CAD Software Pricing Wars Heat Up

Another price/performance battle is heating up in PCB design software, and this time Altium could feel the burn.

Altium has experienced decent growth over the past few years, reaching about $75 million in annual sales. That’s not a huge sum compared to the Big Three of Mentor Graphics, Cadence and Zuken (subsequently referred to as MCZ), but it no doubt is getting the attention of the big boys, given the fairly modest pace of PCB design layout seat growth.

After dropping it pricing on its signature Altium Designer tool from $14,000 to about $5,500 in 2008, Altium then raised them more than 30% a year ago this month, with some reports indicating even larger spikes, plus support.

Mentor today fired a big shot across the bow, pricing its newly configured shrink-wrap Pads suite at an entry level  price of $5,000, including a year of support. A mid-range version is priced at $10,000, in line with Designer once support is factored in.

Mentor made its move to target so-called independent users, those who may work for corporations but have the latitude to go outside the enterprise CAD system for their tools. That sector is characterized by engineering generalists who look for lower seat costs and aren’t driven by the particular tool. Will Altium counter move, or will it take a chance that it can wait out its deeper-pocketed competitor, hoping that Mentor lacks the patience to withstand the margin pain?

No matter how this plays out, a company can only grow so large in the shrink-wrap space in the shrink-wrap space. Enterprise is where the big bucks come from, and that space is dominated by MCZ. And that next move is Altium’s.

 

 

 

 

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Wave Soldering is Here to Stay

Patty was just getting ready to leave her office for a bi-weekly luncheon with the Professor, Pete, and Rob. They had regular meetings like this to discuss new technical topics or to review books. It was Patty’s turn to take the lead in discussing the new book, Rust: The Longest War.

As Patty arrived at the faculty dining room, everyone else was already seated. After ordering, she began the discussion.

“I thought that, overall, the book rated 4 out of 5 stars,” Patty stated.

“It had many interesting stories and brought home that fighting rust is the ‘longest war,’” she went on.

“But shouldn’t the book really be called ‘Corrosion’?” Pete interjected.

“I agree. After all, the best story was about the work that was done to refurbish the statue of liberty, and most of that is copper.  By definition, only iron rusts; copper corrodes. We try to be very specific about the differences in our undergraduate materials classes,” Rob chimed in.

“Rob, I remember you telling us that one student wrote a paper that referred to wood corroding,” the Professor said.

At that comment everyone chuckled.

“We can all agree that corrosion is a big challenge to civilization. But, can anyone think of a big downside if iron didn’t rust?” the Professor asked.

Patty, Rob, and Pete looked at each other and then the Professor as they shrugged their shoulders.

“Think biological processes,” the Professor encouraged.

It hit them all at once, but Pete was the first to comment.

Figure 1.  Rust: The Longest War

Figure 1. Rust: The Longest War

“Blood!” he cried out.

“Precisely! Without ‘rust’ we wouldn’t be here.  Iron’s unique ability to combine with oxygen in the hemoglobin of our blood makes ‘rust’ a requirement for human life,” the Professor explained.

None of them recalled seeing this point in the book.

“So, the conclusion is that rust costs the US over $400 billion per year. But, without it we wouldn’t be here,” Pete summarized as he chuckled.

“Patty, I understand that you had to fill in for Professor Croft as he recovers from a broken leg. The course was Everyday Technology as I recall. How did it work out?” the professor asked.

“Well, first of all, Pete agreed to help. And, it was only for the last two weeks of the term.  The final assignment for the students was to perform a teardown analysis on some electronic product, such as a DVD player, blender, hair dryer, etc.  They had to write a report and give a presentation on their findings.  They worked in teams of 2 or 3,” Patty summarized.

“It’s important to remember that the students that take this course are not engineering or science majors.  The course fulfills a technology requirement for non-technical students.  Most of them had never taken anything apart before,” Pete chimed in.

“Hey! Don’t forget that Patty made me sit in on all of the presentations,” Rob added teasingly.

“So, what were your impressions?” the Professor asked.

“I was impressed by how professional their presentations were and what a thorough job they did,” Pete responded.

Their work was especially impressive considering that almost all of them had never done anything like this this before,” Rob added.

