‘Follow the Money’

Although all the presentations and keynote speakers at the Electronic System Technologies Conference in Las Vegas in May were of value, interesting and well-presented to those who attended the various tracks, several caught my attention as being especially worthy of further pursuit. One was the apparent strength of 2.5D solution among a variety of packaging challenges and options. The other, which affects all of the members and segments of the microelectronic supply chain in pursuit of the future and funding, was the stated need for a new business model. R&D and manufacturing funds, profit margins, consolidations, time-to-market have all served to squeeze everybody’s budgets, cash flows and bottom lines, save one group — the OEMs. The advice given was to “follow the money.” Bringing the OEMs back deeper into the supply chain equation may be the only practical solution to selecting and funding future commercially viable solutions — both large and small.

How does one stay linked to the technology changes that blur the clear definitions of various segments of the electronic packaging industries? Please note that I said “industries,” not industry. Will they all wind up the purview of a handful of giant corporations and organizations? How will one find new promising technologies that apply? How will these be funded to get beyond the alpha demonstration or beta stages? Who will adopt and sponsor those that are not yet finished items to which standards can be developed or applied, e.g., process or breakthrough proprietary materials, or production or test/inspection equipment. (I am personally  aware of several that have demonstrated proof or principle, moved beyond the alpha stage, or are just preparing for scaled up production. These are in jeopardy of languishing into oblivion as “no one” wants to invest in “Western” inventions in the PCB or PCBA industry during the current economic malaise.) There is still a prevailing attitude of “I tried that” for advancements in prior technologies that may now make them commercially viable. Perhaps some answers may be found at the CAMEST formation meeting or the proposed resurrection and reconstitution of the TMRC.

Are you following Charlie Barnhart’s columns on EMS, ODM and OEM trends and business? His recent publication on 10 global trends confronting OEM operations is fascinating and chock full of ideas and stimuli for those working on strategies to move forward in the rapidly changing marketplace. Of note is his perspective, with which we agree, on the rate of increasing labor costs in China, slowing growth of outsourcing to EMS companies, unprecedented risk in supply chain sourcing, and shorter demand cycles. He states that OEMs have fewer resources. This applied to more than just OEMs. It includes suppliers of manufacturing equipment. This also provides ne opportunities for creative planning and actions.