Caveat Lector

Mike Buetow

What do you do when the very thing for which you’ve been asking, nay, begging for years actually materializes?

That would be US government support for the printed circuit board industry. And it’s coming in the form of real dollars, not just platitudes.

As we report in our digital edition this month, the US Partnership for Assured Electronics (USPAE), a subsidiary IPC formed last year to give it room to lobby on behalf of US members without running afoul of its international cohort, has as of late January garnered more than $42 million in taxpayer dollars to manage joint industry-academia programs to tackle electronics-related challenges.

How we’ve waited for this.

Going back to the 1990s, when I worked at IPC, we spent thousands of hours (and countless more dollars) vainly waving our hands in front of Congress’s collective face. And once a year, we would gather in Washington and run from office to office on Capitol Hill telling anyone and everyone how important the industry is. After, we would retreat to our hotel bars and pat each other on the back for a job well done. After many years of this, Congress even passed a resolution. “The PCB industry is important!” they said. “Hallelujah!” we rejoiced. Our souls were saved. Or so we thought. Then the OEMs packed up and moved their orders to Taiwan and China. Poof.

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Read more: An Electronics Holiday?

Mike Buetow

We speak so often of the maturing (“graying”) of the engineers and operators who work in the printed circuit industry, we sometimes overlook whether the same term applies to the companies that employ those individuals.

And yet that matzah ball is hanging out there, particularly when it comes to printed circuit design software.

The textbook definition of a mature market is when it has reached a “state of equilibrium.” This is characterized by “an absence of significant growth or a lack of innovation.”

It goes on: “In a mature market, companies have excess inventory or capacity, products become more homogenized (less differentiated), and there is pressure on prices and profits.”

Can you think of anything in our corner of the world that applies to?

Bare board fabrication comes to mind. Even as the volume and frequency of electronics are exploding, growth at the manufacturing level is nominal, year in, year out. A relative handful of customers, such as Apple, Samsung and Intel, often dictate the winners and losers.

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Read more: Floating in the Mainstream

Mike Buetow

Twenty years has passed since the US was a world leader in printed circuit board fabrication production. And not just in revenues, which tended to run neck-and-neck with Japan. The US also had the capability and capacity to build the largest-format boards in volume.

That was 2000.

I remember talking with Jack Fisher, then the technical director of the tech consortium ITRI, about the coming year. We were reviewing the latest bullish industry forecasts, in which some of the major fabricators were quoting lead-times of six to 12 months(!).

That unbridled optimism prompted Jack to observe that any hope of the US investing in HDI technology would be pushed out at least another year. Since order books were full for large boards, fabs saw no need to invest in next-generation technology.

Or so they thought. Because, as we all know, then the dot-com crash occurred.

It’s hard to believe that was 20 years ago. But we might be edging toward history repeating.

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Read more: ‘Future Factories’ Require Thinking ‘Smart’ Today

Mike Buetow

Hon Hai, better known as Foxconn, has been the largest EMS/ODM company in the world since 2005, when it catapulted Flextronics to gain the top spot. To be sure, Foxconn’s revenues then and now are enhanced by ample non-electronics manufacturing segments, but the depth and breadth of the company is by any measure staggering. In calendar 2019, it reached roughly $150 billion, a mark that is all the more impressive when you consider it doesn’t include sales from some of its largest subsidiaries, such as Innolux, Sharp, and its connector and cable units. Its quarterly revenue alone would make it the largest EMS/ODM in the world. And its annual output not only eclipses all its customers’ electronics sales, sans Apple, but also the next four largest competitors combined.

In pursuit of the almighty dollar, Foxconn is the almightiest. Nothing seems out of its reach. Its founder and erstwhile chairman ran for president of Taiwan. It also dabbled in American politics, putting a massive (if mostly empty) facility smack dab in the soy and corn fields of the district of the then-US House Speaker.

Never one to rest on its success, Foxconn is pushing further upstream into the semiconductor market. Having already snared Albit, three years ago it took a shot at the Toshiba memory business. And as we go to press, Foxconn is making a play for Silterra, the Malaysian maker of ICs, MEMs and sensors.

Hon Hai is on high. In mythical terms, toppling Foxconn would be like defeating Voldemort and Sauron. And then for good measure, maybe kicking the butt of that creepy emperor from Star Wars. Any company would be foolish to take that on, right?

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Read more: A New Fox in the EMS Henhouse?

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