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

If You Thought Foxconn Is Just a Manufacturer …

… Think again.

Foxconn, the world’s largest EMS/ODM, with annual revenues now topping $200 billion (!), said this week it now has more than 54,000 invention patents worldwide.

Some 63% of them have been issued in the US (17,600 patents) and Japan (16,200).

Among the most common technology areas:

  • Computer accessories 17%
  • Semiconductors 14%
  • Processing and detection technologies 13%
  • Robots and optoelectronics equipment 12%
  • Display equipment 11%

If you wonder what the end-game is, think worldwide monopoly.

What’s Old is News

God love the Internet.

Nothing ever ages. Or, better said, anything can be reborn in a moment.

Take for instance, today’s report in DigiTimes.

“India officials are allegedly subsidizing US$10 billion in semiconductor manufacturing, according to Reuters citing knowledgeable sources.”

A quick review of Reuters stories over the past 90 days show no such reporting, however.

Is DigiTimes wrong?

Nope. But one must go back to Mar. 31 to find the piece: “India is offering more than $1 billion in cash to each semiconductor company that sets up manufacturing units in the country as it seeks to build on its smartphone assembly industry and strengthen its electronics supply chain, two officials said.”

This happens a lot, actually. I got a kick out of a recent recycling by multiple industry news aggregators that claimed Epec has acquired NetVia.

“Hmmm,” I thought. “That’s weird.” Because I am pretty confident that already happened.

And sure enough, that deal dates to November 2020.

What happens is that aggregators use alerts to find news, and crawlers sometimes bring old information back to the surface. Unsuspecting or inattentive editors grab the “new story” and link to it for that day’s newsletter.

And everything old is new again.

The ‘Seers’

It’s always interesting when the seers, also known as the industry’s journalists, get together for a chat.

Hosted by Mike Konrad, I joined Trevor Galbraith, Phil Stoten and Eric Miscoll to discuss post-pandemic production, innovations in our industry, supply chain and labor shortages, and of course, some predictions.

The podcast can be listened to or downloaded from PCB Chat here: https://upmg.podbean.com/e/rm-76-meet-the-press/

Or, if you are really brave, you can see us in action here:

EMS on Overdrive

The EMS industry has posted several straight months of what some consider excessively high book-to-bill ratios. The April peak of 1.62 has only marginally fallen over the past couple months and, as of this writing, was 1.48 in June, the most recent data available.

As a refresher, the ratio is calculated by dividing the amount (in dollars) of bookings by the amount in shipments. In other words, if over a set time period a company gets $110 worth of orders and ships $100 worth of product, its book-to-bill ratio would be 1.10. A ratio over 1.0 is considered an indicator of future market growth.

So a positive ratio is a good sign, generally speaking, but too much of a good thing makes folks nervous. And ratios in the 1.40 and above range are historically at the high end.

Some are concerned of an overheated market, but conversations with several leading EMS firms suggest instead that OEMs are offering longer forecasts, which are inflating the numerator. For instance, if the typical window was six months, it might be nine or even 12 months now. That pushes more “orders” into the data pile, but it’s a mathematical anomaly, not a sign of double-booking.

I don’t expect the sky to fall, at least this time.

An Antidote to a Complex Environment

Years ago, ahead of a US election, I used this space to pen an open letter to the new president. I wrote that the race for office was heated and intense, but the winner should put aside any ill feelings and work toward the betterment of all Americans.

The column was timed to hit readers’ desks in November, just after the election results were announced. Magazine deadlines being what they were, of course, I wrote it in early October – more than four weeks prior to election day. In short, I submitted it to the printer having no clue who was actually going to win.

More than a few readers didn’t catch that little nuance, and they filled my inbox with screeds both positive and negative about the outcome, projecting their own biases on my musings and utterly missing the point I was trying to make about leadership.

Since then, I’ve stayed away – far away – from anything that even hints of politics, sensing it’s too charged a subject to use even as a metaphor for a larger point.

So, when an industry friend whom I respect more than he will ever know suggested I write an editorial about electronics companies requiring vaccination, and, in his words, “come out swinging in favor of it,” my first reaction was indifference.

Then we conducted a survey of US readers and found just under 60% plan to attend face-to-face events this year, and the top reason for staying home is, of course, Covid-19. That’s no way to get business done, not when there’s a perfectly good vaccine – more than one, actually – available and in most cases free.

As Covid-19 cases increase across the nation, primarily with unvaccinated persons, it’s hard not to be frustrated at the current state of the world. This is a largely preventable disease, , provided we choose to prevent it.

Although I will probably pay dearly for using this space as a soapbox for something that goes beyond electronics engineering, I can’t keep quiet knowing just how badly it’s affecting our industry, not to mention our world.

With that, I strongly encourage all companies – not just US-based ones – to mandate vaccinations for all workers, full-time, part-time and contract-based. Any visitors to their offices should be required to show proof of vaccination too. 

I realize that the unvaccinated have their reasons, and I’m not going to argue with them. But let it be known I wholly disagree with their stance. We must ensure we are doing everything we can to protect the health of our employees and each other. It’s time to take a stand.

