What happens when the “world’s workshop” runs out of workers?

Ask someone in our industry, or any industry, for a short slogan describing the Chinese manufacturing juggernaut and you might hear phrases like immense capacity, unfair monetary practices, government-supported, environmental concerns, unfair trade practices, or a host of other admittedly pro-Western sentiments. But I never thought I would live to hear the term labor shortage used about China.

How could a land of well over one billion people lack the workers to fill positions in its manufacturing sector? Because it appears that is exactly what is happening.

I just returned from Taiwan and China and was surprised to hear from every customer, vendor and supplier that the local labor shortage is putting pressure on almost every sector of the Chinese manufacturing landscape. At the beginning of my trip, I had a single purpose for each firm that I visited. But after hearing about this issue during my first stop, I made a point of focusing on it with each successive visit to areas in Hong Kong (or more specifically, Guangdong Province), Suzhou, Shanghai and other locales.

For the past decade or so, business conditions in China have closely resembled those of mid 18th century America. Most US businesses at that time were located along the coastal regions of the Northeast. Close proximity to waterways helped early American businesses quickly move products from factories to a wide range of customer locations. It took many years for sufficient infrastructure to develop so that business could move into the interior states and still have economically feasible ways of getting newly created product to market. As business moved inward, population shifts began to occur as people followed jobs and commerce westward.

In China, commercial development was also a coastal phenomenon, beginning on a large scale in the areas between Hong Kong/Kowloon and continuing up the coast to Shanghai.

A major difference, however, between the early US and Chinese models is where the labor force originated. In China, prior to the great move toward capitalism, most people lived in rural areas. (Hong Kong, before it was turned over to China by the British, is the exception.) But then many Chinese people left their farms and home provinces and moved to urban areas in search of better jobs and a better life. The Chinese businesses in the coastal cities had a plentiful and ever-growing labor supply. 

But whereas in the US, part of the labor force located on the coast moved inland with businesses and then established permanent communities there that spanned generations, many urban Chinese still considered their traditional rural provinces “home.” And now that manufacturing is exploding across China, thousands of companies are setting up shop inland, where the infrastructure is in place to permit efficient movement of product, and province-to-province mobility – once restricted by law – is being eased.

With the home provinces now offering a plethora of employment opportunities, a great exodus of people who moved to the coast searching employment are now looking homeward for a similar position closer to family and friends.

As with all good ideas, once the word gets out, many people will try the same thing. The difference is that in China, the effect is multiplied a thousand-fold.

I have been told the exodus began first in the Greater Shanghai region, then moved down the coast to Hong Kong. The Chinese New Year gave many people a perfect opportunity to make the move as part of the holiday’s custom of returning to one’s birthplace. Thus, a labor shortage that no one would have predicted just a few years ago has suddenly taken hold.

I heard about this problem from those involved in the PCB industry, but could easily envision this phenomenon spreading to other industries as well. The customers and vendors I queried estimated that between 800,000 and 1.3 million people have abruptly left their jobs and moved from the coastal areas. This has created a huge vacuum in some businesses in the affected areas. Trained workers are now in short supply, and the hiring pool has shrunk to a level not seen before.

One might think that replacing workers in China would be easy. Not so. One of my customers ran a job ad for workers for a month and received only one response.
This applicant was quickly hired, but left soon after as another, slightly better position opened up. All the people I spoke with expect the labor issue to ease at some point, but because of the enormity of the issue, none would estimate when things would get better. In other words, no quick fixes are on the horizon. Workers will need to be hired, trained and paid well enough to prevent them from moving to competing employers.

One reaction to this problem has been to send a lot of PCB manufacturing back to Taiwan. This influx of work has created a logjam in Taiwanese board houses and is creating a laminate shortage as everyone scrambles for material to manage the increased load. This is not a sustainable solution.

I didn’t think much could surprise me in this industry, but a labor shortage in China did come as a shock. Given the current dismal employment picture in the US, we may well wish we had China’s problem. But a labor shortage there is likely to affect a wide range of Western industries dependent on Asian manufacturing capabilities, just when our own much anticipated recovery is underway. It’s a trend worth watching.

Tom Coghlan is operations director at Bare Board Group Inc. (bareboard.com); tom@bareboard.com.

iNEMI’s new leader is charging far and wide to further the consortium’s green plans.

It’s been a whirlwind debut for Bill Bader. Named last fall as the second chief executive in the 15-year history of iNEMI (inemi.org), he came from Intel with an impressive background in packaging, assembly and experience overseeing hundreds of employees. Since then, he’s traveled the globe, meeting with members and project leaders and absorbing the 70-member consortium’s somewhat divergent views on the industry. He spoke with CIRCUITS ASSEMBLY’s Mike Buetow in a pair of interviews in April and May.

CA: How have you been spending your time of late?
BB: At the end of 2009, 75 to 80% was programming, and 20% member updates. In November we held an environmental meeting in Europe and were invited to present at a ChemSec meeting on RoHS in Brussels. [Ed.: The International Chemical Secretariat, or ChemSec, is a nonprofit organization whose goal is a toxic-free environment.] Sixty-two people attended, about 10 from non-government organizations. It covered halogens, materials, eco-design, sustainability and recycling.

CA: In your opinion, how up to speed are the NGOs on the impact of large-scale materials transitions?
BB: Several, including ChemSec are on top of the materials, very well informed. Some of the others know what’s going on, but the methodologies are sometimes questionable.