“Anything else?” the Professor asked.

“I was surprised that all of the photos that the students took were taken with a smartphone, even macro shots of small components.  I remember photos from smartphones of 6 or 7 years ago were almost unusable. Those that the students took this semester looked high definition to my eyes,” Patty added.

There was a little more discussion and, finally, the Professor had one last question.

“You all had a chance to see many teardowns. How did it impact your understanding of the state of technology?” the Professor asked.

Patty began, “Pete, Rob, and I discussed this topic quite a bit.  We had to admit that the thing that surprised us the most was that, of the 18 devices that the students analyzed, almost all had a wave soldered PCB with through-hole technology.”

“I agree, we noticed that every power supply board was a through-hole wave soldered board.  I think we only saw a PCB or two that was all SMT.  If the boards weren’t pure through hole, they were mixed technology.  Through-hole and wave soldering are here to stay,” Pete added.

Figure 2. A Typical Wave Soldered Through-Hole Power Supply Board

Figure 2. A typical wave-soldered through-hole power supply board.

“We have to consider that most of the devices were lower tech: blenders, toasters, and one hair dryer,” Rob pointed out.

“But, the DVD player struck me the most. It had a mixed technology board in which one side was wave soldered, and a power supply board that was all through hole and wave soldered,” Pete added.

“I think those of us in the electronics assembly field become so enamored with smart phones and other high tech devices that have SMT-only PCBs that we forget that there are billions of lower tech devices that still use wave soldered through-hole boards.  The technology is cheap and it works, so why change?” the Professor summarized.

“So, wave soldering will likely be around for my grandkids!” Patty chuckled.

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Fewer Reports Not in Altium’s Best Interest

Always a company that operates behind a veil of mystique, Altium will take that secrecy to a new level with its latest board decision which pares its quarterly earnings reports to semiannual announcements.

In a statement today, the PCB design software company said the decision came about following an investor roadshow in Sydney and Melbourne in February, where management pitched the notion that the quarterly reports somehow — and I’m reading between the lines here — distorting and negatively affecting the market perception by obscuring the “steady annual growth delivered by Altium” over past years.

“The overwhelming view of the investor community was that Altium has reached a level of maturity that allows it to focus on driving its business and, consistent with market practice, provide full year and half year reporting,” the company said.

OK, then.

The great thing about quarterly reports is that they force a company to be upfront with investors on a regular basis. Dial that back, and investors are going to make decisions based on data that are often less clear. I’ll be surprised if there’s any mass selling, given that many of Altium’s major shareholders are insiders, with current CEO Aram Mirkazemi holding about 9% of the company directly and more than 11% through holding companies, with the board holding more than 20% of the shares overall. But I suspect they will have a more difficult time attracting institutional investors.

Altium has set as a goal $100 million in annual revenue by fiscal 2017. It’s at an annual run rate of about $75 million right now. As companies get bigger, they need to keep in mind that their responsibility to their investors grows as well. We’ve been supporters of Altium’s unconventionality in the past, including the move to Shanghai, which some predicted would be the death-knell of the company. If anything, Altium has been very willing to think out-of-the-box, to its benefit. Reducing its earning reports is an ill-advised decision, however.

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Will ‘OnCore’ Deal Spur Encores?

Fascinating how aggressive Natel Engineering has been with acquisitions over the past 18 months. First it gobbled up Epic, and this week it announced plans to nab OnCore. Epic was roughly 2.5 times the size of Natel at the time of that deal, and OnCore is almost the same size as Natel is now. Combined, they will form an EMS business with pro forma revenues of $770 million, 13 manufacturing sites and more than 3,700 employees.

And to think that as recently as September 2013, Natel had sales of $100 million spread across three factories, some of which were hybrid thick film, not SMT. That’s a stunning transition.

Can it hold? This latest deal is highly leveraged, and Moody’s gave Natel a B2 CFR rating, (obligations rated B are considered speculative and are subject to high credit risk; the 2 refers to mid-range) and a B1 LGD3 (loss given default) assessment (meaning ?30% and <50%, in Moody’s opinion). After the close, Natel will end up with $340 million in debt, between the new lender and a $60 million note issued by OnCore’s owner, Charlesbank Capital.