Would-Be Foxconn Beneficiaries: Always A Bridesmaid

The University of Wisconsin this week became the latest would-be benefactor of Foxconn’s pretend largesse to acknowledge that it has been, in fact, jilted.

A UW-Madison response to a public records request by the Wisconsin State Journal on Monday shows the Taiwanese electronics company gave $700,000 in the first year of a five-year agreement and no money in the second or third year. The amount to date represents less than 1% of the original commitment.

“I am not at this point expecting to receive that gift,” Blank said in an interview with the State Journal editorial board last week. “It’d be nice. I think it’s unlikely.”

— UW Chancellor Rebecca Blank

UW should feel no embarrassment at falling for the Taiwanese ODM’s promises of riches — in this case, $100 million in grants. The list of brides left standing at the altar by Foxconn is long and global.

Perhaps one day, when Foxconn comes knocking, the prospective bride will demand the ring — and the cash — upfront.

Somehow, however, I tend to doubt it.

From Boards to Brews

In case you were wondering whatever happened to IBM’s once sprawling campuses in Endicott, East Fishkill, and other western New York towns, where Big Blue made everything from semiconductors to laminates to circuit boards, the New York Times has the story.

Spoiler alert: Like so many other old mill buildings, breweries, among other businesses, are moving in.

All in on Altium?

Autodesk’s bid — declined, so far — for Altium took me by surprise. In retrospect, it probably shouldn’t have.

As I’ve noted many times, I fully expect Altium to be acquired. It’s just I was looking more in the direction of Dassault and PTC, the big mechanical CAD (MCAD) players. I should kept Autodesk in my field of view, especially after it acquired Eagle five years ago. I think I was lulled to sleep, as that was a small acquisition and Autodesk hasn’t made much of a push since to burrow into the ECAD space.

The proposal was hefty, valuing Altium at $3.91 billion. That’s not much lower than Siemens paid for the considerably larger and more profitable Mentor Graphics in 2107. Yet Altium thinks it can do better.

It just might. Autodesk’s bid prices each Altium share at AU$38.50, a 41.5% premium over Altium’s closing price on Jun. 4 and a premium of over 47.4% to the one-month volume-weighted average price. Prior to the offering, however, Altium’s stock had peaked at a 52-week high of AU$39.34 in last October. So at $38.50, Autodesk was actually underbidding a bit.

An Autodesk-Altium merger wouldn’t change the face of the ECAD industry immediately. Altium would still run neck-and-neck with Zuken for third place in revenues behind Cadence and Mentor. But it would give Altium the backing of a industry leader in 3-D CAD, and accelerate the inevitable MCAD-ECAD merger.

New Semi Group Needs to Talk Bigger Goals than Just Subsidies

“You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things that you think you could not do before.” ? Rahm Emanuel

Indeed.

In the wake of the latest components inventory crisis, the lobbyists are out in full-force trolling for subsidies for the semiconductor industry.

And if the usual suspects weren’t enough, many of the blue chip (no pun intended) companies that make up the Semiconductor Industry Association and SEMI this week launched yet another industry organization, the Semiconductors in America Coalition. the group supports the allocation of $50 billion by the US government (read: taxpayers) to fund advanced semiconductor manufacturing. The announcement came at almost the same time – coincidence? – IBM reported successful development of 2nm process using a 300mm wafer.

That prompted a longtime friend and industry observer to suggest, “rather than spending money directly, the US and state governments offer the same deal to the supply chain as a whole as do the South Korean, Chinese, and Taiwanese governments. A holistic response is needed. Maybe a carrot to keep 2nm tech onshore.

“We need to bring a number of critical technologies back; chips, packaging, HDI, transposers and even certain components,” he went on.

“Apple has been using black solder mask for decades now to prevent piracy and it has worked. Their keiritsu approach works. Keeping key technologies within the kimono, as the Japanese say, and bringing those key industrial components back, would help to reaffirm North American industrial security and protect our supply chain.”

I can see where he’s coming from, but Apple really doesn’t have the scale of the other communications and computing OEMs; it’s share of the worldwide smartphone market is about 15%, and it has only 8% of the PC market. It’s probably not the model to emulate in that regard. More interesting is its recent decision to go full bore with its own M1 processor, which is made by TMSC.

I know Samsung and TMSC are also working on (close to?) 2nm. I don’t think IBM alone has the scale anymore to be a difference-maker, which is where the other fabs need to step up. They all smell an opportunity, and it’s hard to blame them for trying to get their hands on “free” money.

What I haven’t seen is an overarching policy proposed by the various trade groups/lobbyists promoting onshore wafer production. It seems more piecemeal to me, with new associations stacked atop legacy ones, all promoting the same message (subsidies) but with no promise of tangible returns.

I’m not against government subsidies for critical tech – and semi is absolutely one of those – but it seems to me they should start with a goal and then fill in the rest (processes, funding, etc.).

Sans a clear objective, the game plan will not only be expensive and a hard sell, but doomed to break down.