Ten UK-based suppliers, including a PCB fabricator named Wrekin Circuits, have joined a collective to offer one-stop shopping.
It’s not the first time this has been tried, but so far the results have been solid.
Author Archives: Mike
NTI Countdown, Nos. 26 to 30
And here is today’s installment of the Top 50 printed circuit board fabricators. We’re counting them down, from No. 50 to No. 1.
26. Simmtech
27. Nitto Denko
28. Chin Poon
29. GCE
30. TPT
We’ll be back Monday with numbers 21 to 25. Be sure to check out the entire NTI-100 list in the September issue of PCD&F.
NTI-100, Nos. 31 to 35
And here’s the rest of the Top 30:
31. Hitachi Chemical
32. Panasonic ED
33. Kyoden
34. Unitech
35. Toppan-NEC.
Tune in tomorrow for numbers 26 to 30.
Why Cook Won’t Change Apple’s EMS Recipe
New Apple CEO Tim Cook will make no changes to its outsourcing recipe.
That’s my take, based on an assessment of the iPhone maker’s balance sheet.
Cook, of course, has been named to succeed Steve Jobs, who has been fighting a particularly deadly form of cancer.
Foxconn is telling reporters the change at the top won’t impact the companies’ relationship. I couldn’t agree more. It can’t. Much like the US-China relationship, Apple needs Foxconn, and Foxconn needs Apple. Apple carries some $11 billion worth of outstanding off-balance sheet commitments for outsourced manufacturing and components, plus another $1.6 billion committed to manufacturing equipment, presumably for the Foxconn-run plants.
Why would Apple commit all that cash to equipment purchases, when it does not have the internal capacity to build product itself? Because it owns the machines in the Foxconn plant. Although Foxconn has moved much of its Shenzhen campus operations inland to take advantage of lower labor costs, rumor has it the site remains open solely for the benefit of Apple. Apple is said to pay Foxconn roughly $6 for every finished working assembly.
With demand for Apple’s iPads, iPhones, Macs and iPods cresting, it couldn’t leave if it wanted to. If anything, Foxconn is in better position to absorb the loss of Apple than the other way around.
The Countdown Continues: Nos. 36-40
The NTI 100 countdown of the largest printed circuit board fabricators continues:
36. DYnamic
37. Ellington
38. Sanmina-SCI
39. 3CEMS
40. MGC Group
NTI 100, Nos. 41-45
Here’s numbers 41 to 45 of the NTI 100 for 2010:
41. Career Technology
42. ASE
43. SI Flex
44. ISU Petasys
45. Fujitsu Interconnect
HP PC Spinout Effects, by the Numbers
Here’s the first report I’ve seen that gets into the nitty-gritty behind the possible supply chain effects of HP’s PC spinoff/sale.
TrendForce was good enough to pull together the PC market share rankings and puts forth a cogent explanation of several possible outcomes, including — believe it or not — a potential hindrance to the Foxconn manufacturing tank.
Interestingly, while many pundits don’t believe the Taiwanese ODMs have the financial girth to absorb HP’s market-leading PC unit, one of the emerging possibilities would be Samsung, whose incentive to snatch it up would go (far) beyond box sales. Indeed, as TrendForce points out, Samsung could leverage the PC chain to create additional sales for its components and batteries. Samsung is flush with cash — more than $55 billion on its balance sheet, of which $20 billion is in cash or equivalents. (The head of HP’s PC unit says it is worth more than $10 billion.) It could handle the financial strain of taking on HP’s PC arm, even though revenue runs in the tens of billions per quarter and its operating profit has grown seven of the past eight quarters.
If an outside suitor doesn’t materialize, HP has a successful track record of spinning off businesses, with Agilent being the most prominent. If that happens, the supply chain status quo might be maintained.
Something to think about.
NTI 100, Coming Your Way
In anticipation of publishing Dr. Hayao Nakahara’s annual NTI-100 next month, here are numbers 46 to 50:
46. FCI
47. Ichia
48. DDi
49. Kyocera SLC
50. Founder Technology
Check back each day between now and Sept. 1 for the rest of the top 50.
Just What is ‘Core Competency,’ Anyway?
I want to call attention to this long overdue piece by Forbes’ columnist Steve Denning.
Under the tantalizing headline, “Why Amazon Can’t Make a Kindle in the USA,” Denning makes the case that management, not manufacturing, is to blame, for its rather thoughtless, follow-the-herd mentality (my words, not his).
Case in point: Dell, which little by little gave more and more of its PC manufacturing and design to Asustek, until the day came when Asustek had developed all the in-house expertise it needed to become an OEM. It no longer needed Dell. And while one could say Dell (whom I am using as a proxy here, as this scenario applies to scores of Western businesses) would have been eaten up by competition sooner or later anyway, the fact is one of its major suppliers — Foxconn — practically prints money, while Dell and fellow PC outsourcer HP look for ways to escape that low-margin business.
For nearly two decades, the EMS industry has sold the OEMs on the idea that they should outsource their lower-margin activities, while simultaneously refuting any suggestion that by doing so OEMs were setting themselves up to be replaced by their own suppliers. “We’re not in the business of ____,” was the EMS refrain. Well, they weren’t until they were. And then it was too late for OEMs to do anything about it.
Unlike populists like Lou Dobbs who shout that the loss of manufacturing must have a political solution, yet fail to consider the intricacies of what they propose, Denning takes a more nuanced approach. (I’ll add my two cents: If Wall Street could manage your business, why aren’t they?)
It’s worth your time to read.
H-P Bets on the Cloud
Hewlett-Packard designed and built its first computer in 1966. Has it designed and built its last?
Various Wall Street sources are reporting today that the world’s second largest electronics company will spin off its PC unit in order to concentrate on servers and services. If true, it marks the end to an extraordinary era — one that saw H-P race neck-and-neck for years with IBM and Digital Equipment in the mainframe space, then after falling behind Dell in PCs, snatch up Compaq in a move that was generally panned but turned out to be a masterstroke.
Still, over the past several years PCs became an ever lower-margin business filled with low-cost competitors. Moreover, the emergence of shared-server computing — aka, “the cloud” — posed a threat to those who poured resources into branded laptops and desktops.
It says here this move is H-P’s way of saying that it, too, believes cloud computing is the future, and the money to be made will come from selling the heavy-duty hardware, not billions of “dummy” terminals that are hooked in to it.