for a reported $200K. Brian Shore, Park Chairman and CEO said that the company supposedly developed the world's first multilayer circuit board in 1962 for a large OEM which needed to "take weight out" of ICBM rockets.

Park will retain its aerospace business following the close of the deal.

 

*Gene Weiner was president of New England Laminates in the early 1980's.

 

Moving up

 

China's Huawei has replaced Apple as the number 2 smartphone supplier in the world. It has now set its sights on passing Samsung to become number one in the world by year-end.

 

Automotive

 

How great are the required changes in automotive electronics as electric vehicles take hold and autonomous driving begins its acceptance in select areas ?

 

The answer is that they are huge and that there are multiple approaches.  Current vehicle networks are fairly simple. However the demands placed upon cars, trucks, buses etc. to quickly and virtually instantaneously process the huge increase to process data generated by sensors and new controls will most likely require a complete redesign of of vehicle system architecture. Todays' supplemental networks, e.g., adding 100 Mbps Ethernet cabling just will not suffice. High speed networks and computers of greater than 2.5 Gbps will be needed. Safe backup systems will be needed. All of the aforementioned will require new cooperative programs and consortia to attain the desired goals.

 

The European plug-in electric car market reached the milestone of cumulative sales of one million units according to EV-volumes.com, which summed up sales through the end of June 2018. The first million in Europe comes ahead of the U.S., which even after July is just above 900,000. China reached the 1,000,000 first, back in 2017.

 

How can one get a glimpse on opportunities that exist and approaches in which one can participate? Attend the IPC Executive Forum on Automotive Electronics in San Diego January 28, 20019!

 

As TTM nears annual sales of $3 billion its management sees exploding demand for printed circuit boards in modern cars as the electronic content per vehicle keeps expanding. According to CEO Tom Edman, the average circuit board content per car is growing from $62 in 2016 to $75 in 2020, and some hybrid and electric vehicles already carry twice that targeted amount per car today. TTM is "reported" to have begun to feel the impact of the new duties on the boards it makes and ships fom China.

 

There are now 487 electric-vehicle makers in China (the number will most certainly be different by the time you read this). Their proliferation is being spurred by Beijing’s call for the country to become a world power in electric-vehicle technology and by local governments eager to jump on the bandwagon. Source WSJ

 

Activities are also ramping up for our Executive Forum on Automotive Electronics to be held at IPC APEX Expo in San Diego.

 

In the U.S. Ford has established an autonomous driving vehicle unit.

 

Four Toyota Motor group firms will form a joint venture to combine their self-driving technologies to better compete with automotive component giants such as the Bosch Group according to the Nikkei business daily. The new company, to be set up by Denso, Aisin Seiki, Jtekt, and Advics, will bring together technologies such as braking and steering. Denso is expected to hold the majority stake.

The new firm, to be launched by the end of this year, will primarily supply Toyota but also target European, U.S. and Chinese automakers, the Nikkei said.

 

We were told of this change in strategy and direction to cut losses by a Nanya VP last December

 

Taiwan-based Nanya Printed Circuit Board is striving to lower its operating losses by developing high-margin products such as those for automotive electronics, 5G and AI applications, according to a Digitimes report. Nanya PCB remained unprofitable in the first half of 2018. The firm expects a seasonal pick-up in demand to reduce its losses for all of 2018

.

This should be interesting considering current the current trade situation between China and the U.S.

 

On August 28-30 NEPCON South China will cohost its annual event in Shenzhen with Automotive World China, Smart Factory & Automation Factory Expo 2018, and Shenzhen 2018 Circuit Sourcing as component shortages incease along with their prices.

 

Semiconductor

 

The worldwide semiconductor market reached an all-time high in 2017 up 21.6% in 2017 to $412.2 billion. 2018 is forecasted to grow 15.7% to $477 billion. Printed circuit markets have historically followed changes in the semiconductor market by 3 to 6 months.

 

Did you know that the IPC’s 2,300 U.S. member company sites employ more than 2 million people throughout the United States?

 

The IPC's Executive Forum on Automotive Electronics has over a half dozen industry experts from around the world that will address challenges and opportunities the day before Tesla's CTO provides the keynote speech of IPC APEX EXPO 2019.

 

September 2018

 

What will the electronic interconnect packaging market look like in 2019? Will Mexico rise again, stronger than before with the new trade agreement?

