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

Thai Wage Rate Offers Financial Food for Thought

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China isn’t the only Southeast Asia nation struggling to come to grips with rapidly increasing wages.

Thailand’s government is considering a 21% hike in the minimum wage, leading several executives to warn that the move could push labor-intensive jobs elsewhere.

Thailand is home to several of the world’s largest EMS firms, including Cal-Comp (no. 8 on the CIRCUITS ASSEMBLY Top 50), Team Precision (n0. 19), Delta Electronics, Hana Microelectronics ( no. 29) and SVI Public Co., not to mention Fabrinet, which is based in San Francisco but whose factories are in Thailand.

We will hear more and more of this as Asia faces the same, inevitable swell of worker pushback. Thailand suffers through massive worker strikes each year, and its government may finally be capitulating. With higher wages come increased overhead, although it would take far more study and space than allowed here to examine whether the expenses related to training, turnover and (lower) end-product quality exceed those of a higher minimum wage.

What we do know, however, is that much of the world’s economic model balances on the import economies of the US and Europe. Over time, this will have to change, lest we continue to endure sharp boom-bust cycles every few years.

Paying the Price

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Interesting discussion going on at LinkedIn, where a handful of folks are debating the going rates for PCB design in China.

It started when someone asked what the “least per hour charges” to attract a client for PCB layout outside China (emphasis mine). (The question was asked by a LinkedIn member in Pakistan.) Quickly others chimed in with the usual “you get what you pay for” refrain (when it comes to PCB design, I tend to agree).

Someone from Israel noted that they charge by the pad. Those who commented on hourly charges relayed reports (unconfirmed, by the way) of $5 (China) to $10 (Pakistan).

PCD&F conducts an annual salary survey, and certainly a $10/hour contract rate would undermine even the lowest paid designer responding to that questionnaire. But keep in mind, these are not confirmed quotes. And as the folks at PCB West last week showed in spades, there’s no comparison between a button pusher and a PCB design engineer.

PCB West Opens Doors, Eyes

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It was 103 degrees in San Jose last week, but inside the action was even hotter.

We had a terrific time at PCB West. Attendance was up markedly — 26% for the exhibition and 35% for the conference. Signal integrity remains a major area of interest, although during the PCB Designers Roundtable — cosponsored by the good folks from the Silicon Valley Designers Council chapter — it was revealed that perhaps one-third of designers don’t actually perform SI analysis. (It’s left for someone else to do.) Proponents, including the ubiquitous Rick Hartley, stressed that all designers should perform some level of SI.

Also revealed: a large percentage of designers continue to manually route their boards, despite evidence showing autorouters could save time. Whether they do so because they are trying to protect their jobs is certainly understandable, but the notion that autorouting could free up resources that could then be used in other areas (such as SI analysis) bears consideration. 

Many of the technical sessions that accompanied the trade show were packed as designers and process engineers took advantage of the free sessions to glean valuable information on reducing layer counts, thermal management, post-assembly cleaning, and CAD-CAM. In one eye-opening presentation, Don Trenholm of Custom Analytical Services literally ran out of time showing slides of various counterfeited components.

And a quick shout-out to the fellows at SFM Technology, who hail from my hometown of Champaign, IL, and whom I only spoke with for a moment because those pesky customers kept showing up to look at their ECAD-MCAD tools.

Faulty Intel

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Former Intel exec Craig Barrett yesterday became the latest from the microprocessor company to pitch the dubious claim that the US tax policies are decimating the industry.

Just a month ago, Barrett’s successor and current CEO Paul Otellini criticized the US government for a range of what he called anti-business approaches. And Intel cofounder Andy Grove touched off the pressure with a piece in Business Week in July, in which he tackled the issues of growth with more political savvy than did his colleagues but equal conviction.

While Grove was sensible enough to couch his plea in terms that relying on startups to innovate the US back to the center of tech universe isn’t a panacea, each of the Intel execs put the onus on the US government to fix the industry’s woes.

