Circuits Assembly blog

Another day, another whine from Greenpeace.

This time, the would-be environmental group complains that several large PC makers are “backtracking” on promises to eliminate certain chemicals from their computers.

In a press release issued today, Greenpeace cites Hewlett Packard, Dell and Lenovo - for “failing to improve their low scores.”

Dell and Lenovo are called out for delaying their migraton to non-PVC and BFR materials, while HP is cited for “[postponing] its 2007 commitment to phase out PVC and BFRs from its computer products from 2009 to 2011. [I]t is not even putting PVC and BFR-reduced products on the market.”

“Greenpeace takes voluntary commitments very seriously and holds companies accountable for their promises. There are no excuses for backtracking, and no reason for these companies not to have PCs free of PVC and BFRs now,” said Greenpeace International Toxics Campaigner Tom Dowdall in the statement.

Which is great, except it’s also wrong.

Keep in mind those scores are set and tabulated by Greenpeace. And note that those targets are constantly moving. Greenpeace exists only to wag its finger at large corporations. It needs enemies in order to survive, even if that means conjuring up ghosts and bogeymen.

Meanwhile, Greenpeace also ignores that the science does not yet support the elimination of BFRs, and in fact, may suggest otherwise. As Dr. Arlene Blum, executive director of the Green Science Policy Institute and a member of Chemists Without Borders noted in her blog in May, “it is difficult to make a causal connection between chemical exposure and health impacts.”

And it ignores that all the major PC vendors now have significant takeback programs in place, providing some level of protection against these chemicals entering the waste stream.

While it pats Apple on the back, claiming its new PC lines “virtually free of PVC and completely BFR-free,” Greenpeace misses that Apple is perhaps the worst of the bunch when it comes to auditing and ensuring its vendors — which include Foxconn — follow acceptable labor practices.

BFRs may be bad, but what’s the alternative? Remind me: Does fire cause pollution?

Check out this exchange from Jabil’s recent quarterly conference call:

Alexander Blanton (Ingalls & Snyder analyst): Okay, second question is you mentioned earlier the possibility that some manufacturers initially might decide to move some things in-house. Do you have any examples of that in your business?

Timothy L. Main (Jabil CEO): I think the one that’s been well-publicized is the Nokia announcement three, four months ago. … Other than that, we don’t have any significant customer accounts that [inaudible] that type of move.

Blanton: Because recently NCR announced that they would in-source some ATM manufacturing and as I can determine, the reason they are doing that is so they can get some tax incentives from the State of Georgia that require a certain number of jobs to be created in the State of Georgia. And it really has nothing to do with the economics actually of in-sourcing. But there was some comment accompanying that in some of the local press that oh, there’s a trend toward in-sourcing. But from what you can tell, is there any such thing?

Main: I don’t think there’s any such thing. I might have mentioned NCR but I’m glad you brought it up. I forgot that that was a public statement that they made, so — you know, these OEMs will have certain drivers, different personalities, and opportunities like NCR has to receive significant tax benefits for an activity that maybe they think can be supported domestically within their own site. [If you take] a couple of data points, a $1 trillion dollar industry and say that’s a trend, I don’t think so.

Blanton: Yes, well, there was a bill in the State of Georgia that if you can create 1800 jobs or more, you can get some tax incentives. Well, the only way they could do that was to in-source this ATM manufacturing because they didn’t have enough people coming from Dayton to meet the 1800 bogey. This is not the way the press presented it but it’s obviously the case, so it had really nothing to do with lowering costs or anything like that.

Main: Right, well, the politics that we are in today are going to really be very negative towards outsourcing and that type of thing. I mean, that’s — let’s just accept that but recognize that the trend to out-source and the cost benefit of out-sourcing are so compelling that these temporary political statements I think will impact the temporary and the broader economic force of what compels OEMs to do what they do will prevail.

Blanton: Well, you are absolutely right. The CEO of NCR bragged that oh, we’re bringing jobs back from overseas when in reality, they are coming from South Carolina.

Egged on by a so-called analyst, Main essentially discounted any trend toward insourcing. But both men completely ignored the recent decision by Alcatel-Lucent to insource an estimated $2 billion worth of assembly. And it misses Ericsson’s announced purchase of certain Elcoteq operations. Moreover, it dismisses the role governments play not just in convincing OEMs to locate operations in their jurisdictions, but EMS companies as well.

In fact, just last year, the state of Florida, along with various local governments, granted almost $35 million in tax incentives to keep Jabil in St. Petersburg. How, exactly, is that any different than what Georgia is doing for NCR?

If Main has a point, it must be hidden under his hat.

With all the talk about counterfeits — most of which takes the manner of the over-the-backyard-fence gossip — I was glad to see this announcement today.