 

The latest round of announced U.S. tariff hikes includes bare printed circuit boards and copper clad laminates. U.S. buyers of bare boards from China started to pay the new tariff this month. Customs and Border Protection (CBP) expects to increase this tariff from 10% to 25% on January 1, 2019.

Beijing has begun to collect taxes of 5% or 10% on a $60 billion list of 5,207 American goods and promised further counter measures.

 

America's original equipment manufacturers (OEMs) must now re-evaluate their manufacturing strategy, in light of recent tariff announcements and the new USMCA trade agreement. From where will they get their bare boards? Will they depend upon their EMS providers or specify sources for their supply chains?

Boards assembled in Mexico not only costs less than those made in China, but they also do not incur a tariff on components imported from China for assembly in Mexico. That coupled with increased availability of indigenous qualified managers and technically educated workers in recent years makes it worth another look for American electronics supply chains.

 

Taiwanese tech companies are said to be leaving mainland China in droves as the U.S.-China trade war threatens to disrupt supply chains, according to various Taiwan media reports.

Some Taiwanese firms have begun pouring money into domestic facilities. Delta Electronics, a global leader in the manufacture of power supply units, will invest $87.9 million in a 30,000-square-meter new factory in the Southern Taiwan Science Park. It also recently purchased a$48.8 million site to build a new R&D center near its Taipei headquarters.

Career Technology, PCB maker for the iPhone, has begun seeking land in Taiwan to build a new facility.

Bloomberg reported that Taiwan-based iPhone maker Pegatron said it would add capacity in the Czech Republic and Mexico.

 

The TPCA SHOW 2018 on Oct. 24th-26th at Taipei Nangang Exhibition Center coupled with IMPACT (International Microsystems, Packaging, Assembly and Circuits Technology Conference) should be a “beaut”!

 

That was fast!

 

I just received my first new offer of duty free bare PCBs from Taiwan! The Bare Board Group told me at the Design-2-Part show in Marlborough, MA that 75% of their boards for clients come from Taiwan.

 

Was there any doubt?

 

Canada, at the eleventh hour, agreed to join Mexico and the U.S. in a revamped trilateral trade deal. The revised agreement, formerly called NAFTA, is named the United States-Mexico-Canada Agreement, or USMCA. The two countries really need each other economically. Canada is by far the No. 1 destination for U.S. exports, and the U.S. market accounts for 75% of what Canada sells abroad.

 

Along with the new trade deal, “side letters” allowing the two nations to mostly dodge auto tariffs have been signed. These letters stipulate that Canada and Mexico can continue sending about the same number of vehicles and parts across the border free of charge, regardless of whether auto tariffs go into effect down the road. Only parts above that quota could face tariffs.

 

We invite Canada's PCB and FPC fabricators, assemblers, and other members of the automotive electronic supply chain to participate in the IPC's Executive Forum on Automotive Electronics January 28 in San Diego.

 

Did you know that the IPC’s 2,300 North American member company sites employ more than 2 million people throughout the region?

 

The IPC's Executive Forum on Automotive Electronics more than a half dozen industry experts from around the world that will address challenges and opportunities the day before Tesla's CTO provides the keynote speech of IPC APEX EXPO 2019.

 

Who said, "Relying on the global industry may no longer be sustainable," when referring to the semiconductor industry's supply chain? Most recently, Yao Lijun, founder of Konfoong Materials (KFMI) China’s largest maker of the ultra-pure metal and other key chip making materials. Before that, yours truly, after reading "The Japan That Can Say No: Why Japan Will Be First Among Equals". At that time Shintaro Ishihara, Minister of Transport, and Sony co-founder and Chairman Akio Morita claimed that the world had come to depend on Japanese technology, especially in semiconductor production.

 

Semiconductors

 

Taiwan leads the world in semiconductor foundry, package and test services and is second in chip design. SEMICON Taiwan, attended by more than 45,000, featured more than 2,000 booths and 680 exhibitors from around the world.

 

Taiwan’s Ministry of Science and Technology (MOST) is aggressively moving to pool cross-domain academic forces to help the semiconductor sector break through bottlenecks through its ongoing Semiconductor Moonshot Project, to achieve as annual semiconductor production value of $98.23 billion by 2021. 62 semiconductor firms are focusing on the development of advanced processes and SoC (system on chip) solutions in cooperation with the academic sector.

