Margin Call

Between rising commodity metals prices and end-product pricing pressures, solder suppliers are getting crushed. In talks at Productronica on Wednesday, Pat Trippel, president of Henkel’s Electronics and Aerospace units, allowed that eventually inflation “will affect the overall market.”

“Not everything is a drop-in equivalent,” Trippel told this reporter. “Henkel has been able to get a premium because of the higher level of support it adds,” plus the company’s vertical integration on powder development and distribution.

In fact, customers are concerned that suppliers might not be able to withstand the crunch, he said. Trippel predicts contraction will be ahead among solder suppliers.

Asked about the company’s underfills, global marketing manager Doug Dixon noted Henkel is gaining traction in the consumer electronics sector, primarily with handhelds and products with higher processing speeds.

The first two days of the four-day show have been busy, a fact not lost on exhibitors. We noticed a large number of suppliers of vapor phase soldering, which is primed for a certain uptick among manufacturers looking for a lead-free solution but at lower soldering temperatures (roughly 230C). Some of the exhibiting suppliers include Asscon, Rehm and IBL.

We’re also seeing accommodations to China’s influence on global pricing. Vitronics-Soltec, for example, is now offering a 12-zone reflow oven (model MR993) for 45,000 euros, and the Delta 3 wave for 50,000 euros. Both machines are built in China and share most standard features and specifications with their more expensive brethren. Vitronics is expanding in China, and is said to be in talks to enlarge its footprint roughly three times the current size. The Netherlands operations will remain a global R&D and new product development hub, as well as a demo site for European customers.

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About Mike

Mike Buetow is editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He is also vice president and editorial director of UP Media Group, for which he oversees all editorial and production aspects. He has more than 20 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow