I’ve had the chance to speak with the ever-gracious Julian Coates about ODB++ and Mentor’s plan for the data transfer format. Will post that interview in a bit.
Author Archives: Mike
Trading Places
I’ve spent a good part of my life watching electronic data transfer formats come and go and at the end of the day, Gerber, warts and all, has remained the one to beat. So I’m not prepared to rise up and shout to the heavens that IPC-2581, the latest iteration in 40 years’ worth of attempts at an “industry” standard, is at long last the answer.
But there are enough notable differences in the process this time around to make it newsworthy. First and foremost, there are real, live CAD tool vendors not just showing up at the meetings, but actively participating (!).
Going back to my IPC-D-350 days, Digital Equipment and the late, great Harry Parkinson were instrumental in trying to revive interest, and they had support from several smaller software folks like Dino Ditta at Router Solutions and Steve Klare at Intercept. But they never managed to break through, and a big part of the problem was the CAD vendors’ collective refusal to offer IPC-D-350 as an output (or input). The response always was, “We’ll do it if our customers ask us.” But what they were really saying was, “We don’t want to make it easy for our customers to migrate their designs to a competitor’s tools.”
In the meantime, AT&T offered up RS-274X (aka extended Gerber), which UCamco continues to support, and Valor developed ODB++, and while it is more of a machine language than a format for electronic design data, it was accepted by fabricators desperate for something, anything more intelligent than Gerber.
A new task group is attempting to update IPC-2581, recognizing that design needs will at some point “break” Gerber. Many of the players are new to the game, and a lot of the old rivalries appear to have died off due to retirements and, well, death. That’s good, because the industry needs a better standard than Gerber. It’s not something anyone ever will make any money off of, but every day we go without it, everyone will lose some.
Pease’s Last Words
It’s been a rough couple of weeks for chip designers.
First, analog guru Jim Williams died of a stroke on June 9. Then fellow guru/author Bob Pease, known for his folksy “Pease Porridge” columns died in a one-car accident — possibly due to a heart attack — while leaving Williams’ funeral.
Given the disaster in Japan and the loss of these two legends (not to mention reliability guru Werner Engelmaier), 2011 is shaping up as a sad year.
A Big ‘Yeah!’ for Yacoub
Congratulations to Advanced Circuits CEO John Yacoub, who has been named a finalist for the Denver Business Journal’s Entrepreneur of the Year.
From an inauspicious start — in his first week on the job, they told him the plant would be closed because of environmental reasons — John helped turn the company into one of the prime examples of American ingenuity and character.
The recognition is good for John and Advanced Circuits, of course, but it’s also vital for the printed circuit board industry to get this kind of positive press. Way to go!
The Free Flow of Fakes
While it’s true that counterfeit parts are pervading all aspects of the electronics supply chain (not to mention consuming all amounts of oxygen from industry pundits such as yours truly), is it possible our sense of fear is overblown?
By fear, I don’t mean “risk” — that’s the inherent chance of failure taken by, knowingly or not, using a fraudulent part. Rather, I mean the “if I do this I might get someone hurt and/or lose my job” feeling.
Yesterday, the SMEMA Council, a group of electronics assembly equipment OEMs, admonished customers to use only authorized channels for replacement parts and service. By using fake parts, SMEMA said, the risk (there’s that word again) users take is that the assembly equipment OEM could void their warranty. That’s a tough nut to swallow, considering the price tag of new placement machines, testers and screen printers.
The question I have is, why would SMEMA even feel compelled to issue such a statement? Faked parts (one old friend says in China, copyright means the “right to copy”) are ubiquitous and systemic. Two US senators this week accused China of blocking a probe into counterfeit electronics by refusing visas to investigators, but it’s hard to know whether the US is truly wants to stop the flow of knockoffs goods or just put pressure on China in order to exact other reforms or negotiating leverage. Indeed, so-called fourth shifts are not only common, they have been for years. So forgive me for being cynical when a few bureaucrats say they want to do something about it now.
In my opinion, there’s no end in sight to the free flow of fakes because, in fact, America and Europe don’t really fear the potential outcome. For a decade, manufacturing programs have been shuttled en masse to China. And while OEMs pay lip service to the notion that their IP is their livelihood, they aggressively seek out the manufacturing partners of their competitors, thus simultaneously ensuring their IP will be shared and that their products will be commoditized.
Let’s put it another way. If company ABC contracts to China and learns a few months later that every Chang, Wang and Li is walking around with a cheap duplicate of their widget, ABC may snort and snarl a few times, but will it fire the folks involved in outsourcing? Highly unlikely. But if that widget never gets built, or ships late because a machine is down or an oscillator is unavailable, heads will roll. Supply chain employee is thus naturally emboldened to take risks that they otherwise might be unwilling to contemplate. The wheel is set in motion.
SMEMA is trying to reorient customers as part of a much-welcome attempt to demand accountability, and I wish them luck, but I don’t think it will make much difference. The corporate buyer culture has changed.
Don’t believe me? Just go to the EMSInsider group on LinkedIn and look at all the listings by members looking for spare parts. Utilizing only approved vendors is nice and all, but when product needs to be shipped before the quarter’s up, the AVL is an industry anachronism.
Inside EMS
I attended a fascinating conference yesterday on the state of electronics outsourcing and supply chain management.
Set on the campus of Tellabs in the Chicago suburbs and produced by Charlie Barnhart Associates, speakers and attendees patiently dissected current trends and needs.
So as not to inhibit discussion, I promised not to reveal any specific remarks or details prior without getting the individual speaker’s signoff, so for now I will stick to generalities.
Attending were representatives from about 10 EMS companies and a like number of OEMs, some from Fortune 100 companies. There were also various analysts and other talking heads/pundits. I was the only media person in attendance.
Topics ranged from the concrete to the speculative. Tellabs spoke at length on how and why the telecom gear maker decided to outsource its electronics assembly, and was refreshingly upfront not only about the pros and cons but about the mistakes it made along the way.
Researcher Matt Chanoff noted the startling success of the Apple iPad and wondered whether the reason it has managed to capture a 95% share of the tablet market despite more than 80 competing products has to do more with the “ecology” of Apple vs. the form, fit or function of the iPad itself. He also pointed to a few distinct trends in the electronics design and manufacturing space, noting an unprecedented product platform commoditization is underway, while at the same time a newish breed of hobbyists (“prosumers”) has emerged and created a niche market for very expensive, semi-retro (read: electromechanical) products like cameras.
CEO Cary Wood laid out the turnaround of 118-year-old Sparton, which came thisclose to bankruptcy before righting the ship. The current metrics are an impressive display of refocusing and rebalancing. He said that the bulk of Sparton’s EMS customers two years ago were money losers, and Sparton had to either cancel the programs or renegotiate terms. But the bigger issue was convincing the sales team to jettison bad customers. Wood was forthcoming about the specific policies they put into place, including standardizing templates for pricing and quoting, and installing a sales and incentive program based on profits. He also noted that given Sparton’s exceptionally long history in Michigan, they effectively had to relocate the headquarters because they were the big fish in that small pond, and after all the local layoffs and shutdowns, they would have been tarred and feathered. He also said they made the decision to separate HQ from a manufacturing site so as not to get too emotionally attached to a particular business.
Time and again, OEMs and EMS companies said it was advantageous for competitors to place programs with a single EMS and that IP concerns didn’t really factor into the equation. The EMS companies said that OEM competitors are attracted by the knowledge that the EMS knows how to build products for the target market and that the EMS would also know what the appropriate prices would be. (That latter point was made several times.) In short, IP concerns take a backseat to the hope that the EMS would ensure the build price remained consistent with their competitors’ products (which also hints that OEMs accept the commodity nature of most of their products).
Another speaker asserted that no EMS is too big to fail, Flextronics and Foxconn included. He pointed to the disruption such an event would have on supply chains, pricing and capacity.
The good folks at CBA put me to work moderating a panel made up of two OEMs (Tellabs and Eaton) and three EMS companies of varying size and geographical reach (Plexus, Morey and Creation Technologies). I’ll have more on that in a bit.
Terry Gou’s Latest Obsession
There is no doubt Foxconn founder and megabillionaire Terry Gou is a smart man. But he’s also a master manipulator.
Take a look at his comments at Foxconn’s recent shareholder meeting. As reported by Business Insider, Gou had sharp words for fellow gazillionaire Warren Buffett, who has invested in BYD, which is engaged in litigation with Foxconn over IP infringement claims.
Here’s Gou calling out Buffett:
If Warren Buffett really believes in BYD’s electric car technology, then why doesn’t he drive a BYD car instead of an American car? Doesn’t that tell you something about what he really thinks of BYD?
It should be noted that Buffett spent $26.5 billion last year to acquire the second-largest US railroad. By Gou’s twisted logic, Buffett shouldn’t be driving at all — he should be taking a train everywhere. But then again, Gou didn’t get so rich by being a generous soul.
Live, from Chicago!
I’ll be at Charlie Barnhart Associates’ Outsourcing Navigator Council meeting next week in Chicago. Old friends Eric Miscoll and Jennifer Read have invited me to moderate a panel looking at the future of outsourcing.
Among my panelists are executives from Plexus, Creation Technologies, Morey Corp., Eaton Corp. and host Tellabs. I’m really looking forward to it, and hope to have some good notes to share with you next week.
Live, from DAC!
Senior editor Chelsey Drysdale will be reporting from the Design Automation Conference in San Diego this week. Be sure to check for her updates on PCD&F’s home page.
News from Tokyo
Old friend Matt Holzmann reports on the JPCA Show, which took place this week in Tokyo. His take: “exhilarating.”