Caveat Lector

Mike Buetow

If the market is big enough, sooner or later Google will join it.

That much was laid bare in late June when the search giant cum OEM announced its latest venture, Visual Inspection AI, a new “purpose-built solution” designed to help businesses, including manufacturers, reduce defects and cut operational costs.

Now before you start doubting Google’s temerity to dive into technology that cuts across almost every industry imaginable, remember we’ve been here before.

While the company today still counts on its hugely successful targeted search marketing program for the bulk of its revenue and profits, several other businesses it has launched have made serious inroads in their respective markets. These include broadband; telecommunications; autonomous vehicles; and human health gambits (marketed under the Verily Life Sciences name). Acquisitions brought it Nest Labs, the maker of smart thermostats. Less front and center, but just as integral, are Google’s vast data centers, also known as server farms, which power its reach into just about every precipice known to man.

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Mike Buetow

Why does Siemens want a content company?

In an era where new packages are coming online quickly, and the number of parts available is staggering – major original component manufacturers can have more than 100,000 items on their line card – human management of all this takes supernatural powers.

And that begins to explain why Siemens is paying $700 million (what?!?) for Supplyframe and its platform for component data, sourcing, and trends.

Indeed, the real value Supplyframe brings is not just access to spec sheets and parametric data, but real-time data trends. What’s available? What’s ramping in demand? And for how long? Supplyframe says it can aggregate use patterns across its 10 million-engineer-strong database to determine answers to these and related questions. It can also drill down by sector and geography to ascertain which components are ramping or stagnating in demand. There’s obvious value in that. That scale is impressive.

Now, one could argue that even real-time data are reactive, whereas what the supply chain needs is predictive, as in forward-looking. No word as to the degree Supplyframe customers have been bowed by the intense and building pressure on component inventories over the past nine months. We’d like to know.

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Mike Buetow

I’m often asked what I think the electronics manufacturing company of the future will look like. I know this: It will be different than it looks today.

Why am I so confident? In part because today’s firms don’t look like they did when I entered the industry in 1991 (yikes!). Back then, dominant players were the bluebloods like IBM, Digital Equipment and Hewlett-Packard (you may know them as HP). These were all-in-one firms. They designed chips, fabbed boards, built assemblies, and shipped their own products.

Then someone got the bright idea that “merchant” (the terme de ce jour, as opposed to captive, meaning in-house) manufacturing businesses could unlock value by spreading costs of production across many customers and ensuring close(r)-to-steady-state operations. In reality, that never quite happened, but the mass outsourcing that took hold has never ceded ground.

There’s a saying in journalism that you should follow the money. As I note in our annual CIRCUITS ASSEMBLY Top 50 listing of the largest EMS companies, which starts on page 36, we track more than 115 publicly traded EMS companies. And that’s even after some really large ones like TPV and Shenzhen HyteraEMS have gone private in recent years. While private equity is in the game today in a major way, we’ve seen this play out before. In the late 1990s and early 2000s, fabricators and EMS companies were the hottest dates at the prom. Then midnight struck in the form of the dot-com bust. Billions in valuation went poof. So did the PE guys. They are back with a vengeance, but it won’t be forever.

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Read more: EMS Past is Prologue

Mike Buetow

Consumer pressure on corporate behavior is cyclical and typically short-lived. Consider “dieselgate.” Volkswagen for years rigged the emissions testing on certain vehicles to appear to meet state and national standards. Confronted with the discrepancies, VW management lied in what would be a futile attempt to cover up its wrongdoings. The transgressions cost the carmaker more than $30 billion in fines and penalties. At the time, it looked like a major hit to the company’s reputation.

We are in an era where focused consumer pressure has the potential for immediate worldwide impact. Primed by social media, buyers have never held so much broad sway. Will this this newfound power to drive electronics industry decision-making?

The nongovernmental organization China Labor Watch routinely pummels Chinese-based manufacturers for mistreatment of workers and labor law violations. The leading media companies in the world pick up its investigations. Yet its efficacy in changing corporate behavior is murky.

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Read more: Branding Citizenship

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