Taiwan Semiconductor Manufacturing Company (TSMC), for instance, is developing 3nm process technology in collaboration with a research team from National Taiwan University. MediaTek and National Tsing Hua University have teamed up to develop neuromorphic AI visual chips, and LandMark Optoelectronics and National Chiao Tung University have jointly initiated the development of CMOS-based auto-use optical radar, while Novatek Microelectronics has joined forces with National Cheng Kung University to develop IoT chipsets boasting low power consumption. These programs and others will have government support.

 

How will China counter? More importantly, what will the U.S. do to get ahead of the curve?

 

October 2018

 

China's exports to the U.S. surged 4.7% from August's shipments to a record high of $34.1 billion in September. How much was due to early month shipments trying to beat the timetable for increased duties on PCBs and components?

 

October's and November's numbers are sure to fall if there is no progress in the trade dispute with the U.S. -Some mainland companies are already reporting drops in production levels for October-November as more "Western" customers seek alternate 2nd sources in Vietnam, Mexico, and Eastern Europe.

 

The IPC launched an Electronics Reliability Council for the transportation industry. The IPC Hall of Fame Council's Executive Forum on advancing Automotive Electronics at IPC APEX EXPO 2019 will present several papers on automtive reliability - including one from China.

 

Meanwhile, Taiwan's Ministry of Economic Affairs' Investment Commission and Department of Investment Services have set up a joint task force to help firms trying to bring production back from China solve problems in locating factory sites and securing power, utilities and workers.

 

Taiwan's PCB industry revenue growth unexpectedly dropped to 4.3% during September.  The rigid circuit board segment had a record month for shipments during August; however, shipments during September declined by 3.3% compared with the previous month.  This was the first month to post a decline since the Chinese New Year vacation. Flexible circuit manufacturers announced an increase in revenue; however, growth rates are slowing.

 

There are significant differences among printed circuit manufacturers relative to volume.  Rigid board manufacturers Unimicron and Nanya PCB reported double digit growth during September, while Compeq, Chin-Poon, and Flexium posted negative growth. The largest flex circuit manufacturer, ZD Technology, reported that growth was flat for September.

 

Apple is the largest business contributor for the electronics and circuit board industry in Taiwan. The manufacturers in the supply chain are anxious about sales for the new iPhone.

 

The retail price for the new iPhone X is much higher than market analysts expected.  Manufacturers are leaning towards a pessimistic opinion for iPhone sales during Christmas due to the high retail price, and are considering decreasing their inventories.  Source: DKN Research

 

Taiwan-based connector maker Foxlink is shifting its manufacturing out of China, moving some production lines to Yangon, Myanmar and some back to Taiwan to minimize the impact of the US tariffs and rising labor costs.

 

How should industry leaders like Tim Cook, who serves on the board of Tsinghua University School of Economics and Management, deal with the trade crisis when 25% of its sales are in China? Is there a viable solution for the world's electronics supply chain in sight?

 

I wonder which photo resist is used

 

Japan's Canon has introduced a new photolithography system with a resolution of 2 micron line/space for 8th generation FPD lines. (2200 x 2500 mm).

 

JUKI has started its partnership activvities with Hitachi to optimize the productivities of their circuit board manufacturing lines introducing IoT.

 

November 2018

 

Activity for reshoring of electronics manufacturing and assembly, or at least moving away from China, is gaining momentum due to the intesifying "trade war" between the U.S. and China, as well as because of rising freight costs. The shortage of skilled and semiskilled workers must also now be weighed into the equation when evaluating options. The situation is seen to be providing a major boost for robtics and increased usage of IoT to help offset the current challenges.

 

China will give its supreme court a greater role in intellectual property cases regarding patents and trade secrets, starting in January, as it aims to increase transparency and consistency in response to international criticism. Protecting intellectual property rights is a key sticking point in the Sino-American trade war.

 

China's economic growth continues to slow. Smartphone shipments dropped 15.2% to 100.6 million units in the 3rd quarter of 2018. China’s imports of ICs, chips that go into smartphones and other electronic devices, as well as high-end industrial and military products, have also declined. The PRC imported $29.18 billion worth of integrated circuits in October, down 16.4% from September.

