Author Archives: Mike

About Mike

Mike Buetow is president of the Printed Circuit Engineering Association (pcea.net). He previously was 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 spent 21 years as vice president and editorial director of UP Media Group, for which he oversaw all editorial and production aspects. He has more than 30 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

Elcoteq’s Basket Had Too Few Eggs

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Thanks to Europe’s fairly generous insolvency laws, Elcoteq will likely survive having run out of cash (which isn’t easy for a $1.5 billion company to do). But the industry will be reminded — again — of the danger of having too few eggs in a given basket.

Elcoteq fared beautifully for years as Nokia’s primary EMS supplier. At one point, Ericsson and Nokia made up 92% of Elcoteq’s annual sales. Revenues almost doubled in 1999, then tripled in 2000. As the saying goes, it seemed like a good idea at the time.

But Elcoteq did not anticipate that the 20-year relationship with Nokia might be undermined by emerging markets and their concurrent price pressures. Nokia, saddled with innovation-debt and fierce competition, fell victim to the market share chase and effectively bolted to Foxconn and Jabil. Years of acquisitions had taken their toll on Elcoteq’s cash, which ran frightfully low during the 2009 recession. A deal with Shenzhen Kaifa Technology, which would have brought in much-needed cash, failed to materialize.

Despite turning a profit last year — its first since 2006 — cash from operations was just 9.4 million euros. You know things are bad when you are left to asking Hungarian banks for money.

As of today, Elcoteq employs 7,000 workers across all major regions. A year from now, I’m guessing it will be half that. The company simply hasn’t proved it can build a sustainable business without the generosity of a major patron.

A Story Worth Reading

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For many outside our industry, the name Gerber is synonymous with baby food. But for those in electronics design and assembly, Gerber means something much different indeed.

Still, how many realize the backstory of the man who invested the machine language-turned-data format?

H. Joseph Gerber invented the photoplotter and the eponymously named de facto standard that ran it. Gerber’s genius cut across many industries, from electronics to apparel, and he was awarded the 1994 National Medal of Technology for its life’s work.

But his life is in many ways even more interesting — and certainly more dramatic — than his career. As a teenager in 1940, he fled Nazi Germany for America. As an aeronautical engineering student at Rensselaer Polytechnic Institute, he discovered a way to reduce the time-consuming nature of graphing calculus problems using (seriously) an “expandable ruler” created from the elastic waistband of his pajamas. And of course, he formed The Gerber Scientific Instrument Co. in 1948, which is still going strong today.

Gerber’s son David is writing a book about his father’s exploits. I look forward to learning more about the life of one of our industry’s true unsung heroes.

The Tao of Steve

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What will Apple look like after Steve Jobs? And will it remain as successful as it has been over the past decade?

I’ll say it now: No.

Apple won’t sustain its success because its success is unsustainable.

This is a company that has achieved market share as high as 93% for some devices, and continues to dominate in the uber-competitive consumer electronics space. This is a company that has gone from being so close to the grave that none other than rival Microsoft ponied up $500 million just to keep them alive in order to fend off anti-trust regulators (think Bill Gates regrets that decision?) to being the world’s second-most valuable company.

There clearly is something associated with Apple that Sony, Samsung, Dell, HP and legions of other companies haven’t been able to identify, let alone bottle. But even if Steve Jobs were to live to 90 (he’s 56 now, and in failing health), Apple will slide because gravity has this funny way of bringing everything back to Earth.

It doesn’t matter who takes over for Jobs or what he or she does (or doesn’t do). Apple will always be Apple, but it won’t always be the reigning king of consumer electronics.

Where Design is King

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Just posted a profile of Automated Circuit Design, a Dallas-area electronics manufacturing services provider that I visited last week.

ACD started as a design bureau and VAR, and one of the interesting things I noticed was how it has stayed true to its designer roots: all its designers have their own offices (not cubicles), and seven of them are CID+.

Drawing ‘Boards’

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Now’s as good a time as ever to be in school, it seems.

At the University of Illinois, scientists have created a roller ball pen that can be used to draw functioning circuit boards. The silver-inked pen can write on paper, wood and other substrates, and “allows one to construct electronic devices ‘on-the-fly,’ ” said the lead researcher, Dr. Jennifer Lewis. “This is an important step toward enabling desktop manufacturing (or personal fabrication) using very low cost, ubiquitous printing tools.”

Also, because robots apparently need to be more sensitive, Technical University Munich researchers have produced small hexagonal plates composed of circuit boards that, when joined together, form a responsive robot skin. Cool stuff. Just don’t tell the movie producers who brought you “The Terminator.”

 

What’s Ahead

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It’s a slowdown, but not a meltdown.

That’s what Sherri Scribner from Deutsche Bank is forecasting for the second half of 2011.

In a research note today, she says their checks suggest “near-term demand is slightly softer than prior expectations, although weakness in telecom, networking, servers and storage had been well telegraphed heading into the quarter.” Optical appears “stalled” due to overinventories but second-half forecasts are strong.

Most companies have not been hurt by Japan, and even automotive is expected to “recover significantly” later this year, she writes.

My concern with all this is that for the past decade, slowdowns in EMS have been dramatic, not soft. We have lived through boom-bust cycles since 1995.

Not trying to be a pessimist here; just melding the data with the history.

PCB West is Back!

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Registration is open for PCB West, our annual conference for printed circuit board design, fabrication and assembly.

We have more than 50 presentations at this year’s show, which takes place Sept. 27-29 at the Santa Clara, CA, Convention Center. As with last year, several sessions on the exhibition day, Sept. 28, are free.

A big shout out to the SMTA Silicon Valley chapter, which put together the assembly tracks. Some of the proceeds will benefit the chapter.

Mark your calendars — and don’t forget to register!

PCB West: Back for More!

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Registration is open for PCB West, our annual conference for printed circuit board design, fabrication and assembly.

We have more than 50 presentations at this year’s show, which takes place Sept. 27-29 at the Santa Clara, CA, Convention Center. As with last year, several sessions on the exhibition day, Sept. 28, are free.

A big shout out to the SMTA Silicon Valley chapter, which put together the assembly tracks.

Mark your calendars — and don’t forget to register!