Creative Electron's Bill Cardoso on the iPhone 10 Teardown and Much More

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I met Bill Cardoso, CEO of Creative Electron at the West Penn SMTA Expo, one of the small tabletop shows that the local SMTA branches have each year (Note: these are free and very worthwhile—check out the one in your area). He gave a presentation and I was curious to learn more about it.

Patty Goldman: Bill, why don't we start with you telling me a little bit about yourself, and then your company.

Bill Cardoso: Creative Electron is the largest U.S. manufacturer of X-ray machines. This is a company I started in my garage. Feels like yesterday, but it's been 10 years now. We've grown quite a bit, and we focus on X-ray inspection for the PCB and SMT markets. We also make X-ray machines for non-destructive testing and other applications.

Goldman: How about yourself? What's your background?

Cardoso: I'm originally from Brazil, and I started my first company when I was 17, also in my garage back in Brazil. I sold that company when I graduated from college, which was the same time I moved to the United States. While still in college, I got an invitation to work for the U.S. Department of Energy to do high-energy physics, and nuclear research for the U.S. Government. So that was technically my first job after college, and I did that for 10 years. I was in Chicago at Fermilab—Fermi National Accelerator Laboratory.

I spent 10 years there, and during that time I also got a master’s and a PhD in Electrical Engineering, and then an MBA from the University of Chicago. When I was done with all that, and Chicago was winding down in my career, I moved to Southern California to work at a small company in San Marcos, just north of San Diego. That's a company that I ran for about a year, and then I acquired it as Creative Electron.

Goldman: How has business been?

Cardoso: From 2015 to 2016, we doubled the company. We doubled again last year, and we're on track to double again this year. Growth can be challenging. Hiring is one of the biggest challenges we have nowadays to find people to keep fueling the growth. But the basic business fundamentals are solid, and we're very happy. Business is very good.

Goldman: That's quite an accomplishment to double every year for several years.

Cardoso: Several things work well for us. That’s our DNA and the core of how we do business, and one of the critical things that set us apart is the fact that we are “Made in U.S.” Our machines are 100% made in our facility from design to manufacturing. As a matter of fact, our whole supply chain is within about 600 miles of our facility. We keep a very tight grip on our suppliers and our production line.

We have everything under one roof, and so our software development is in-house, our mechanical engineering, electrical engineering, everything is part of Creative Electron. And having that level of control allows us to be the only X-ray company in the world that offers a three-year warranty on our products. That's something else that sets us apart from everybody else. It's that extra piece of mind that we're able to offer our customers. Because, looking at our track record, our machines don't break. And when they do, we quickly know how to fix them and get them back to operating.

Goldman: Please tell me about the presentation you gave here at the West Penn SMTA Expo.

Cardoso: Of course. The paper we presented today was about the teardown of the iPhone 10, which is Apple's new flagship phone. We've been doing teardowns for many, many years now, and we collaborate with a great company called iFixit who's also in California. And we're geeks at heart so taking things apart is just so much fun. And when we can add that to business insights you can gain from these teardowns it makes it even better. The iPhone 10 is a real interesting device because it brings a new type of substrate to the mass production market that we hadn't seen before in smartphones using this subtractive technology.

The bottom line is that traces and spaces are getting smaller making our inspection job harder and harder. Because now we need more magnification on our machines to see tinier and tinier pieces. The miniaturization pushes us to high magnification, high-resolution X-ray machines, and other technologies like tomography that we have to offer our customers as they start looking at embedded components. For example, the iPhone 10 is an interesting way to foresee what we in U.S., what the U.S. contract manufacturers, will be doing in the future.

Goldman: In the near future, I would say.

Cardoso: Near future, yes. I started my presentation with a photograph of the motherboard of the very first iPhone. Ten years ago, that was science fiction for us, to put that together. Most U.S. contract manufacturers would have thought it's so high end and so technologically advanced, but we look at that board today and anyone can build that board, right? It's commonplace. I showed the audience the iPhone 10, and I got the same reaction: Look at how small those components are. I'm pretty sure in three or four years it will become commonplace, and then we'll be looking at what's next.

Goldman: Yes, we’ve talked a lot about HDI, high-density interconnects, and how they were in Japan and Taiwan for so many years; now, everything is high density.