 

Early in the month China's President Xi used the first China International Import Expo in Shanghai to announce "easier market access and some reduced tariffs" to celebrate the 40th anniversary of reform and opening up. He promised to take other steps to foster "free trade" and spoke against protectionism. Xi's speech appears to be a hopeful gambit in the negotiations with the U.S. It was favorably viewed by executives of the chairman of Johnson & Johnson China, the chief executive of Siemens China, a member of the executive board of Wacker Chemie AG as well as Roberto Azevedo the sirector-general of the World Trade Organization and Christine Lagarde, managing director of the International Monetary Fund.

 

The global conformal coating market will approach $16 billion by 2024. It is currently over $10 billion according to a study by California's Hexa Research.

 

China's Xiaomi, Oppo, and Vivo captured a total of approximately a quarter of the global smartphone market in the first half of 2018, according to data from the market research firm IDC.

 

Smartphone maker Vivo's existing manufacturing campus of over 50 acres in Greater Noida, India has completely localized production. It invested $43 million to make its own printed circuits there.

 

The global automotive electronics market size is expected to reach $410.13 billion by 2025, according to a study conducted by Grand View Research. Growth is forecasted to be a CAGR of 8.6% during the forecast period. Growing adoption of safety systems to curb road fatalities and increasing demand for state-of-the-art vehicles are expected to fuel the automotive electronics market.

 

It was not easy!

 

Taiwan-based PCB maker Nan Ya has reported sales of $89.89 million for October, up by 5% from the previous month, and up by 20% over October 2017. For the first 10 months of 2018 Nan Ya PCB revenues reached $773.8 million, up by 7.4% compared with the same period last year.

 

News from Taiwan

 

Unitech Printed Circuit Board joined the PCB A-Team project led by Taiwan Printed Circuit Association last year to become a pioneer for introducing smart manufacturing into the PCB industry. After more than a year of team integration and communication, the foundation engineering is gradually ending, and the project is expected to take effect next year. While actively entering into smart manufacturing, Unitech is considering many market factors. The Deputy General Manager LI, LI-CHUN of Unitech said that with increasingly complicated electronic product designs in the future, PCB processes are facing severe challenges and has no choice but to implement smart manufacturing.

 

DIGITIMES reports that most Taiwan-based PCB manufacturers are cautious about their business outlook for 2019 and will slow down their capital spending orginally slated for expansion projects. Fabricators believe that demand will decline due to rising economic uncertainty caused by the U.S.-China trade war.

Tripod Technology said it will focus on ramping up its capacity for multilayer boards to increase the added-value of its PCB products, while also deepening its deployments in the high-margin automotive boards. It said that its new plant being built in Hubei, China will also be dedicated to the production of high-end boards.

Compeq Manufacturing said that it has put on hold its original plans to ramp up the capacity of its plant in Chongqing, China due to lower order visibility for 2019.

Apex International, a Taiwan based PCB firm with facilities in Thailand, is an exception.

It will start a third-phase expansion project of its second plant in their during Q1  as it has a backlog of orders that will keep its plants full through 2019. Its geographic advantage has resdulted in increased activity from the EMS and network equipment sectors.

Automotive electronics

 

The automotive electronics market will grow at 9.1% CAGR from $226.5 billion last year to $490.6 billion by 2026 according to a report by Polaris Market Research!

 

Volkswagen plans to spend $50 billion on electric cars, autonomous driving and new mobility services by 2023. It will also explore closer cooperation with Ford. The company will retool three of its German plants to build electric cars. It will also explore alliances with battery partners and rival carmakers.

 

Taiwan's Advanced Printed Circuit Board’s (APCB) plant in Thailand will start small-volume shipments of automotive PCBs to Germany’s Continental Group next month.

 

Has the printed circuit industry morphed into an oligopoly? What do you think? Let us know!

 

December 2018

 

Allied Market Research's report "HDI PCB Market by End-User (Consumer Electronics, Automotive, Industrial Electronics, IT & Telecommunications and Others) and Application (Smartphone & Tablet, Laptop & PC, Smart Wearables and Others): Global Opportunity Analysis and Industry Forecast, 2018-2025"  states that the global HDI PCB market generated $9.5 billion in 2017, and is expected to reach at $22.3 billion by 2025, growing at a CAGR of 11.1% from 2018 to 2025. Increased utilization of HDI technology in automobiles is predicted to offer new opportunities to the market.