To be sure, government policy should be designed to promote growth, job creation and innovation while at the same time not screwing over the little guy. In fact, however, conceptualizing and executing the perfect is far from easy.

There are certain contradictions in the Intel PR campaign. Barrett and Otellini want government to loosen the chains, while Grove asserts the US policy of a free market penalizes domestic companies. Further, Grove’s thesis centers around creating jobs in the US, while his colleagues seem more concerned with generating greater profits for Intel (and no, the two don’t necessarily go hand-in-hand). The troika agree, however, that tax policy must change, insisting that the US corporate tax rate is the highest in the world. What this omits, of course, is that more than 67% of American businesses pay no taxes (for the record, UP Media Group isn’t one of them. Perhaps we need better accountants.)

As Forbes pointed out in May, General Electric had an  2008 effective tax rate of 5.3%, and while its 2009 pretax income was $10.3 billion it not only paid no US tax, it recorded a tax benefit of $1.1 billion! Intel’s own tax rate was about 23% last year and in 2007, and 31% in 2008.

What Intel is suggesting is intellectually dishonest, and unbecoming one of the great American tech success stories. And, not to be too cynical, but it’s impossible not to note that while Intel’s stock price is listing, plenty of its competitors seem to be doing just fine.

It’s time Intel looked inward, and stopped blaming everyone else for problems that are largely self-created.

PCB West Exhibits Open Today

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The exhibits for PCB West are open today from 11 to 7. Those in the Silicon Valley should strongly consider stopping by to take in the scores of software vendors, fabricators and EMS companies, and other service suppliers.

Also, there are numerous free technical sessions during the day, including talks on CAM practices, PWB design characteristics using miniature components, decreasing layer counts, test strategies, locating fraudulent/counterfeit components, thermal management, post-assembly cleaning, how solar affects electronics manufacturers, and much more. And of course, the PCB Designers Roundtable, moderated by our own Pete Waddell.

We’re at the Santa Clara Convention Center. Be sure to stop by.

PCB West Exhibits Open Today

Posted on by

The exhibits for PCB West are open today from 11 to 7. Those in the Silicon Valley should strongly consider stopping by to take in the scores of software vendors, fabricators and EMS companies, and other service suppliers.

Also, there are numerous free technical sessions during the day, including talks on CAM practices, PWB design characteristics using miniature components, decreasing layer counts, test strategies, locating fraudulent/counterfeit components,  thermal management, post-assembly cleaning, how solar affects electronics manufacturers, and much more. And of course, the PCB Designers Roundtable, moderated by our own Pete Waddell.

We’re at the Santa Clara Convention Center. Be sure to stop by.

Presience, or False Alarm?

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“2010 becoming very reminiscent of 2000, where poor inventory control, and concern over long waiting times for leading-edge equipment spelled disaster, and we ended the year with $10 billion in excess IC capacity and a shattered equipment industry that took years to claw out of the red and never fully recovered until this year.”

That’s the comment from the president of The Information Network, a US-based research firm. Is he right?

I tend to disagree. I think the inventory levels are still well in line with historical norms as baselined over the past seven years and well below the glut in 2000-01. Yes, a few big OEMs have invested large sums (a reported $100 million for Cisco) to ensure stock of certain parts, but for almost everyone else inventory is scarce. Lead times for some parts are out to 20 weeks — but Top Tier EMS companies have been upfront with Wall Street about the issue and no one can has been able to cite to me orders lost from an inability to get parts.

Instead, what’s happening is programs are getting pushed out. It doesn’t make anyone happy, but it’s far better than the alternative scenario of excessive inventories and battles over who will pay for them. That itself sets 2010 apart from 2000, in my opinion.

All supply chains have an inevitable tension. Far better for it to be taut than loose.

Pressing Congress for PCBs

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The US has lost its lead in some critical defense-related industries such as semiconductors, printed circuit boards, machine tools, advanced materials and aerospace, the AFL-CIO testified to Congress yesterday.

Not exactly news, of course, but I’m glad to see a number of experts are calling for an immediate rethinking of our national economic policies.