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Publisher's Executive Council Interview
December 31, 1969 |Estimated reading time: 7 minutes
SMT Magazine's Publisher's Executive Council consists of 38 electronics industry executives hand-picked by publisher Jim Collins. They share their expertise and insights with our editorial staff and act as a sounding board for new editorial concepts and projects. These individuals also contribute much to the industry in general, working as leaders within their companies. This month's Publisher's Executive Council Interview features one of the industry's leading innovators: Juki Automation Systems Inc. president Gary Burroughs.
SMT: Please review your company's position in the surface mount industry.
BURROUGHS: Juki Automation Systems purchased the assets of Zevatech from ESEC on November 5, 1999. While Juki was a well known name in Asia, only Zevatech customers in Europe, North and South America were aware of the brand name.
In 1999, Juki was the second largest supplier to the SMT placement industry in the quantity of units shipped. Juki Automation Systems' market goal is to increase brand awareness of the Juki name in Europe and the Americas, and to supply our customers with the highest quality equipment and service.
SMT: What is Juki Automation Systems' fundamental business strategy?
BURROUGHS: Our fundamental strategy is to increase the market size for modular pick-and-place systems in North and South America and in Europe. The fast changeover time and high feeder count allow modular machine flexibility that is not available in turret machines.
SMT: How has the globalization of surface mount markets affected your technology and business strategies?
BURROUGHS: From a business standpoint, we have built our company to support our customers and equipment regardless of their size, expansion plans or geographic location. Many of our larger customers, like Flextronics, Motorola and Bosch, continue to expand into what were once considered geographically remote areas like Brazil, Hungary and Romania. From a service and support standpoint, we must treat these customers the same as if they were located in Chicago, Silicon Valley or the United Kingdom.
From a technological standpoint, equipment must become more reliable, easier to repair and simpler to use, since education and experience levels can vary drastically from site to site within the same company. Juki has always done a good job of having extremely high market share throughout the world, particularly in China where experience levels may not be equal to the rest of the world.
SMT: Update our readers on the state of pick-and-place systems today.
BURROUGHS: Like no other time in the history of our market, there is ever increasing pressure on margins, both on our customers' end products and ours. Our customers must build boards faster, more reliably and more efficiently than ever before. They must be able to change between jobs quickly. Placement equipment must provide both the speed and flexibility to meet these requirements. Most importantly, it must provide excellent return on investment.
As suppliers, we must provide reliable equipment with exceptional price performance. We must deliver products quickly and support the equipment once it is delivered, wherever it is delivered.
SMT: How has placement capability changed over the past five years?
BURROUGHS: Five years ago, placement companies dealt primarily with all passives from 0603s and up along with quad flat pack (QFP) down to 0.015" pitch. Over the past few years, placement equipment requirements have expanded to handle components down to 0201s as well as ball grid arrays (BGA), chip scale packages (CSP), and flip chip devices. Capability of the base system has improved along with component feeding capabilities, vision systems and lighting, as well as the software to meet system control challenges.
With the massive expansion of contract assemblers, who traditionally run on a low-margin/high-volume basis, and increased competition from global placement equipment suppliers, the cost-per-placement ratio of today's equipment must be far better than it was in the past.
SMT: What has been the impact of widespread adoption of BGAs, CSPs and flip chip technologies?
BURROUGHS: The implementation of BGAs, CSPs and flip chip has had a positive impact on today's products. This is particularly evident in cellular phones, pagers, radios and similar products where size reduction is important. Generally, products designed with these technologies are easier to manufacture at a higher yield than previous designs using ultra-fine-pitch parts. However, from the standpoint of the placement equipment supplier, the placement machines have had to become more flexible and adaptable with the capability to handle a wider and ever-expanding component range.
SMT: Where is the primary bottleneck in surface mount lines? How might this be overcome to improve yields without compromising PCB quality and reliability?
BURROUGHS: It tends to be application-specific depending on the end product and the line configuration. The bottleneck in SMT lines varies dependent upon the manufacturing environment. In the U.S. market, with contract assemblers accounting for well over 70 percent of the manufacturing volume, the bottleneck often is in frequent changeovers in the product mix. In the OEM marketplace, the bottleneck can be test or inspection functions, depending on the percentage of each that is required.
SMT: How have equipment users' expectations changed over the past five years?
BURROUGHS: Customers want equipment faster, they want it to perform better and they demand exceptional value for their money. Deliveries in today's SMT marketplace often are measured in days or weeks rather than months, as was the case just five years ago.
SMT: What is the key consideration in the development of equipment/materials/components that sets your company apart from competitors?
BURROUGHS: The key consideration is how to produce placement equipment that is simple in design, operation and maintenance, while accomplishing a wide array of complex tasks (i.e. 0201, placement, BGAs, flip chip, etc.). It also must have extremely good cost-per-placement value. Simple designs mean ease of use, easy and efficient maintenance, and extremely low cost of ownership.
SMT: What is the state of outsourcing in the surface mount marketplace? How does this impact equipment suppliers?
BURROUGHS: By the latest estimates, outsourcing to contract assemblers is the largest market segment in the world and is projected to experience the largest growth rate of any segment over the next five years. Contract assemblers typically operate on lower profit margins than OEMs. To compete in this market, we, as equipment suppliers, need to constantly provide equipment with exceptional value in terms of cost-per-component placed. From a support standpoint, we are expanding constantly in areas of the world once thought to be remote to the SMT high-volume market areas like Brazil, Romania, Costa Rica and Hungary.
SMT: How has the Internet and e-commerce affected the industry?
BURROUGHS: The Internet has definitely made it easier for our customers to learn more about their potential suppliers and the types of equipment and services that we have to offer, which is certainly a positive. It also allows us to learn more about our competition.
We are in the initial phase of using e-commerce in this industry. E-commerce should make it much easier for us to do business with our customers in areas like ordering spare parts and providing services online, free from the issues of time zones and human error. However, as suppliers, a significant amount of infrastructure must be in place prior to implementation.
SMT: What is the status of surface mount standards development? Has SMEMA accomplished its mandate?
BURROUGHS: IPC Association Connecting Electronics Industries has made great strides in developing standards for throughput comparison with 9850. This standard, although still preliminary, allows customers to compare throughput from different suppliers on one standard circuit board design. Although, typically not representative of the customers' product, it provides a good standard by which to compare. However, with any type of standardization process, progress usually is slower than most would like.
SMEMA has done a good job over the years and has certainly accomplished the primary objective in the standardization of SMT lines from mixed suppliers. This has allowed the customer to select "best in class" equipment for their application from mixed vendors and install the line without the worry of physical integration.
SMT: How would you characterize business today?
BURROUGHS: Great. The economy is booming. Manufacturers of electronics are booming.
SMT: Where is the surface mount industry headed over the next few years?
BURROUGHS: Based on the latest Frost and Sullivan report, the industry will grow at a much steeper rate over the next five years than it has the past five years. That's great news for all of us. However, we will always need to strive to provide equipment that is faster, more flexible and easier to use in order to increase our share of the market.