New Technologies at the TPCA Show

The mood at the TPCA Show in Taipei last week was relatively somber with light activity on the show floor even as the technical conference had a strong showing. It was a bit of a shock (but not totally unexpected due to the recent sale of the business) to see the total lack of presentation in the large Hitachi Via Mechanics booth.  Some said that the Christmas “slowdown” could be a month early (November) this year. Yet, board suppliers to “Western brokers” were pushing for higher prices.

A major increase in the use of automation (load and unload systems) was noted on equipment previously shown as manually fed systems throughout the show indicated a trend to reduce labor costs and increase manufacturing consistency and yields.
Laminate producers bemoaned the lack of business as they discussed the introduction of new “low loss” materials. Many companies (power supply makers, board builders, specialty chemical providers, bare board fabrication and SMTA equipment reps and providers) stated that this year’s business would wind up down 20% to 30% (or more) than 2012 – in itself a difficult year.

AVI and direct imaging appeared to attract the most attention during the show. Japan’s Inspec and Hioki demonstrated their newest systems to invited prospects in a private demonstration rooms in the TKK booth. Orbotech gathered the largest crowds when its minion of robots performed synchronized dances to the delighted crowds of young engineers and touring students.

Dr. Hayao Nakahara (below) of N. T. Information Ltd. presented “World Economy and its Influence on the Taiwan PCB Industry” to Taiwan’s interconnect Industry’s leaders at the TPCA’s Directors’ breakfast meeting on October 24.

PWB companies that ventured into PV solar manufacturing a few years ago stated that they are cutting their losses in this field and focusing on future interconnect related growth. They stated that only the “giants” in this industry had a chance to profit now or in the future. We queried a number of industry leaders on what their opinions of production three years out for their companies would be like.

The major Taiwan-based substrate makers have developed coreless IC substrates for use in thin profiled mobile devices. Nanya introduced its 5+1B FC BGA at the show. Unimicron’s chairman stated that his firm was already working on a 10um process for organic substrates and had also developed a coreless technology for making very thin IC substrates. NanYa’s VP of substrate manufacturing sees the future for substrates for his operation in SIPs and advanced HDI areas. Unitech’s Vice Chairman looks to focusing on rigid-flex and advanced HDI. He stated that his company will expand capacity for 50 micron circuitry in 2014. Unitech’s rigid-flex board revenues could increase to 20% of the company’s revenues in 2014 from 15% this year. All stated the importance of handheld and automotive applications.

MacDermid, promoting its automated system for plating and via-fill, sees good growth this year with Taiwan and China-based companies.

The quality of China designed and reverse engineered versions of process equipment continued to improve. This will further threaten the survival of Western (and Japanese) equipment makers.

A major American-based flex and rigi-flex fabricator attending TPCA-Impact bemoaned how difficult it is to gather complete and accurate business and process metrics on major Korean, Taiwanese, and Chinese competitors  for his benchmarking efforts.

The joint SMTAI-IPC event in Ft. Worth went well. It was busier than expected, with registration up 40% (to 1,300) over from 2012. Much of the increase can be attributed to the colocation of the event with the IPC’s fall standards development committee meetings. The Evolving Technologies Summit was well received with excellent reviews. CGI reported great enthusiasm for the roll-out of its new optical inspection device. There were some minor issues on meeting rooms due to the “last minute arrangements” and the late finalization of the agreement to cooperate.  However, there is great optimism that next year’s joing activity will improve as both groups will work together in planning stages.

It’s good news if this repeats. China’s growth accelerated in the third quarter, putting to rest for now fears that the world’s No. 2 economy was headed for a sharp slowdown that would rattle world markets according to the WSJ. China’s GNP grew 7.8% from a year earlier, according to data from the National Bureau of Statistics, up from growth of 7.7% in the first quarter and 7.5% in the second.

Watch for a resurgence of PV Solar and electric powered vehicle activity in China as the government is offering extra funding of more than $800 million to reduce pollution by year-end. Hebei has already removed 411 small co-fired boilers and kilns. Beijing will reduce air particle density by 25+% in the next five years by reducing the city’s annual coal consumption to 10 million tons. It plans to close four remaining gas fired plants in the city before 2015.

We believe that this one will be different! We have watched historic pioneers, innovators, and industry stalwarts vanish, decline or merge into obsolescence over the past decade as the profile of the electronics industry and its supply chain went through radical changes and shifts. We have stated that it will take deep pockets, close ties to OEMs, IC companies, and major EMS firms to grow in the future. Small companies with great ideas and products do not normally have the assets to bring their wares to commercial success on their own. They often are not able to directly reach the decision makers in their particular buying publics or influence the decision makers of their prospects’ customers. Mergers often do not have a common expectation prior to their joining together. Where are Shipley, Dynachem, LeaRonel, Sel-Rex, Mica, Fortin, et al today?