We’ve seen huge runups in the past, sponsored by equity capital, that have  burst into flames because the market couldn’t provide the necessary growth to sustain the acquirer’s debt payments. Viasystems is perhaps the most notorious example; that company ended up going through bankruptcy before finally stabilizing and operating in somewhat lower-key manner up until its announced acquisition by TTM Technologies last year. Flextronics went through one major flameout in 1990 before reappearing as a Singaporean company. Of the CIRCUITS ASSEMBLY Top 50 however, today most are few of undue private equity influence.

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For those wondering what EMS or PCB companies might be veering toward financial distress, here’s an interesting tool. I’m guessing Jabil ranks relatively highly on this because of its high exposure to Apple. Companies also seem to be penalized for a high P-E ratio.

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Indicating Polarity on Diodes

Everyone knows which way current flows through a diode. Right? Of course they do. Diodes only permit current to flow in one direction.

Well, sort of.

In the case of your garden variety rectifier, barrier diode, or LED, that’s true. That line of thinking leads a lot of people to assume that you can indicate diode polarity by putting a plus sign “+” next to the anode.

Here’s why you can’t.

Zener and TVS diodes have a breakdown voltage. They are put in the circuit with their cathode on the positive side. In that configuration, they don’t conduct unless the voltage rises above their breakdown point. Zeners and TVSs are used for regulation, transient suppression, and things of that sort.

But wait! There’s more!

Regular diodes can be pointed backwards too. Anytime an inductive load is switched, like a solenoid or motor, you need a flyback diode to protect the switching logic. A MOSFET switching a solenoid on and off is a good case to look at.

When the MOSFET turns off, the current in the solenoid coil starts to drop. As it starts to drop, the magnetic field generated by the current flow starts to collapse. The collapsing magnetic field generates an opposite current, referred to as flyback, or back EMF.

To save your silicon switching device, you put a flyback diode across the coil, or motor, terminals, pointing backwards from normal current flow – with the cathode pointed toward +V. Doind so shorts the flyback current back into the coil, preventing damage to the MOSFET. These are typically Schottky diodes, but can be ordinary rectifier diodes.

A “+” plus sign alone, doesn’t tell anyone anything. For more information on what to do, read this post. Just for fun, read this post too.

Duane Benson
Diodes. Not just for breakfast anymore

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Using the Newest Gen Arm, Part III

The continuing saga of the 0.4 mm pitch KL03 ARM microcontroller. If you haven’t yet done so, read part I and part II.

Today, I have a look at the good, the bad, and the ugly – or more accurately, the good, and the bad and ugly. As I expected, I was quite pleased with the job done here in house. The board is nice and clean, the parts are well centered, and the solder joints are solid. No surprise here.

Here’s a top view of one we did here in Screaming Circuits:

Next, I’ve got one that I did at home. It actually surprised me and came out better than I had expected. Here’s a top-down view of the one I did at home with home-grade tools (No, I didn’t intentionally make it look bad. The board surface is just a bit shinier than the one above.):

Of course, “better” is a relative term. I didn’t say good. I could call this both bad and ugly. I did manage to center the parts quite well — that took a lot of careful nudging with sharp tweezers and and an X-Acto knife blade.

All of those little round shiny spots are solder balls. That’s what happens when you get too much solder on the board, get solder off the pads, or have the wrong reflow profile. They might look harmless, but if there are too many under the chip, the connections could be shorted.

The fillets on the 0201 capacitor are a little lean on solder in the one I did, and there’s a solder ball on the right side, but, again, it looks better than I expected.

Next time, I’ll post the x-rays and show what’s under the hood.

Duane Benson
Carburetors, man.
That’s what life is all about

http://blog.screamingcircuits.com

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Using the Newest Gen Arm, Part II

I’m a bit behind in my blog work — well, way behind, actually. I started this series back in January with the intro post.

Here’s where I am right now:

  1. I have three different sets of PCBs.
  2. One set, I took home to see if it’s possible to solder a micro-BGA at home. (As someone working at a car manufacturer might want to see if they could balance a crankshaft at home, for fun)
  3. Two sets, from our partner, Sunstone Circuits, are here in my desk with parts, ready to go through our machines.

