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News
December 31, 1969 |Estimated reading time: 8 minutes
Compiled By SMT Staff
ATE Impacted by Asia-Pacific Shift, Says Frost & Sullivan
PALO ALTO, Calif. — The increasing shift of manufacturing facilities to low-cost areas, primarily China, is forcing vendors of automated test equipment (ATE) for printed circuit boards (PCB) to rethink their business strategies to suit the new cultural environment, according to new analysis from Frost & Sullivan.
The report, World PCB ATE Markets, reveals that the market generated $873.7 million in 2002. This figure is expected to rise to $1.3 billion by 2009.
Social and language issues often demand a radical change in the way business is done, because cultural sensitivity has been known to make or break a deal without being apparent at the outset.
While test equipment continues to be manufactured largely in North America and Europe, a sizeable portion of manufacturing facilities have moved to less-developed areas such as the Asia-Pacific region, particularly China. The large, low-cost manpower pool and the growing concept of "just enough testing," wherein manufacturers apply only the minimum amount of testing required, has impacted overall quality, the analysis notes. This has reduced both the cost of testing and the overall cost of manufacture. However, demand for better testers is growing and vendors that target the easier-to-use, higher test-throughput testers will be more successful.
Contract manufacturers (CM) also are developing test methods as they strive toward more complete design-build activities, venturing into an area previously monopolized by OEMs.
As large CMs undergo globalization and OEMs outsource manufacturing, data coordination between multiple production locations and outsourcing partners becomes strategically important. New test equipment and software needs to be developed to meet this challenge.
Süd-Chemie Achieves Moisture Control for SMD Dry Packing
BELEN, N.M. — Engineers and manufacturers can improve the quality of surface mount device (SMD) dry packing with moisture control solutions from Süd-Chemie Performance Packaging. A single-source supplier of desiccants and humidity indicator (HI) cards, the company protects non-hermetically sealed SMDs from moisture/reflow-related damages.
Non-hermetic SMDs, such as semiconductors, are expensive to produce and highly susceptible to moisture damage. The company's desiccants and HI cards are engineered to meet customer specifications and JEDEC standards for dry packing procedures to ensure a minimum shelf life of 12 months in dry bags.
The ideal desiccant fill for SMD dry packing is natural bentonite clay. While silica gel is best for applications in which the target level of humidity inside the package is above 30 percent, bentonite clay works best for humidity levels below 30 percent. For effective dry packing, a desiccant must maintain an interior relative humidity of less than 10 percent; therefore, bentonite clay is the most preferred desiccant fill for SMD dry packing applications.
PCB Book-to-Bill Ratio
August Book-to-Bill Skyrockets
NORTHBROOK, Ill. — The IPC IMS/PCB book-to-bill ratio for August was 1.14, meaning $114 worth of orders for new boards were received for every $100 billed (shipped). A ratio of more than 1.00 suggests that current demand is ahead of supply, which indicates probable near-term growth. The ratio increased from the July level of 1.08. Sales billed (shipments) in August 2003 decreased 19.2 percent from August 2002, and orders booked increased 7.7 percent from August 2002. Compared to 2002, PCB bookings are down 16.2 percent YTD, while PCB shipments are down 23.6 percent YTD.
August's book-to-bill level increased from July's numbers, while orders booked for August 2003 decreased 16.2 percent below the level in August 2002.
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Q & A: Outsourcing for smaller players
Q: Recently you talked about Design for Manufacturing and whether to outsource a new process. Large OEMs have internal resources to qualify quality sources for manufacturing, but how do small and mid-tier companies take advantage of outsourcing manufacturing overseas to low-cost regions, faced with more limited resources internally?
A: In our competitive market, the trend is increasing for mid-tier companies to outsource various stages of manufacturing. While cost is the overriding factor, the company must be able to select the proper partner and focus on ensuring the supplier will provide high-yield results. This puts the burden on the upfront design, as discussed in the past, to be as robust as possible to ensure profitable results in volume production. Once the decision has been made to outsource production, here are some helpful guidelines.
Carefully define the complexity of the design. Offshore manufacturing provides unique challenges. Communication is key in choosing an offshore partner. Time differences and language can be hurdles. Therefore, it is all the more important to avoid iterative design and schedule revisions. If time-to-market is a consideration, communication becomes crucial. Also, complexity of the design should be a determinant in deciding what region to outsource a project. Determine the necessary volumes. If volumes are high, a vendor who can house the necessary materials and has the equipment and extensive experience with these types of projects is preferable. Also, with the volumes, take into consideration the complexity of the BOM, storage needs and shipping tariffs.
Before making the decision to outsource a project, take a minute to consider the regions and specific needs. While many feel that there are only two regions to consider, China and the rest of the world, today's market is increasingly competitive. Mexico is an attractive region to consider for less complex modules and lower volumes, as shipping tariffs are more attractive for lower volumes. Studies show that manufacturers will continue to outsource overseas because of the high return on investment. Some companies claim offshore costs of 20 to 30 percent of what they usually spend. However, once training costs for personnel in-house are factored in, companies can save as much as 50 percent. An abundance of labor is available, and in many cases the laborers work an extended week as a matter of practice. While there is a risk involved, the return on investment more than justifies the risk.