 

Busy, but....

 

The International Printed Circuit & APEX South China Fair presented by the HKPCA and the IPC was busy. There was a lot of interest and activity, but save for multilayer presses, many orders for new equipment were put on hold as local business declined due to the trade war and the future seemed uncertain. PCB fabricators appear to be overbuilding giant facilities even though existing facilities were running at 75% or less of capacity. Firms scrambled for short term solutions to find "affordable" alternate sources for their supply lines. Even some Chinese firms sent teams to Mexico to seek out new factory sites.

I believe that Vietnam could be a big winner as a result of these trade disputes - even if the U.S. and China settle their differences soon.

 

There must be a better way!

 

How does one cover a show with more than 2,800 exhibitors? Why not join other 125,000 visitors and attend NEPCON Japan 2019 January 16-18 at Tokyo Big Sight and find out? Or, How about CES 2019? More than 4,500 exhibitors will host 180,000+ visitors in Las Vegas January 8-11. You will need a great deal of pre-planning and a team even if you only focus on seeing all the specific items of interest to you.

 

Double Whammy? Triple Whammy? Or ????  Long term versus short term!

 

How does one plan for the future given the current turbulence in the electronics (and other) industries when one considers the effects of claimed activities of ZTE and Huawei, the trade war between China and the U.S., component shortages, shifting supply chains, and the impending annual Chinese New Year shut-down?

 

Dateline December 1

 

Someone asked, "What Happened During the G20 in Argentina?"

 

The United States and China called a truce in their trade war at a dinner meeting on Saturday December 1 after President Trump agreed to hold off on new tariffs and President Xi Jinping pledged to increase Chinese purchases of American products. The two also set the stage for more painstaking negotiations to resolve deeply rooted differences over trade.

 

...and

 

Canada arrested Huawei’s CFO on December 1 (now out on bail - December 13) in response to a U.S. request for extradition, sparking outrage in China.

 

yet, on the 6th...

 

China’s commerce ministry said that the ultimate goal in Sino-U.S. trade talks is to remove all tariffs, adding that the recent meeting between U.S. President Donald Trump and Chinese President Xi Jinping had been successful. Source: Reuters Beijing

 

Then President Xi Jinping’s government said that it would cut tariffs on U.S. cars to 15% from 40%. China also announced that it would put more effort into protecting intellectual-property rights.

 

China-based OSAT (outsourced semiconductor assembly and test) firms are gearing up to tap into medium to high-end packaging fields, including the flip chip (FC) packaging segment where they believe they can technologically catch up with Taiwan counterparts in one year.

Tongfu expects to gain CPU packaging orders with its FC-BGA process technology. It has completed a 12-inch fan-out packaging line to assemble medium- and high-end CPUs. Tianshui Huatian has SiP (system in package) orders from Huawei for processing fingerprint identification modules adopted for its smartphones.

Changjiang has developed FC-PoP (package on package) technology for processing handset application processors. Its subsidiary Changdian Advanced Packaging has become China’s largest Fan-in WLCSP (wafer level chip scale package) service provider.

However, the market for high-performance chip packaging is still dominated by Taiwan.  Source Digitimes

 

Everything you need to know about ECUs

 

The Asia Pacific automotive electronic control unit (ECU) Market which was more than $35 billion last year is expected to surpass $55 billion in 2024. A list of Asia Pacific’s key players in this field includes APTIV (Delphi Automotive), Atmel Corporation, Bosch Group, Continental AG, Hitachi Automotive Systems, Lear Corporation, Infineon Technologies, Hyundai Mobis, Texas Instruments, Panasonic Corporation, and ZF Friedrichshafen AG.

Graphical Research has issued a new report on this topic with the title “Asia Pacific Automotive Electronic Control Unit (ECU) Market Size By Capacity, By Vehicle Type, By Mode, By Propulsion Type, By Application, industry Size, Share, Growth Trends & Forecast, 2018 - 2024”.

 

Microtek Laboratories China has added HAST CAF testing at 1000 volts for automotive and transportation applications. The HAST chamber’s ability to maintain 85% Relative Humidity at temperatures over 100^oC at up to 1000 volts, generates the toughest CAF test environment currently possible for base material and PCB reliability evaluation.  According to Bob Neves, Chairman and CTO of Microtek, “We have successfully completed 2 high voltage CAF tests in our HAST chambers.  The automotive and transportation industries are continuing to push the limits of current test technology in an effort to further accelerate and understand the reliability of base materials and PCBs.”

