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

Musical Trade Show Chairs

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Canon Communications, owner of a series of B2B magazines and trade shows, has been bought by United Business Media.

This is highly relevant because Canon partners with IPC to put on Electronics Assembly Expo, which coincidentally takes place next week. And SMTA used to partner with Reed Elsevier on that show, only to be tossed aside when Canon acquired the Chicag0-based Assembly Tech Expo show (as well as the US-based Nepcon events and several magazines) from Reed in May 2006.

Not coincidentally, CIRCUITS ASSEMBLY was owned by UBM from October 1999 to February 2002. And that gave me an front row seat to see its management in action.

It wasn’t pretty.

London-based UBM has a long history of terrible business decisions. It spent $900 million on magazine publisher CMP in October 1999, and then sold off many of the just-acquired properties for pennies on the dollar. These were magazine/trade show businesses in such fields as paper making; unglamorous, to be sure, but they just happened to be huge cash cows. But they had low topline growth, and UBM’s bet was on the high-flying tech sector, which collapsed a scant 18 months later.

Where UBM benefited was it went private when its stock was super cheap, then as the markets clawed back, it went public again. That may have been the only smart financial move the company has made in 10 years.

It is paying $287 million for Canon, a company with $106 million in revenues and $37 million in pro forma EBITDA for the fiscal year ended June 30. (Canon’s venture capital owners acquired the business in 2005 for a reported $200 million.) That’s a lot of crumpets.

While UBM corporate is good at blowing money, what its business units don’t do is partner with outside organizations. When I was there, they barely partnered with each other. Given that, I can’t see UBM continuing the relationship with IPC.

And it will be very interesting to see if that forces IPC to reopen talks with SMTA over a fall electronics trade show. If nothing else, it very likely gives SMTA the upper hand in negotiations.

Parts Time

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Sunstone this week released v4 of its award-winning PCB123 CAD tool.

The no-cost, license-free tool features parts outlines for 500,000 components, automated BoM and integrated DRC/DfM rules. But what’s most interesting is that users can automatically get availability and pricing info for each component registered in Digi-Key’s database.

This development is fascinating in two respects.

First, that a modest-sized PCB fabricator, not a billion-dollar EDA company, is pushing the envelope on electronics design software.

Second, for engineers who now must not only draw the electrical circuit but also lay out the board and order the prototypes, built-in parts procurement is a huge time saver. Which begs the question, why aren’t the big CAD companies offering this too?

Kudos to Karl

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Karl Dietz, who is retiring from DuPont after 30 years on Oct. 1, has long been a friend of this site and an enormous contributor to the industry as a researcher, regular conference speaker and author. (He also plays a mean piano.) We wish him luck!

Busting Constraints

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I had the pleasure of attending InForum’s quarterly meeting yesterday, and wanted to share my experience.

InForum, of course, picked up the Quarterly Forum electronics industry research arm that once was operated by Technology Forecasters under the name TFI Quarterly Forum. When TFI founder Pam Gordon decided to concentrate on environmental issues surrounding the electronics supply chain, she turned over the more traditional market research arm to Kathleen Geraghty and Doug Kent.

Having attended several Quarterly Forum meetings in the past, they typically could be described as a combination of research reports and “group-think” breakout sessions.

I found the research both in-depth and pretty darn accurate. The group-think sessions have been more problematic. They tended, in practice if not by design, to be too oriented toward complaints than solutions. During the meeting, EMS companies would beat up OEMs for past sins (primarily, for asking for too much while paying too little), and OEMs would appear properly contrite, but nothing ever was truly solved.

What I liked this time around is that the participants encompassed more of the entire supply chain, from foundry to OEM. TMSC was there, as were several members of the disty community (thanks in no small part to meeting host Avnet), several OEMs and some Tier IV EMS firms. Moreover, the nature of the presentations and subsequent discussion, at least this time, was more specifically targeted at fixing a specific problem, in this case, capacity constraints (read: component availability). While many of the recommendations centered on individual company solutions (how to get yours, even while other companies can’t) as opposed to systemic ones, in my opinion this approach nevertheless was better than the persistent pricing whines that never got us anywhere.

