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

An Era Ends at Siemens

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We have been noting for years that, with almost all the world’s major component placement equipment makers on the block, sooner or later, someone was going to be bought (or shut down).

Today, that day came, as semiconductor equipment OEM ASM said it would acquire Siemens’ Electronics Assembly Systems business unit.

“Acquired” is a delicate term: Siemens will actually pay ASM 29 million euros (roughly$37.9 million) to take the money-losing unit off its hands.

Hong Kong-based ASM thinks it can do what Siemens could never master: develop a profitable channel in Asia. Siemens’ highly engineered machines are  generally expensive relative to its Japanese competitors, and attempts to develop a model whereby it could compete on price as well as technology haven’t yet managed to break the string of several successive quarters of (big) losses.

With tens of thousands of machines in place around the world, Siemens’ place in the pantheon of electronics assembly equipment  manufacturers is secure. Today we salute the legacy of the thousands of its engineers who designed some of the best machines the industry has ever seen, and we hope that under ASM’s management, the unit might again return to its former glory.

Sola Lonely

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Sanmina-SCI’s model hasn’t been, shall we say, ideal over the years.

The company, which pre-2000 was considered one of the best-run PWB and EMS companies around, got caught up in the M&A fever, buying SCI and Hadco, and since has struggled to stay profitable even in industry upswings. More often than not, Sanmina has had to take restructuring costs as it tries to rationalize its capacity.

So it was interesting when, during its fiscal third-quarter analysts conference call (on which it announced another $16 million to $18 million in restructuring costs), chairman and chief executive Jure Sola described how the company plans to fill its unused printed circuit board capacity.

As PCD&F reported earlier this week, Sanmina’s printed circuit board fabrication plants in Asia are at 85% to 90% capacity, while in North America one plant (San Jose*) is over 90% and another (Owego, NY**) is at 55% to 60%.

Sola’s take is that the company needs to compete on technology, not labor. But a leading PWB analyst and friend told me yesterday the market has become one in which volume alone will decide the winners.

Sanmina’s PCB sales are likely to near $400 million this year, which is up significantly from 2009 but still far behind the industry’s biggest players. If my friend is right, it suggests Sanmina, again, will be left in the cold.

*I think.
**I also think.

All Screwed Up

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If you work for Foxconn, don’t cheat on your wife.

That’s the message the world’s largest EMS company explicitly sent yesterday, according to several published reports.

Apparently, working for Foxconn means no cheating on spouses, gambling, prostitution, drugs or bribery (not to mention telling the company where you are during certain holidays or overseas trips).

Not that I’m condoning any of that behavior, but I can’t help but note the irony of the rules.

So it’s OK for the company to screw the employees, but not OK for employees to screw each other. Got it.

Design to Win

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Glad to see Mentor is continuing with its annual Technology Leadership Awards competition.

The program, which has been around since 1988, uses a panel of judges to select the best designs in six end-product categories. (The only catch is that you have to use Mentor’s software; not sure what would happen if someone tried to enter a design using, say, OrCad. But since you send in screen shots, it would be self-evident.)

Apply online at mentor.com/go/tla.

Oh, and our own Pete Waddell is a judge. But don’t let that stop you.

Has Toyota Solved SUA?

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I remain skeptical in the light of Toyota’s latest statements that driver error caused “virtually all” of the unintended acceleration problems that have plagued the carmaker for the past decade.

Per the Wall Street Journal, NHTSA analysis of the affected cars’ “black boxes” found instances in which throttles were open and brakes hadn’t been deployed, suggesting drivers were pressing the gas, not the brake. (NHTSA isn’t commenting.)

The dreaded sudden unintended acceleration is supposed to have caused up to 89 deaths in 71 crashes since 2000.

Admitting in advance that my reasons are somewhat circumstantial, I would counter that Toyota

1. Has failed to provide solid evidence to refute a university researcher’s claim that the electronics wiring could be the cause, and that the car’s software lacked a fault code to point out the defect.

2. Has failed to explain why the rate of accidents attributed to SUA is not similar in competitors’ vehicles.

That said, the shims the carmaker has installed beneath the accelerators, the complaints over SUA appear to have subsided. Perhaps Toyota was correct, after all.

(Full disclosure: My wife drives a Prius.)

5 Predictions for the Second Half

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Here’s my 5 predictions for the second half of 2010.

  1. All of 2009’s 10 largest EMS companies – Foxconn, Flextronics, Jabil, Celestica Sanmina, Cal-Comp, Elcoteq, Venture, Benchmark and Plexus – will be intact at year end, and with the exception of Elcoteq, will finish 2010 in the same order.
  2. One of the mid-tier publicly traded EMS companies will be acquired, however.
  3. Component availability issues will not ease until mid 2011.
  4. Foxconn’s many employee problems will blow over as the media tires of the story.
  5. “Computer-aided innovation” will become the big buzzword in software.

Money Trails

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Should governments subsidize electronics manufacturing?

A simple question, with no simple answer.

Some call it smart investments. Others deem it corporate welfare.

In the US, reams of domestic trade groups — including NAM, IPC, and the erstwhile EIA — annually spend hundreds of thousands of dollars of their members’ dues trying to convince government to allocate funds their members’ way. Some states offer grants, tax breaks or rebates for worker training and equipment buys.

China offers enormous tax breaks, shipping subsidies, training grants and other financial assistance.

In Canada, provinces commonly set aside ample funds to aid manufacturers looking to add new equipment. Consider how much easier life would be for the typical small EMS company if someone else wrote the check for a new placement machine. But then again, that money comes from somewhere: other companies, perhaps in other industries, and of course, you and me.

Thoughts?