Publishers Executive Council Interview

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SMT Magazine`s Publisher`s Executive Council consists of 38 electronic industry executives hand-picked by group publisher Marsha Robertson. They share their expertise and insights with our editorial staff and act

as a sounding board for new ideas and

concepts. 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 component industry`s leading marketing managers, Craig Hunter.

Hunter is currently the strategic marketing manager for Myrtle Beach, S.C.-based AVX Corp. Prior to transferring to the United States three years ago, Hunter cut his teeth as the company`s European marketing director and was based in the United Kingdom for five years.

During that time, Hunter experienced change firsthand. He felt that his experience in Europe "was a microcosm of what is

happening in the world today." At the time, Europe became more open to trade within the European Economic Community (EEC) boundaries and all of Europe felt the effects of a unified Germany. Hunter said that he felt that the timing of these events forced the market to become more global in terms of pricing, distribution and servicing customers.

Before joining AVX, Hunter worked in the distribution business for more than 10 years, marketing the complete spectrum of components from resistors to semiconductors.

QBriefly summarize the state of the component industry today.

HUNTER: Demand for electronic components continues to grow at a healthy pace. Intermittent hiccups have not shaken overall growth. The industry appears to be a little less susceptible to regular "feast or famine" scenarios like those of DRAMs during the 1980s and early 1990s - though some areas still face periodic shortages.

At the same time, the number of components used has mirrored this growth and billions have replaced millions in terms of overall market demand. This has resulted in significantly higher investment costs, particularly for industry leaders. Naturally, private companies have more difficulty funding these expansions - making joint ventures and acquisitions a common feature of today`s marketplace.

Technology advancements continue to grow in importance. Having the smallest, fastest or most integrated device is key in enabling customers to provide unique end-market solutions. It drives future demand and is increasingly differentiating "the best" from the "rest of the pack." Technology costs, but it also provides a better rate of return than commodity parts and, in some ways, insulates the market forces that can cut deeply at certain times in the market cycle.

QWhat is the status of embedded passives in printed circuit board (PCB) assembly?

HUNTER: Embedded passives are still in the early stages of development. There are a number of hurdles I see, including yield, that provide some major barriers for those involved.

On the other hand, integrated passives (IPC) are already established in the market and are used in many of today`s cell phones and computers to reduce component count and save space. AVX believes that it is a leader in this area, and the unique and varied technologies the company has available enables it to meet these market trends as well as develop new products for future market needs.

Demand for IPCs is currently well ahead of normal growth and is fueled by next-generation equipment. This is typical of technology-based markets, where innovators prosper.

QHow do you work with equipment suppliers to enable technological advancements in the surface mount industry?

HUNTER: Communication with design engineers is the key to meeting the demands of tomorrow`s market. System frequencies continue to rise, while portability and functionality are other strong factors. To stay ahead of the curve, you have to know what`s coming, and have the resources and technology to achieve it. This can only be done by working with the customers` engineers. These important people are very busy, yet I find they are appreciative of the ideas and support a technology-based component manufacturer can offer. Together, we usually find a way. They help us identify markets and we help them meet specific design targets and often provide added value in terms of size or performance.

QWhere is the surface mount industry headed over the next two to three years?

HUNTER: The surface mount industry is now dominated by contract manufacturing. Just as component manufacturers needed high-volume production resources and technology to be competitive, production is now being done by large manufacturing operations that have the same features, technology and resources. For the component industry, it means fewer, larger buying points, with highly competent technical manufacturing sites and, generally, better relationships with customers. Everyone is committed to working through issues and all parties understand these problems more closely.

At the same time, our key distribution partners are also playing key roles. The big players are now multi-billion dollar organizations with highly automated systems. The combination of products from companies such as AVX, and the services offered by distributors, is a good fit for most manufacturers, including subcontractors that have to react to market changes quickly.

From a component standpoint, the growth of the industry appears safe, and specific shortages apart, there is a better all-around understanding about the needs of the market in the future.

QHow would you characterize business today?

HUNTER: Business is all about partnerships and working together to meet a need. If our customers are successful, we are successful. If they need help, we give it or risk losing market share or position.

In the meantime, they recognize the need to keep us informed. Fewer surprises mean fewer problems all around. Planning for tomorrow - capacity, capability, technology - will get us where we need to go. It`s in the best interest of everyone to work together. I think that`s a common view.

QHow has the Internet affected component distribution and supply chain management?

HUNTER: Right now, the Internet is bigger in the United States than the rest of the world, but it is growing and the rest of the world is catching up. In the next six months, it is projected that 50 million more people will use the Internet for the first time. Today, most people in our industry have made a transaction on the Web; this was not true a year ago.

Distribution e-commerce in the component industry is relatively well positioned and, in some cases, has led the way. This is great because ease of doing business stimulates overall demand by improving time-to-market.

QWhat is AVX`s Internet distribution strategy?

HUNTER: AVX is lucky. We have industry leaders in our distribution team and they are at the top of the pile in terms of the Web. We are very supportive of their activities and recognize the need to work with them to get the job done. We are looking at our Web site to offer certain things, such as technical information, including our spice-modeling program, which was a first. In the meantime, our distributors are the logistics experts who can offer customer service that help us meet the market`s needs.

QWhat are the latest developments in component materials? How is AVX meeting that challenge?

HUNTER: Component materials are continually in development at our research facilities around the world. On the ceramic capacitor side, we have a new facility in Myrtle Beach, S.C., producing nickel-based parts.

For tantalum, we have the smallest capacitor available in the industry. This is based around a unique manufacturing process.

New, carbon-based materials used to make super capacitors have been developed and samples were due out late last year.

For other devices, including IPCs, the broad range of technologies available to our researchers enables us to offer a tremendous variety of product potential and, therefore, address a wide assortment of customer needs.

QWhat steps has your company im- plemented to address the envir- onmental issues that affect the global PCB industry?

HUNTER: The environment is a concern for everyone. AVX eliminated the use of ozone-depleting materials in all of its locations in 1993. In fact, my com-pany developed a "best-in-class" audit and rating package that we`ve implemented on a worldwide basis covering environmental and safety issues. Looking ahead, we should meet ISO 14001 in every one of our facilities around the world by March 2000.



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