I’ll save the revelations of the discussions for another day, but suffice it to say, I like where InForum is headed.

More Plants, More Headaches?

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I have to admit, Viasystems’ decision to pour up to $100 million into capacity expansions worries me just a tad.

Ours is a boom/bust industry, characterized by periods of substantial growth followed by years of sheer gut-wrenching pain. I’ve been through four of these cycles in my 20 years in PCBs, and what’s clear to me is that, overall, there is ample capacity worldwide to suit the PCB industry’s needs.

Granted, a large amount of the funds are earmarked for machine upgrades, and Viasystems has not publicly stated how much of the investment will be geared toward additional space. Not to pick on Viasystems, because this problem clearly is industry-wide, but what I’d like to see is more than three quarters of growth coupled with the possibility of more to come before the industry starts ramping capacity. Pricing has long been a problem for PCB fabricators. Adding capacity won’t fix that.

Gou Motors On

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Under different circumstances, would Foxconn’s Terry Gou be considered the second coming of Henry Ford?

This Business Week article suggests so. I’ll have to study my Henry Ford history, because while the piece breaks little new ground, it is filled with Gou quotes that are ironically delicious: “Work itself is a type of joy”; “A harsh environment is a good thing”; “Hungry people have especially clear minds”;  “An army of one thousand is easy to get, one general is tough to find.”

All this from a man worth an estimated $5.9 billion. It doesn’t sound like the man who said of the Model T, “”When I’m through, everybody will be able to afford one, and about everybody will have one.”

Also, the new Madison Avenue p.r. agency’s touch is coming through, as Business Week reports on how Guo’s family fled the China and the Mao-led Communists in the late 1940s. There also is background fodder on his personal family tragedies — his wife and son both died of cancer in the same year — and how he practices yoga and regularly takes his 85-year-old mother for Taiwanese noodles.

The article attempts to smooth over criticism of the employee suicides (calling it a classic cluster, despite evidence by the Wall Street Journal to the contrary), and completely misses the boat on how overtime works in China, finding several workers who say they welcome the extra hours, without bothering to acknowledge the reason they work OT is because they need the money.

The gold nuggets come when Gou intimates his strategy to move workers off the company rolls and onto the government’s. “I think we need to change the way things are. Businesses should be focused on business and social responsibility should be government responsibility.” Comparisons of Foxconn to Wal-Mart sound more apt than ever before.

I don’t expect a smear job. However, this piece has the fingerprints of a PR agency at its finest all over it. Read it with that in mind.

On Markets and Makers

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Despite my pleasure in seeing the forecast for printed circuit board production this year, I have to admit it’s depressing to contemplate how far the US market has fallen, both in size and share.

Dial back to 2000, and North America was head-to-head with Japan for world supremacy. Both markets were roughly $10 billion in size, give or take, and each had their specialty. In Japan, it was chip substrates, while the US dominated in high-layer-count boards.

I recall, at a meeting with Jack Fisher and a few others early that summer, word was out that Hadco’s lead times were as much as six months, and the industry forecast was for double-digit growth for the next two years. Hearing that, Jack surmised that no investments in HDI would be forthcoming any time soon, reasoning that if order books were maxed for “conventional” boards, owners wouldn’t see the value in investing in next-generation technology.

How right he was.

We will never know which factor had the biggest impact on the fate of the North American board industry since. Certainly, extended lead times pushed OEMs to consider Taiwanese and Chinese sources that, up to then, were looked upon more as fallbacks than primary producers for markets outside of PCs and some handhelds. The tech bubble decimated many companies, and revealed tremendous operating and management flaws among several US and Canadian fabricators. Wall Street’s push for OEMs to have a “China” solution (read: lower wages) didn’t help. And, of course, the lack of investment in HDI paved the way for better-financed Asian plants to take the lead.

If there’s a bright spot, it’s that 1) US engineers continue to amaze in their ability to get decent results from 20-year-old Excellon drills and 2) wage pressures are hitting China considerably sooner than probably anyone imagined. Bare board process equipment continues to improve, making it easier to fab boards without years of experience. Thus, the bar is slowly being lowered for future generations to jump in.

Maybe even the US.