Daniel F. Baldwin is the president of Engent Inc., Norcross, Ga.
Cookson Electronics Announces New Initiative
FOXBORO, Mass. — Following completion of a worldwide employee, customer and channel partner study, Cookson Electronics is launching a new customer-focused education and marketing program under the banner of "Shared Intelligence."
The Shared Intelligence program will explain and build on the company's integrated process expertise in surface finishing, printed wiring boards, electronics circuits assembly, and semiconductor packaging chemistry and materials. Through the program, Cookson intends to share its minds, analytical and testing facilities, experience, and ability to collaborate and solve problems.
As part of the research leading to Cookson's Shared Intelligence positioning, the company interviewed almost 100 customers. In many cases, OEMs and contract manufacturers told Cookson that they have fewer in-house resources for testing and analysis as a result of cost-cutting programs. In response, Cookson bolstered its services by purchasing millions of dollars worth of technology and expertise, and will soon announce the availability of CE Analytics, a collaboration of innovators, problem solvers and technological resources.
In other Cookson Electronics news, Londonderry, N.H.-based Polyclad Laminates Inc., a Cookson Electronics PWB Materials & Chemistry business, will close its Nantes, France operation. The closure, currently under discussion with local unions, will impact 64 manufacturing and administrative employees. Polyclad will continue serving its European customers from its Perstorp, Sweden and Wipperfurth, Germany facilities.
Polyclad has eight manufacturing facilities worldwide, and European customers will continue to be served by more than 1,300 Polyclad employees worldwide, including 300 technical, sales, production, research and administrative personnel based throughout Europe.
Riverview Partners Publishes 'Entrepreneurial Secrets'
NEWBURY, Mass. — Ken Cavallaro, president of Riverview Partners Inc., published "Entrepreneurial Secrets," a report on the secrets of successful entrepreneurship. The publication reveals proven strategies, tools and tactics based on his 20 years of entrepreneurship.
The publication features six sections describing the key attributes, skills and tools necessary to run a successful business. More than 500,000 entrepreneurs start companies annually; however, most of these businesses do not last five years. "Entrepreneurial Secrets" is a resource to help ensure success.
Riverview Partners is an entrepreneurial consulting and strategic business development company focused on building companies by using Cavallaro's skills. Riverview works with growing companies to identify market opportunities and to build a strategic plan to accomplish their goals.
EMS NEWS
Elcoteq Mexico Receives Quality Award
IRVING, Texas — Elcoteq Network Corp. announced that Elcoteq Americas' Monterrey, Mexico facility has been awarded the 2003 Quality Award by the government of the state of Nuevo Leon, Mexico. The award recognizes those institutions, organizations or companies who have achieved a level of total quality management. The Premio Nuevo Leon a la Calidad (PNLC) is the equivalent of the European Foundation for Quality Management Award or the Malcolm Baldrige Quality Award.
The award was presented jointly by the Technology Development Organization and the Center of Productivity of the government of the state of Nuevo Leon, Mexico. Companies are judged on the basis of eight criteria: leadership, customer satisfaction, organizational planning, personnel development, processes, information and analysis, the company's impact on the community, and the results the organization has achieved. There are four award categories — Industry, Education, Health and Government — and each of those is divided into subcategories based on the size of the organization. Elcoteq was the large company winner in the Industrial category.
Ninety-one companies were entered in the awards program, and only three awards were given, two in the Education category and Elcoteq's award in the Industry category. A trophy and certificate were presented to a group of 40 Elcoteq employees at a ceremony held by the government of Nuevo Leon and state dignitaries at the Foro Pro-Cultura of Nuevo Leon.
Plexus Unveils New Facility
BOTHELL, Wash. — Plexus Corp. completed the integration of its contract design and manufacturing operations here into one facility. The combined facility specializes in product realization for medical and industrial OEMs.
Because medical device OEMs comprise more than 75 percent of it customer base, the site maintains certification to FDA standards as a Class II and Class III medical device facility, ISO 9001/2000 and EN 13485 certifications.
The Bothell facility employs more than 200 people, including more than 50 design, manufacturing and test engineers, and has supported more than 50 OEMs, designing and manufacturing more than 75 products.
Nextek Selects Aegis Software to Improve Efficiency
PHILADELPHIA — Aegis Industrial Software Corp. announces that EMS provider Nextek Inc. purchased their NPI and MES software modules to further advance efficiency, quality and customer service. Nextek is deploying the Aegis Web-centric platform for the preparation and execution of their precision electronics and optoelectronics assembly and engineering services for customers.
According to Nextek, Aegis' software gives the company complete control of the manufacturing process from receipt and conversion of design data and bill of materials, to production monitoring and materials tracking.
Nextek selected CircuitCAM, CheckPoint and Fusion iServer for expediting NPIs and engineering change control, and will implement iView, iTrac, iQ, iMonitor and iPortal for manufacturing execution.