Cardoso: Everything is high density.

Goldman: And one of the original definitions of high-density interconnect was lines and spaces less than six mils and lasered vias. Well, who doesn't do six mil lines and spaces now? It's ubiquitous, and now things are far more advanced. What is the line and space on the iPhone 10?

Cardoso: One mil line and one mil space, and they're building the substrates now almost like semiconductors. It's an additive technology instead of subtractive.

Goldman: Things are merging.

Cardoso: Yes, things are merging. It's very interesting. And in one of the slides that I have it shows the companies at different stages of the supply chain from the chip designers all the way to the OEMs. And what's interesting is to see how mergers and acquisitions are uniting some of those technologies that before had been very well-established. Because now, with the substrates like the motherboards becoming almost like the mergers themselves, those technologies are merging, those companies are merging, and the forecast is that by in the 2020s we're going to see 1” x 1” multichip modules instead of large motherboards, and that's going to do it all. That's the future. We need to figure out how to make it and how to inspect it, and what kind of X-ray machines we're going to need to have to get there.

Goldman: And you had better get them soon, right?

Cardoso: Sooner rather than later. Yeah.

Goldman: We've been hearing a lot of talk about 5G, and what all that means. The iPhone 10 must be the leading edge of that, at least of all this connectivity and what needs to happen in circuit boards, assembly, and chips. What do you see?

Cardoso: Well, that's one of the challenges. When you talk about smartphones, what makes it interesting is the wide range of radios that must be supported to operate worldwide. I’m referring to LTE 5G, 4G, or even 3G technology around the world, and you must be compliant to all these different technologies. That's one of the things that is an impediment to miniaturization because of all those radios inside your phone.

If we could simplify that, we would. But 5G is something that we're going to see soon, and it will be interesting to understand how Samsung and Apple are going to manage the battery life of the phones for higher bandwidth and streaming. That's where we need to get better, Patty. We need better batteries that are much, much smaller. The batteries are too big.

Goldman: The batteries are so big that it doesn't leave much room for everything else, right?

Cardoso: Exactly. That's why we keep squeezing this out. I have a slide showing X-rays of the first iPhone all the way to the iPhone 10, and what you can clearly see is that the phones got bigger, but it’s just because the batteries got so much bigger. And the proportion of battery to electronics used to be almost one-to-one because the batteries used to sit right behind the electronics. Now the electronics portion is down to a quarter of the overall real estate, and the batteries are taking most of the space.

Goldman: Wow. I personally wouldn't want my iPhone to be any smaller because I wouldn't be able to read it, but it's interesting that most of what’s in there is all battery. We need some new battery technology too, right, so you can squeeze more other stuff in there.

Cardoso: Yes, we need some new battery technologies.

Goldman: When you say smartphone, I'm thinking yeah, they are very smart.

Cardoso: One of the things that the iPhone 10 brings that's unique is the A11, this bionic chip that they developed for the iPhone 10, which has a big chunk of a neural processing unit. So it has a GPU, has a CPU, and has an NPU. That's a set of neural networks, so it does machine learning on the fly, and that's critical for the Face ID.

Goldman: So that's already in place.

Cardoso: Yes. The iPhone 10 has an infrared dot projector that projects 30,000 dots on your face. It must be infrared, so you can do it during the night with no light. And then we have an infrared camera that reads those dots, and the NPU is critical to identify that it's your face even if I'm wearing glasses, or not, or if I grow a beard or I wear a hat. It could still identify. It's amazing.

Goldman: Suppose though somebody had a mask of your face.

Cardoso: The infrared doesn't project the same. I mean people have been trying that, and then it doesn't work. However, twins are an issue.

Goldman: That's very interesting. Do you have anything else you'd like to add here on this whole subject?

Cardoso: We're in the market to make the best X-ray machine in the world. That's our mission, and that's why we've been working hard. We have an incredible team, and we're on the path to do just that.

Goldman: Now I would guess not only do you want to make the best X-ray machine, but you want to be able to help your customers to be the best while you are at the forefront. Thank you so much for your time.

Cardoso: Exactly. Thanks so much, Patty. I appreciate it.



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