Circuits Assembly Online Magazine - Features

ANAHEIM, CA, Oct. 8, 2004 -- DDi Corp. will lay off up to 175 employees at its Milpitas, CA, manufacturing facility and take cash charges of $1 million as it attempts to lower its costs. The losses will be partially offset by the expected addition of a small number of employees across DDi's other facilities, bringing the total staff reduction to approximately 7% of DDi's worldwide workforce.

Some orders will be moved to DDi facilities in Toronto and Virginia, taking advantage of those plants' lower production costs, said Bruce McMaster, DDi's CEO.

Following the restructuring, the company will continue to employ more than 1,800 people. As a result of the workforce reduction, DDi expects a cash restructuring charge of approximately $1 million to be incurred in the fourth quarter of 2004 and to realize annualized cost savings of between $6 and $7 million.

KNOXVILLE, TN, Oct. 18 - SMTC Corp. will supply electronics manufacturing services and logistics services to Radio Systems Corp. under a new long-term agreement, the companies jointly said today.

Terms of the deal were not announced.

SMTC will supply engineering, printed circuit board and final product assembly services starting in the current quarter with volumes ramping in 2005.

CLINTON, NY, Oct. 18 -- Bobet Corp. will service and sell Indium Corp. of America's complete line of assembly products as part of a new supply deal, the companies said today.

Bobet, which was founded in 1997, will handle the greater Arizona area, Indium said in a press release.

MILPITAS, CA, Oct. 18 -- Solectron Corp. has named Matti Virtanen senior vice president and president of Europe, the Middle East and Africa. He joined the company Oct. 4.

Virtanen will coordinate efforts to expand the company's business and ensure customer satisfaction. He reports to Marty Neese, executive vice president of worldwide sales and account management.

Virtanen has experience at Nokia, Hewlett-Packard and Compaq, where his responsibilities included developing and executing international go-to-market strategies, building senior-level customer relationships, running services and hardware businesses and developing brand strategies.

He has a master's in computer science, business management and HVAC from the Helsinki University of Technology.

Naples, FL - Megan Wendling, president of MW Associates, has combined with the MII and the SMTA to offer a series of Lead-Free Seminars throughout China in 2004 and 2005. Other companies involved with the seminar series include KIC, Kester, Kyzen, Aqueous Technologies, Creative Automation, Vitronics Soltec, MVP, Tyco and BP Microsystems.

The first seminar will be held Nov. 3 at the Asia Hotel in Beijing, China, and will focus on the lead-free process. Approximately 180 attendees have signed up for the seminar, which will be presented in Chinese.

The series will continue to Shanghai, Schenzen and then to Taiwan in the upcoming year.

MW Assoc. marketing agency is also the publisher of Lead-Free Magazine.com. For further details, contact Megan Wendling: (239) 403-0230 or megwend@aol.com.

SCOTTSDALE, AZ, Oct. 15 -- A pair of economists who track the electronics industry this week offered differing opinions on what's in store for the recovering sector.

The outlook for capital spending is "generally favorable" due to higher demand for replacement equipment and a need for greater efficiencies, said Dr. Larry Chimerine. Companies are sitting on extraordinary cash reserves and financing is available from outside sources, said Chimerine, who spent 14 years as manager of U.S. economic research and forecasting at IBM.

Speaking Tuesday at the TMRC meeting in Scottsdale, Chimerine said that although the environment remains nearly impenetrable to product price hikes, companies will need to invest in new equipment in order to compete. "If you can't raise prices, you must improve productivity 3 to 4% every year just to stay even" with higher energy costs, vendor price hikes and raises to employee wages, Chimerine said.

A somewhat different outlook was given by Ed Henderson of Henderson Ventures. Henderson, a longtime PCB industry analyst, forecast a slowdown in annual global GDP through 2006, and a corresponding drop in equipment sales.

Annual GDP growth worldwide will slow from 4% this yer to 3.5% in 2005 and 3.1% in 2006, Henderson predicted. Likewise, global sales of electronics equipment will drop from 13.4% this year to 9.1% in 2005 and 5.7% in 2006. The figures are based on actual exchange rates.

The bare PCB market, now in its second year of recovery, will also fall, Henderson said. After 7.4% and 13.8% growth in 2003 and 2004, respectively, global PCB sales will slip to 6.4% next year as prelude to a 2006 recession, when sales will be 0.8% lower than in 2005, he said.

While pointing out that oil use as a percent of U.S. GDP has declined steadily over the past 20 years, Henderson said peaking oil prices could precipitate a sharp downturn. "Although a global receission is not in the forecast, a sustained oil price in the $60 to $70 range could produce an economic downturn in 2005."

Trade Barriers

Chimerine singled out trade deficits as a major longterm hurdle for the U.S. economy. Noting trade barriers enacted by several Pacific Rim nations, most notably China, that effectively squeeze American-made products from Asian markets, Chimerine asserted that trade has become an economic growth issue.

"The outsourcing of production [is] the real drag" on the economy, he said. "The manufacturing base must be strong. Not all chips [ICs, potato] are the same."

U.S. trade deficits with China and overall have this year ballooned to all-time highs, with some forecasts predicting a $550 billion gap by year-end.

Pointing to the Bush Administration's current policy of not waging battles over suspected currency manipulation by China, Japan and Taiwan, Chimerine said, "We are insane in keeping this in place," he said.