Microtek’s commitment to automotive and transportation testing also includes the use of 10 thermal shock chambers equipped for “Single Hole” or “Daisy Chain” reliability testing along with 28 humidity and HAST chambers equipped with 256 channels of CAF/ECM/SIR testing capability up to 2000VDC.

 

Get a first-hand view of automotive reliability testing in China by attending Neves' presentation at the IPC's Executive Forum on Advancing Automotive Electronics January 28 at IPC APEX EXPO 2019.

 

Vietnam rising

 

Vietnam’s growth accelerated in the fourth quarter, as stronger manufacturing output helped the economy remain one of the world’s best performers. Gross domestic product growth for the full year was 7.1%.

“Manufacturing is a bright spot of the economy,” said Nguyen Bich Lam, head of the government’s General Statistics Office.

The government is taking advantage of the U.S.-China trade tensions to boost the nation’s profile as a manufacturing and export powerhouse, selling everything from shoes to smartphones. Trade accounts for about twice the nation’s gross domestic product—more than any country in Asia apart from Singapore. Exports increased 13.8% this year, with sales of electronics goods surging.

 

In his last comments of 2018 on the PCB industry Dr. Hayao Nakahara of N.T. Information stated that Vietnam's "...PCB production value already exceeds that of the U.S. and Canada put together and far exceeds that in Europe." Circuit fabrication there will soon surpass that of Thailand's. There is now mSAP volume capability in Vietnam and it is increasing.

 

Have you registered for IPC's Executive Forum on Advancing Automotive Electronics? There is still time to do so!

 

This not-to-be-missed event on January 28, 2019 at IPC APEX EXPO 2019 is designed for executives in the global electronics systems supply chain. The forum's all-star lineup features such worldwide notables as Dr. Udo Welzel, Team Leader for Assembly and Interconnect Technology Integration for High-Performance Logic Automotive Electronic Control Units of Robert Bosch GmbH, who will present "Enabling Connected, Electrified and Automated Mobility: Challenges for Assembly and Interconnect Technology". Also featured is Alex Stepinski Vice President of GreenSource Fabrication LLC and Managing Director of AWP GmbH, who will discuss the world's first “green” 4.0 PCB fabrication facility with single piece flow in-line automated facility with 100% layer traceability for advanced HDI/IC substrate/FPC production, plus its implications for automotive electronics.  

 

Bob Neves, Chairman/CTO of Microtek Labs China and member of the IPC's Board of Directors will present "PCB Reliability Tesing for Automotive Electronics - The China Story". Joe D'Ambrisi, Senior Vice President of MacDermid Alpha Electronics Solutions will present "The Global Outlook for Specialty Chemicals & Materials in Automotive Electronic Packaging".

 

Carlo Favini, founder of Elga Europe will present "Developing a New Dry Film Photoresist to Meet Automotive Very Fine Line Circuit Needs - a Multicompany-Multinational Cooperative Program" (co-authored with Giorgio Favini, CEO Elga Europe).

 

Dwight Howard, Manager, Electrical Engineering, North America & Asia-Pacific Product Development Infotainment and Driver Information (IDI) PBU, Electronics & Safety Division, APTIV LLC (formerly: Delphi Automotive Systems IDI/NA Division) will discuss "Integrated Intelligent Transportation and Key Enablers". 

 

Randy Hierbaum, Vice President of Sales, Optimal+ will present "Striving for Zero DPPM" He will discuss working on quality excellence programs with a Tier 1 provider while improving process cycle times. Alun Morgan, Technology Ambassador of Ventec and Chairman of the EIPC will discuss providing a simple and universal adoption route for all suppliers with "Developing Universal Solutions to Automotive Materials Challenges."

 

Larry Wilson III, leader of Nexteer's Automotive Global Electronics Costing Team will discuss creating cost models with suppliers and investing costs of new technologies. He will provide forecasts of future costs of automotive electronics.

 

Dr. John Mitchell, IPC President and CEO, will initiate the meeting with a high level, presentation, "Freeway to the Future: Automotive Elecronics Past/Present/Future."

 

Registration information for the Executive Forum on Advancing Automotive Electronics is available online at www.ipcapexexpo.org