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

Devil’s in the (Dynamic) Details

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While I remain unconvinced the acquisition of Coretec was the right move at this time, I must applaud DDi for its deft moves to bring the company four straight quarters of net profits in 2009. That’s not something many publicly traded board shops can brag about.

Something to watch going forward is whether the company ups its capex spending. For obvious reasons, 2009 should be considered an outlier, but DDi’s capex budget was $3.6 million on $158 million in sales, or roughly 2.3 of revenues%. Given the need for companies like DDi to remain ahead of the technology curve, that number probably needs to rise going forward.

Toyota: ‘Electronics Not Ruled Out’

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In a move that will only add fuel to the fire, a top US Toyota executive yesterday testified that the automaker has not ruled out electronics as a source of the sudden acceleration problems plaguing the company’s vehicles.

Sudden acceleration “has many, many causes,” including transmission software problems, faulty cruise control and even engine revs caused by engaging the air conditioner, he said, according to the LA Times today.

It is the first time Toyota has acknowledged publicly that the cause of sudden acceleration in certain models might be related to something other than the floormats.

To make matters worse, a professor of automotive technology claims to have found a flaw in the electronics system of a Toyota that “would allow abnormalities to occur.” Finding the flaw took about 3.5 hours, he said.

This story, against all odds, continues to get worse for Toyota. The company hired an outside firm to conduct testing on its defective cars; that company claimed the electronics were not at fault. This latest revelation — though hardly a smoking gun — just adds to the controversy that Toyota is hiding something.

A Shot at the Fox

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Kudos to the Washington Post for its condemnation of Foxconn’s heavy-handed treatment toward humans. And an extra high five for pointing out that while arguing with Foxconn is futile, the effective response could be to boycott products designed by Foxconn’s customers.

But it’s sad to say that the WaPo’s editorial — a blog, really — came only after Foxconn workers were accused of attacking a journalist. Foxconn employs hundreds of thousands of workers. Should not their fates matter, too?

Bracing for the Parts Shortage

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As Jabil, Sanmina-SCI, Flextronics and others have noted, component shortages are becoming more prevalent as the recovery takes shape.

Worse, the pain is expected to increase as demand picks up. Some EMS companies are now using the dreaded “A” word — allocation. Others say they have been cut off by their distributors: orders placed weeks ago have simply been canceled.

For most of their history, semiconductor manufacturers made capacity expansion decisions outside the normal cyclical swings. In 2009, however, expansion effectively stopped. We will now pay the price — literally.

Memory, which has been in a glut for years, will suddenly become hard to come by. The December quarter was the best since the first quarter of 2007, as DRAM makers topped $8 billion in revenues. And as iSuppli noted last week, an explosion in smartphones is straining NAND-type ?ash. According to the research firm, each iPhone — the largest application for NAND — uses an average of 35.2 Gb of NAND. “This huge growth is likely to lead to some periods of undersupply for the year,” the firm says.

We could have seen this coming. This situation was set in motion following the drastic tech meltdown of 2001-02, when some companies were quoting material lead-times of up to six months! Since then, the supply chain has considerably tightened, and inventories have been kept low — too low, in fact, according to the Institute for Supply Management.

But not to me. I would rather see a constant capacity crunch than the wild swings of yesteryear. What companies must now resist is the inclination to take parts from wherever they can (thus increasing the risk of counterfeits) and the pull to bring on so much new capacity that they turn the tide and set in motion future oversupply conditions.

Orbotech’s Outsourcing Twist

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Contracting assembly certainly is nothing new around these parts. Semiconductor design firms routinely outsource waber fab and packaging. OEMs have sent out everything from systems design to circuit board layout to component assembly and test. Indeed, our sister magazine, CIRCUITS ASSEMBLY, has covered the electronics manufacturing services industry for 20 years.

But a new deal between Ultra Clean Holdings and Orbotech puts a slightly new twist on an old paradigm.
Under the agreement, Orbotech will outsource production of certain AOI machines to Ultra Clean. Given that designing and building AOIs is considered to be Orbotech’s core competency, it would appear that the OEM is rethinking even that part of its business model.

Are process equipment makers next to follow end-product OEMs like Cisco and IBM into full-scale outsourcing?

In the Hunt

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Dear Peter Huntsman,

Congratulations on that fat bonus check the board of your eponymously named company decided to award you. I’m sure that $600,000 will mighty nice sitting aside the$1.5 million or so in take home pay you earned last year.

All in all, it’s not a bad outlay for an executive of a company whose revenues have fallen three years running. Indeed, after scoring a cool $632 million (and $1.1 billion in financing) as a walkaway fee after the attempted Hexion takeover went sour, maybe that would be a better business model for you. Maybe it would make up for any lost revenue from sales to Iran. It’s especially gratifying, I’m sure, after certain media reports held that none of this might have come about had the one-time object of your affection had the good sense to pony up for better lawyers.

Care if I make a humble suggestion or two for what you might do with this unexpected windfall? Take a couple hundred thousand and put it in an account for the expenses of the 1,200 or so employees Huntsman let go last year. Set aside a few extra bucks for Sam Scruggs, your former general counsel who, oddly enough, “resigned” on Dec. 28. (Talk about bad timing.) But don’t bother renewing those opera tickets, because apparently you are tone deaf.

Your friend,

Mike

What’s Your Q?

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We’ve added Merry Elrick’s just-launched EMS Buzz blog to our blogroll.

Merry writes on B2B marketing for Q Circuits, an EMS company based in the north Chicago suburbs. Some recent topics are on customer loyalty in a recession and the impact of Google’s dealings in China.

One key graf of hers bears repeating:

You cannot, repeat, cannot, control what your stakeholders see or hear any more even if you don’t like what it is. The Internet, social media, instantaneous news and our way of life in the 21st century simply preclude the concept of control. China is like brands of yore, sending out carefully crafted messages to the marketplace through tightly controlled channels.

I’m looking forward to reading more from a new voice on the EMS scene. Read her here.

The Heartbreak of Units Mismatch

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A little extra checking may take a little extra time, but it can save a lot in the end. This sort of thing just bums me out. I’ve done it and similar things a few times myself. I’ve used a library for a connector with the same footprint, but smaller diameter pins than my chosen connector. That was a bummer too.

My best guess is that it’s a 0.1″ (2.54 mm) spaced footprint on the PCB and a 2.5 mm pitch part. It almost works. You might not even notice if it were a three or four pin part. At six, you’d certainly notice and at something from there on, the part simply will not fit.

In a prototype world, you may be able to get away with bending the pins a bit and forcing them a little way in, but maybe not. In a production electronics manufacturing environment, most certainly not.

Duane Benson
In the world according to Google, it’s only 72,000 beard-seconds off.

http://blog.screamingcircuits.com/

Did DoD, State Faceoff on TTM Deal?

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There is a rumor — and I strongly emphasize “rumor” — going around that claims the US Department of Defense sent a strongly worded letter to the State Department in opposition to the TTM’s pending acquisition of Meadville Group’s printed circuit board operations.

All of which makes yesterday’s news that the Committee on Foreign Investment in the US has no objection to the deal that much more interesting. The CFIUS is an interagency group whose members include Treasury, State, Defense, Homeland Security and other agencies.

I have contacts within the DoD acquisitions office. I’m trying to find out more on this. Stay tuned.