A company that makes bearings announced the confiscation of over 30 tons of counterfeits at a non-authorized dealer in northeast Czech Republic. (The raid also uncovered faked products from other bearing manufacturers.)

It’s not so much that the rats were caught. It’s that SKF, the bearing maker, went public with the news.

Typically, companies prefer to keep such news hush-hush, probably so as not to unnerve potential customers. Shining the light is better, however. It makes clear the scope of the problem, the steps being taken to counter it, and most important, it reminds customers to buy only from authorized sources.

There aren’t a whole lot of measures we can take to protect ourselves from counterfeits. But the measures we can take are highly effective — provided we follow them, and all the time.

During iSuppli’s EMS webinar yesterday, an interesting data point was revealed: 90,000.

That’s the number of workers the EMS/ODM sector has laid off during the current recession. That’s an astounding figure (and assuredly does not include the reported 100,000 Hon Hai purportedly was letting go).

Even scarier than the number itself is the unmeasurable amount of experience and brain power that has been drained away, much of it likely for good. Talented engineers and technicians don’t stay on the sidelines long; they find other jobs — often in other industries.

When all is said and done, that may be a legacy we as an industry will be coming to grips with long after the order books have filled again.

Folks,

Indium Corp.’s product manager, Semiconductor Assembly Materials Dr. Andy Mackie is an expert on solder paste rheology (a word that we’ll explain in a minute). The following is a summary of a chat I had with him recently.

Dr. Ron: What is rheology?
Dr. Andy Mackie: Rheology is the study of the deformation and flow of matter. My fellow Lincolnshire (England) native Sir Isaac Newton postulated that if a fluid were flowing uniformly over a surface that it would exert a stress, t, (force per unit area) on that surface proportional to the gradient of the fluid’s velocity with respect to distance from that surface. The proportionality constant is called the viscosity, usually designated by m. The equation describing this relationship is:

It’s a lot more complicated if you figure in both non-laminar flow, and boundary layer effects as you get closer to the surface, but is a good guide to what is happening in the bulk of the fluid. For laminar flow, if the viscosity remains the same regardless of the shear rate, then this is a true “Newtonian fluid.” Glycerine is a good example.

Unfortunately, scientists soon found out that, for many fluids of engineering interest, viscosity is often not a constant, but varies with the fluid’s velocity gradient (often called the shear rate.) When the viscosity decreases with increasing shear rate the material is called a shear-thinning or “plastic” material. This needs to be differentiated from a “thixotropic” material, in which the viscosity decreases with time, although often the two are seen in tandem. There is also a phenomenon called “rheopexy,” where viscosity increases with time, then relaxes to its original viscosity — something you can experience if you grab a handful of wet sand at the beach, then watch it crumble back to its original relaxed state.

DR: Thixotropic or shear-thinning materials seem counter intuitive. Can you explain them in layman’s terms?
AM: Your kids see it every time they shake a bottle of ketchup. If you imagine that there is a very open structure built of little Lego bricks that holds the ketchup rigid in the bottle, then shaking temporarily smashes up the structure, making the ketchup much lower in viscosity and easier to pour. However, unlike Legos, the gel structure will eventually rebuild itself (a process called relaxation), the speed of which is primarily dictated by particle diffusion kinetics.

DR: What are some common thixotropic materials?
AM: Solder paste is a great example. Its shear-thinning nature is ideal for the printing process. The paste’s viscosity is low as it is experiences a high shear rate when forced through the stencil aperture, ensuring good hole fill and a high transfer efficiency. Then as the solder paste deposit rests on the leadframe, or wafer UBM or PWB pad, the viscosity is high, since the shear rate is near zero, enabling the deposit to maintain its shape and avoid “slump.” Any viscosity changes with time must then ideally either be small or have short relaxation time.

DR: Any final thoughts?
AM: The thixotropic and shear-thinning nature of solder pastes (and other similar electronics materials, for that matter) are very important, but are only part of the whole equation of solder paste stability and performance, as Indium scientists and process engineers are very well aware. I could get into another discussion about whether customers need “tack” or a means of keeping components in place, but I think I’ll leave that for another time. Cheers!

My friend Dominique Numakura writes from Japan that consumer electronics is rebounding in Taiwan, Korea, China and Japan. But, that bit of good news is tempered, he says, by constrained capacity — so many companies cut inventories and took down production lines, they now face material, component and labor shortages, he says.

“Everyone’s warehouses are almost empty! Distributors and suppliers can’t feed the manufacturing houses fast enough. Manufacturing companies have secured large orders for products, but materials are back-ordered, and there are not enough workers to accommodate these new sales.

The result, he notes, is material price spikes.

In Southern China, he adds, things are more grim, with reportedly more than 200 area EMS companies unable to obtain sufficient materials for production, and caught between the higher materials prices and lower end-product margins. Many will close.