After I’ve got all three sets built, I’ll have them x-rayed to see how they look under the hood. Finally, I’ll solder through-hole headers on and fire up the chips to see if the shared escape system works.

Here’s one of the boards without access to the inner pads:

And, here’s the shared escape:

The main concern I have is that Reset is on one of the inside pins (B4). I’m not sure if I can get the chip to a state where it will operate properly without unobstructed access to reset.

The routing I’ve chosen is probably the only possible option for reset. Pin A4, right above, is used for the single-wire debug (SWD) clock. I’m assuming that can’t be shared. B5 is Vdd, so that’s out. It might be possible to go down. C4 defaults to one of the crystal pins, and D4 defaults to a disabled state.

In the route I’ve chosen, B3 is an ADC input, so it should start out high-impedance, and therefore not interfere. A3 defaults disabled, so it won’t get in the way.

Next step: solder time!

One other thing – The images above show non-solder mask defined (NSMD) pads. Those are standard for BGAs 0.5mm pitch and higher. This part is 0.4mm pitch. Some manufacturers recommend solder mask defined pads (SMD) for 0.4mm and smaller. I’m actually testing several pad styles: SMD, NSMD and solder mask opening = copper.

Duane Benson

Run it up the flag pole and see who solders

http://blog.screamingcircuits.com

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API’s Changing of the Guard

API Technologies named a new president and CEO today, and, like his predecessor Robert Taveres comes from the component side.

That makes sense because API derives much of its revenue — and profit — from making RF/microwave components. The firm has made headlines of late, however, because its lead shareholder is also the largest owner of IEC Electronics, an API competitor on the EMS side. And that shareholder, the equity group known as Vintage Capital, has been engaged in what turned out to be a victorious proxy battle for the leadership mantle of IEC.

With a new board in place at IEC, and an EMS veteran in charge, will this mean a sale of API’s EMS business to IEC is in the offing?

 

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Component Footprint Rotation, Part II

I’ve noticed that a lot of CAD library footprints for two-pin polarized parts have pin one pointed up as zero degree rotation. According to IPC, pin 1 pointed to the left is zero degree rotation.

Why is this such a common error? I can’t be certain, but I have a pretty good idea.

Surface mount parts, as everyone knows, generally come in reels of tape. It stands to reason, that the parts would be placed into the tape at a standard zero-degree rotation. They generally do. Before putting a perplexed look on your face, take a look at the image below.

20150220_143916
When looking at the tape, it’s a pretty natural thing to pull it out and hold it horizontally – with pin 1 up – perpendicular to our angle of vision. Makes sense. It’s not a stretch to look at this strip of tape and end up assuming that pin one is up at zero rotation.

However – the machines are the ones being spoken to. Not humans. The machines get the parts in line with their line of vision. That puts pin one on the left.

20150220_143650
Makes more sense when you look at it this way. Running into the machine, pin one, at zero rotation, is on your left.

For more to the part rotation story, tune your browser dial to here. Or just scroll down a little bit. It’s right below.

Duane Benson
The long and winding reel leads to your PC board. Not your door.

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Component Footprint Rotation

Before we (or any old assembly house) go about putting surface mount parts on a board, we need to program our assembly robots. I’m oversimplifying, but essentially, the machine program needs to know the X / Y coordinates, relative to the board origin (which is the lower left-hand corner), the part rotation, and the side of the board.

In years past, we needed a centroid file (AKA pick-and-place file) containing all of that information. In some cases, we still need the centroid, but not always. Today, we can get the same information from ASCII CAD files, ODB++ CAD files or Eagle .brd files. You only need a centroid if you send us your board files in Gerber format.

If you do send us a centroid file, you no longer need to worry about rotation. The IPC has defined the zero degree orientation, as well as proper rotation direction, but too many part footprints set the zero degree at different angles. We can’t rely on the data.

While we have to ignore rotation and figure it out with other means, we still do strongly recommend that you follow IPC standards when you make your own footprints. The illustrations below show how footprints are supposed to be oriented.

Duane Benson
There’s no earthly way of knowing
which direction we are going
There’s no knowing where we’re rowing

Package origins

Passives orientation r2

Chip rotation

Quad and BGA

Three-pin parts

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