We believe that this one will be different! It brings together a specialty chemical company that has continued its focus and profitable operations in difficult times through recession and industry consolidations as well as major technical and geographic market shifts with the former CEO of a corporation that has grown nearly 40 times during the past decade to $8 billion.

We believe that this one will be different! The acquisition of MacDermid by Platform Acquisition Holdings Limited (to be renamed Platform Specialty Products Corporation [PSP]) does several things. It increases MacDermid’s resources. It brings to MacDermid the added financial strength of the investors of PSP. It brings to PSP a seasoned successful specialty chemical executive along with his management team in the person of Dan Leever, MacDermid’s chairman, who will become PSP’s CEO. The move further broadens Platform’s base and positions it to leverage itself into a major global specialty chemical corporation.

No relief in sight. Suppliers of equipment and processing materials in Greater China continue to report low business levels. The  expected annual broad year-end build-up for the Xmas season did not materialize. Equipment and other “unnecessary” purchases now seem to be on hold until after the Chinese New Year, even though there seems to be some recent improvement in China’s economy and export levels.

Taiwan’s decline in notebook production has put a damper on that industry’s participants. As a result, PCB fabricator plant utilization has fallen to less than 70%. This has put a major damper on sales of PCB fabrication and assembly equipment in the region. It will be interesting to see what Taiwan’s circuit makers , with a large footprint in Mainland China, have to say at the TPCA in Taipei later this month.

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Chime Ball Technology (CBT) and Maskless Lithography Inc. (MLI) unveiled their two new joint product offerings at the TPCA Show. First was the fully automated load/unload CBT-MLI 5800 product which addresses 45 microns and above inner- and outerlayer digital imaging. Second was the 30 microns version that incorporates all of the features of the CBT-MLI 5000 series product, with the ability to image lines and spaces down to the 30 microns level. The CBT/MLI system used LEDs as its UV source.

Aiscent Technologies promoted its two-sided LDI system (now installed at Triangle labs in Nevada. Aiscent also showed a photo of its new reel-to-reel system for flexible circuit imaging. The company claimed the capability of processing 10um lines and spaces on a new system – not yet installed anywhere.

Rainbow showed a video of its two-sided wet processing system for liquid photo resists. The first production system is expected to be installed by WKK, Rainbow’s distributor, in China in the Spring of 2014.

MacDermid featured its complete 2-meter per minute desmear and viafill line for HDI. Mike Wood, Business Manager in Taiwan, said that the company expects to sell 10 systems priced at under $3 million each to Taiwan-based companies during the coming year. He stated that there are already 30 lines running with many of these in Korea. Wood presented a paper at IMPACT during the show.
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Printed circuit bookings dropped even in Germany in August! They came in 1.5% less than August 2012 according to ZVEI.

China’s exports unexpectedly shrank in September, in a sign of weakening global demand for its products and a potential headwind for the world’s No. 2 economy. Exports fell 0.3% in September compared with the year-ago period, sharply down from August’s 7.2% growth and far below economists’ median forecast of a 5.5% expansion (source WSJ). However, its GNP ticked upwards the first half of October providing hope for stability and future growth. In electronics we suspect moderate stability will be followed by a strong uptick after the Chinese New Year.

The European Central Bank will create swap lines with China’s central  bank of up to $60 billion due to China’s growing importance in Europe’s trade and financial transactions.

Kyocera has completed the acquisition of Toppan NEC Circuit Solutions, one of Japan’s major manufacturers of the printed circuits and semiconductor substrates.

FujiFilm and Imec (of Belgium) have co-developed a new photoresist technology for organic semiconductors that enables the creation of submicron patterns.

IDTechEx  will host Printed Electronics USA 2013 and Graphene Live 2013 on November 20 and 21 in Santa Clara, California.

China’s smartphone market will exceed 450 million devices in 2014, up 25% from 2013,  according to IDC. China Mobile is expected to carry iPhones by then. Current market leaders in China are Samsung (18.5%), Lenovo (9.8%), and China Wireless Technologies (Coolpad). Other lower cost Chinese brands are also gaining ground (e.g., OPPO).

Applied Materials and Tokyo Electron will merge under a holding company headquartered Holland. The new entity will have a market capitalization of $29 billion!

GE Healthcare Finland Oy, in partnership with GE Idea Works, announced today that it has completed the acquisition of Imbera Electronics Oy, a pioneering Finnish company that has spent over 10 years developing advanced embedded electronics packaging technology and manufacturing solutions. Financial terms of the transaction were not disclosed. Embedded electronic packaging technologies can reduce the size and cost of components used in digital electronics by over 50%, enabling much higher integration for increasingly feature-rich consumer products such as smartphones and tablets. This embedded packaging is also used in advanced avionics, power distribution and a variety of other applications.