This is not unusual. Several case studies have shown as many companies exit an industry in recovery
as do leave during a downturn. They get caught in the cash flow trap, where the upfront costs and associated risk to running the business outweigh the margin.

Not unusual, but unfortunate nonetheless.

Counterfeit electronics components supposedly are destroying the integrity of our hardware.

One estimate holds that “five to 20% of electronic components in distributors’ chains are probably counterfeit” at a cost to industry of some $100 billion a year.

In response, several organizations (not to mention a cottage industry of consultants) have jumped on the bandwagon, launching programs to warn of the hazards (death! destruction! locusts!).

Let’s put aside, for the moment, the obviously inflated numbers ($100 billion, after all, is more than the sum of all the semiconductor revenues of Intel, Samsung, Toshiba, TI, STMicroelectronics, Infineon and Renesas — in other words, the world’s top 7 semiconductor OEMs — in 2007.

The SIA, for example, now has an anti-counterfeiting task force, and is working in concert with SEMI to combat the problem. “Counterfeiting is a serious and growing problem in the worldwide electronics industry,” says SIA president George Scalise. “Counterfeit products pose a significant risk to consumers as well as to the manufacturers of semiconductors and electronic products.

In the UK, something called the Component Obsolescence Group published a list of best practices said to help minimize the risks associated with the growing supply of faked parts.

And of course, makers of traceability software, XRF and other gear have ramped up marketing efforts to pitch their solutions.

But…in all the hue and cry, one thing is missing: The guilty users. Over the past few companies, I’ve asked at least two dozen EMS companies if they’ve seen any counterfeit components. None would admit to it.

Now, we estimate that there are at least 1300 EMS sites in the US, so my sample is hardly representative. Still, is the problem overblown? Or are my contacts – gasp! – lying?

And if they are fibbing, in the end, who gets hurt? (Answer: The customer.) Is it worth it?

All sorts of nonsense is erupting in our industry’s corner of the environmental arena this past week. Let’s go to the tape:

I was recently asked to give a presentation and audit an assembly line regarding minimizing “tombstoning” of passives at a major electronics assembler. As my presentation brought out, tombstoning can be caused by many factors: the reflow profile, the solder metal composition (for lead-free applications, SAC 387 tends to tombstone more than SAC 305), off-center placement, nitrogen reflow atmosphere, buried vias, etc. After two hours of talking, I walked the line that “had a problem with tombstoning.”

As I started asking, it became clear that no one knew the magnitude of the problem.

“How many passives are on each board?” I asked. No one knew.

“How many DPMO (defects per million opportunities) for tombstones have you had recently?” Also unknown.

As people scurried to get the data, it dawned on us that tombstoning might not be as big an issue as was thought. It was more of a local legend.

Finally, we got some data. Each board had about 1000 passives, and the company had produced 100 boards with a total of two tombstones in the past two hours. Tombstones were the only defect. Hmmmmm, two bad boards out of 100 = 98% first-pass yield, not bad! From a DPMO perspective, they had two defects per 200,000 (two defect opportunities per passive) opportunities or 10 DPMO, which is beyond world-class. This level of DPMO would be very difficult to improve on without massive engineering investment. It is “in the noise” and it is likely caused by “common cause” variation.

I then asked how much money it costs to repair a tombstone; as expected, no one knew. My guess was less than $2. This situation is the rare case where yields are so good, it may not pay to make engineering investment to improve them.

This isn’t the point of the story, however. In a case like this, the response — whatever it is — must be data driven. Only with the proper failure rate data, plotted in a Pareto chart, and a complete understanding of all costs, can the appropriate action plan be developed.

Always be data driven!

Are we about to see more changes in the PCB inspection market? Earlier this year, of course, Orbotech sold out its (dwindling) position and Agilent closed its stake. Still, there are plenty of players left, ranging from Japan’s Omron and Sony, The Netherlands’ Marantz, Taiwan’s Test Research Inc., Germany’s Viscom, Korea’s Mirtec and Koh Young,, and CyberOptics, Landrex and YesTech in the US. And that doesn’t even include the x-ray players.

Like Orbotech and Agilent, several of these companies are publicly held, and subject to the pressures and whims of shareholders and the managers eager (or desperate) to impress them. Some firms, like CyberOptics, TRI, Mirtec, Marantz and Koh Young, have been busy developing and introducing new products this year, moving into new plants (TRI), and opening new regional units (Koh Young). Some of the others, however, have been sitting on the sidelines.

Based on contacts in the AOI industry, we fully expect one or more of the remaining leading players to announce plans to exit the industry later this year. It will be a shame, not to mention cause some near-term pain for customers, but over time will lead to stronger, more stable AOI supply base.