Changing Times

Many name brands are now gone, never to return.* Others have been sold off (merged into others) and will be bled for opportunistic sales. Their product ranges included dry film photo resist, drilling machines (laser and mechanical), phototool generators, test and inspection equipment, plating solutions and additives (electroless and electrolytic), etching solutions, solder masks, SMT assembly systems, OSPs, and more.

A number of new promising product innovations have not gained traction and may be doomed. Why? Can they be saved? Should they be? How? Is poor time-to-market the cause? Is failure to listen to customers and prospects the cause? Is myopia the cause? Is the lack of focus the root of deferred results? Is failure to seek help (advice? JV?) the problem? Are the products/services not ready for prime time? Does belief overshadow reality? How big is the realizable potential? Where is it? Do they meet customer needs? How should the wares be sold? Should they have been abandoned? How should after-sales service be provided? Will they be lost in the rush to increased board and SMT demand later in 2014? Who is the competition? What role does pricing play? Do they have not-in-kind competition? What can be done to salvage the project in 2014? What should be done?

What new products/services do you believe are needed for 2014-2015-2016?

Stay tuned! We will address these and other issues in “Weiner’s World” in 2014.

As I was reflecting over the relatively poor overall circuit board industry performance of the past two years, my mind wandered back a little more than a quarter of a century ago to 1987 when I gave Shanghai Mayor Ziang Zemin** (and former Electronics Minister of the PRC) a tour of a simulated surface mount production line at the first NEPCON show in Shanghai, China. At that time the circuit board industry there was literally in its infancy. It is difficult to believe that China, in such a short period, has become the world’s leading production site of PWBs. It has become the location of choice for manufacturing boards for the major Taiwan producers. It has become a major source for Japanese and Taiwan firms, too.

The International Printed Circuit & APEX South China Fair, with more than 1,900 booths already sold for its next production, has become the largest show for our industry in Asia.

Specialty chemicals and advanced laminates for the interconnect industry are now produced in China. Manufacturing equipment of increasing competitive quality levels for board fabrication, test, and assembly is made there. China branded vehicles and electronic devices are emerging at a rapid rate with an eye on the domestic market as well as for export.

The $64 questions are: What will the next 5 years bring? How will the other “developed” countries compete? On what basis? Who will fund next-gen products and processes? Will only the “giant” operations succeed? Will new businesses have to really focus on — and be satisfied with — profitable niche markets? Will product life cycles be long enough to justify their development costs? Will new types of partnerships be needed to succeed? Will smaller, lighter, faster boards and devices lead to shorter product life and early obsolescence?

I believe that IC and display demand will increase strongly in the first half along with assembly orders. Board production will feel an upsurge in the second half of 2014 with HDI and rigid-flex boards leading the way.

I liked the theme of next year’s (December 3-5, 2014) International Printed Circuit & APEX South China Fair “Innovation Through Resilience” but wonder if the reverse, “Resilience Through Innovation,” might not be better.

The Japanese yen slid to its lowest level, 104 yen/dollar in almost 7 months. I remember 300+ yen/dollar on my first visit to Japan in the early 70s to present a paper at the first NEPCON Japan event.

… and yet, there is a feeling of déjà vu

Japanese electronics companies are not reaping any benefits from the weaker yen. They have slowly outsourced most of their manufacturing needs to China and other Asian countries over the last two decades. It is extremely difficult to flip the switch and return manufacturing to Japan (or America). According to DKN Research, printed circuit manufacturers are in the same boat, and remain pessimistic about future market trends.

Direct imaging is moving towards becoming “the standard” for primary imaging with a shift from laser to LED in the works. More than 400 of these systems are reported to be in use. Direct imaging of solder mask will expand as photoimageable products requiring less energy to expose are brought to market in 2014. HDI continues to come on strong and should grow 15-18% in the region next year even though the overall outlook is for a soft first half. The use of advanced high tech laminates continues to increase. Greater interest in the employment of robots for SMT manufacturing is developing to counter the continued annual wage increases mandated by the Chinese government. Automotive electronics remains strong. The Shenzhen police department has started to use all electric vehicles (from BYD) with roof-top video cameras and lighting.

We expect the purse strings for capital equipment acquisition to be loosened after April. All are awaiting to see what he required minimum wage increase will be next year. The “new” government is also reported to be signaling that it is increasing its battle against corruption and waste with a new guideline to prevent government officials from using 5-star hotels in 2014. We note that manufacturing companies in China are taxed even though they may have losses.

The island political situation continues to cause some disruption in electronic equipment businesses between Japan and China. Taiwan has now asserted its claim to the barren islands under territorial dispute between Japan and China. North Korea has followed China’s lead and expanded the sea area over which it claims protective rights. We believe that a new wave of emigration from Hong Kong to Vancouver is in the process of starting as young educated families have decided that it is a “better place to live.”

The Hong Kong government has apparently decided to “give” $100 million to poor people (up to $10,000 each) sparking a series of protests (including a column in the HKPCA journal) stating how the money could be better spent on education, food, facilities, technology, job creation, etc.

*An Italian company bought the former Dynachem logo and trademark “Laminar.”

**Ziang Zemin was named President of the People’s Republic of China (PRC) in June 1989.

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About Gene

Gene Weiner has spent his entire career -- spanning more than 50 years -- in the printed circuit and semiconductor industries. He spent the early part of his career in R&D as a student technician at MIT Lincoln Laboratories, then became employee no. 4 at Shipley, and later vice president of sales and marketing at Dynachem and president of New England Laminates. He has been a consultant to leading materials, circuit board and semiconductor companies for several years, and sits on the board of Wong’s Kong King International and the MBA advisory board of the Malcolm Baldridge School of Business at Post University. He was inducted to the IPC Hall of Fame in 2006.