 

About Gene

Gene Weiner has spent his entire career -- spanning more than 50 years -- in the printed circuit industry. He spent the early part of his career in chemical engineering at MIT Lincoln Laboratories, then became employee no. 4 at Shipley, and later vice president of sales and marketing at Dynachem and president of New England Laminates. He has been a consultant to leading materials, circuit board and semiconductor companies for several years, and sits on the board of Wong’s Kong King International and the MBA advisory board of the Malcolm Baldridge School of Business at Post University. He was inducted to the IPC Hall of Fame in 2006.
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One Response to New Technologies at the TPCA Show

  1. Denny McGuirk says:

    A minor correction – AMAT and TEL will incorporate in The Netherlands with dual headquarters in Tokyo and Santa Clara.

    TOKYO and SANTA CLARA, Calif., Sept. 24, 2013 /PRNewswire/ — Applied Materials, Inc. (NASDAQ: AMAT) and Tokyo Electron Limited (TSE: 8035) today announced a definitive agreement to create a global innovator in semiconductor and display manufacturing technology via an all-stock combination which values the new combined company at approximately $29 billion (¥2.8 trillion). This combination, which has been unanimously approved by the Boards of Directors of both companies, brings together complementary leading technologies and products to create an expanded set of capabilities in precision materials engineering and patterning that are strategically important for customers. The closing of the transaction is subject to customary conditions, including approval by Applied Materials’ and Tokyo Electron’s shareholders and review by regulators. The companies expect the transaction to close in mid to second half of 2014.

    Tetsuro Higashi, Chairman, President and CEO of Tokyo Electron, said, “Today, we are launching a new company and taking a bold step forward for our industry. Built on a foundation of people, technology and commitment, we are creating a truly global company that we believe will expand the value we deliver to our customers and be able to achieve new levels of financial performance.”

    Gary Dickerson, President and CEO of Applied Materials, said, “We are creating a global innovator in precision materials engineering and patterning that provides our new company with significant opportunities to solve our customers’ high-value problems better, faster and at lower cost. We believe the combination will accelerate our momentum for profitable growth, increase the value we deliver to shareholders and create great opportunities for our employees.”

    The combined organization is intended to accelerate the existing strategic visions of Applied Materials and Tokyo Electron and increase the new company’s opportunity to enable major, future technology inflections and advance customers’ roadmaps in both semiconductor and display. Extraordinary advances in semiconductor and display technology have made it possible to mass produce affordable personal electronics, putting PCs, smartphones, tablets and other amazing devices in the hands of consumers around the world.

    Today, the mobility trend is driving a new phase of industry growth and introducing dramatic and fundamental technology changes in the way devices are made. Materials innovation is the most significant lever for customers to drive cost-effective performance gains in mobile chips and displays. With the best and broadest capability in materials engineering, Applied Materials and Tokyo Electron believe this new company will be well-positioned to provide valuable, differentiated device performance and yield solutions that enable the new device architectures and cost-effective scaling that customers need to win.

    Said Higashi and Dickerson jointly, “We are building this new company in the spirit of a merger of equals. For five decades, we have each made significant contributions to the semiconductor industry and we have deep respect for the capabilities that the other brings to this combination. Both companies have a strong heritage of customer service and an enduring commitment to push the boundaries of technology and engineering. We share many common values and are confident we will execute together to achieve our strategic and financial goals.”

    As a clear signal of the commitment to create a new global enterprise, the company will have a new name, dual headquarters in Tokyo and Santa Clara, a dual listing on the Tokyo Stock Exchange and the NASDAQ, and will be incorporated in The Netherlands.

    The new company will have a shared leadership team. Tetsuro Higashi will serve as Chairman, and Gary Dickerson will serve as Chief Executive Officer. The board will be made up of eleven directors with five directors appointed by each company and one additional director to be mutually agreed upon. Seven of the eleven directors will be independent. Bob Halliday of Applied Materials will serve as Chief Financial Officer.

    Under the terms of the agreement, Tokyo Electron shareholders will receive 3.25 shares of the new company for every Tokyo Electron share held. Applied Materials shareholders will receive 1 share of the new company for every Applied Materials share held. After the close, Applied Materials shareholders will own approximately 68% of the new company and Tokyo Electron shareholders approximately 32%.

    The companies expect to achieve $250 million in annualized run-rate operating synergies by the end of the first full fiscal year and $500 million in run-rate operating synergies realized in the third full fiscal year. In addition, the new company expects to realize meaningful savings as a result of the new corporate structure. The new company intends to commence a $3.0 billion stock repurchase program targeted to be executed within 12 months following the close of the transaction. On a non-GAAP basis, taking into account the buyback, the transaction is expected to be EPS accretive at the end of the first full fiscal year after transaction close.

    Goldman, Sachs & Co. acted as Applied Materials’ exclusive financial advisor, and Weil, Gotshal & Manges LLP, Mori, Hamada & Matsumoto, and De Brauw Blackstone Westbroek acted as legal counsel to Applied Materials. Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. acted as Tokyo Electron’s exclusive financial advisor, and Jones Day, and Nishimura & Asahi acted as legal counsel to Tokyo Electron.

    More information on the announcement can be found at http://www.newglobalinnovator.com.