CA: What was iNEMI’s role at that conference?
BB: The game plan was to inform the community about the technical issues when you rapidly transition materials content for PCBs, cables, connectors and what we are doing on that.

Likewise, we participated in a packaging workshop in Japan. Fifty people attended. This was to stimulate discussion on key technical issues in the packaging field. Japanese companies classically like to do their own R&D. They did agree, however, to collaborate on warpage issues. There is some real work to be done on this, including developing appropriate standards and specifications.

CA: Is this an area where iNEMI would actually write its own standard?
BB: By definition of our bylaws, we are not allowed to write standards. 

CA: What are some of the other key programs right now?
BB: We have task forces on alternative energies and medical electronics. Both have serious needs for standards to drive technologies and cost efficiencies. This fits our competencies. What iNEMI does well is the engineering work required to define best approaches and methods, and subsequent standards and specs.

CA: You’ve been on the job about nine months. What do you think so far?
BB: I like it. [Smiles.] The people you interact with are great. So are the opportunities to make a difference. We have great things started in packaging and miniaturization. For example, we’re working on four new initiatives to address gaps in organic substrate technologies: warpage factors, warpage qualification and modeling, wiring density and holistic modeling. For the last one, we want to develop a design tool to optimize package design in terms of electrical, mechanical and thermal performance. We are working to engage globally in key research priorities with technical organizations like the Fraunhofer Institute in Germany and Peking University in China. We established leadership committees to help us identify the next focus areas of interest and need. When we get all these efforts running smoothly and efficiently, we will really grow our value for our members. All of these efforts are making excellent progress.

CA: What are the problems you did not foresee?
BB: When critical leaders of projects get pulled away. We have to keep the communication lines open.

CA: How does iNEMI set its goals and priorities?
BB: We put together a Leadership Steering Committee made up of some of the highest level companies in the environmental area that could identify the priorities and identify methodologies to affect the speed of execution of those priorities. That team was put into place shortly thereafter. We held some meetings in April to set out priorities and objectives for the future, including where we are going to engage. On that committee, there are eight member companies: six OEMs, one academic institution and one supplier that’s an environmental leader in its industry. OEMs tend to lead in this area, and suppliers tend to take their lead. That’s one example of how goals are set. There is also strong interaction with our board.

CA: Characterize iNEMI’s priorities in the environmental arena.
BB: One key focus area is halogen-free. [iNEMI defines halogen-free as less than 1000 ppm]. We are doing all the necessary engineering work to qualify mechanically and electrically acceptable alternatives to halogenated circuit boards that have the necessary mechanical characteristics from a mechanical standpoint – rigidity, flexibility, solderability – and, electrically, meet the signal buss speeds of the future as necessary to support high-end computer products. We call this our HFR-Free PCB Materials Project. The objective is to get alternative materials qualified and ready to design into new projects by late 2011. There just are not drop-in replacements for high-speed, high-performance products. There’s a lot of engineering work to be done. What we are looking at from our HFR-Free team are eight to 10 alternatives for PCBs. To do the design of experiments, test sample sizes on eight to 10 different materials on a worst-case (most demanding) design situation; that amount of work is very significant. What an OEM gets as an advantage is its research load is probably 1/20th of what would be involved by itself. It’s a shared workload opportunity. The other reason there’s good collaboration environmentally is many of our key OEM members are looking for a level playing field. If in fact all companies are required to deliver halogen-free PCBs with truly better engineering, they are fine with that. That’s not where [OEMs] see their marketing advantage.  If we can affect how legislation such as RoHS happens as a function of having an industry-wide backed position, that’s great.

Another focus area is Product Carbon Footprint. We published a position statement on this on March 1, to articulate the membership position on how product carbon footprint methodologies and capabilities should be pursued from an industry standpoint. There is a tremendous opportunity for industry to affect the carbon footprint in the world.

With that release, we are supporting two projects to get the effective tools and methodologies in place. An internal development is the Eco-Impact Evaluator, which is a method for developing an information database using a building block approach. It’s creating a library and database of info where any designer of an ICT product could take information out of the database and define what their project will look like. The database will have a list of environmentally friendly materials. It’s being led by Cisco and Alcatel-Lucent.

A second project we support, one being led by MIT, is a lifecycle analysis toolset. This is for laptops initially, but will expand to other computers. It is similar to the Eco-Impact Evaluator, but much more specific in the short term. So for carbon footprint, we’re working on defining how it should be measured and used and developing tools to support it.

Another project in place is the PVC-free material alternatives for power cords for computers. We’re doing the engineering and evaluation work for a number of material options for resin and plasticized compounds that meet UL 94V0.

CA: How are you presenting all this to the outside world?
BB: We’re taking a number of approaches. We hold workshops for engaging people outside iNEMI, such as NGOs or legislative groups. We have a workshop scheduled in July at Purdue University centered around defining environmental priorities and projects that would be worked on by a university research center, which Purdue has defined in a grant. There are global aspects to that too; others that are interested are Catholic University in Belgium and several universities in the Far East.

There’s PINFA (the Phosphorus, Inorganic and Nitrogen Flame Retardants Association), a consortium of chemical suppliers doing cooperative research on alternatives for flame retardants. We’ve created an in-kind membership.

The next one may or may not happen. I’m going to Europe in June for a workshop meeting, and have made a request to meet with Greenpeace in an open, transparent mode to share what we are doing. And I haven’t decided what title to put on this, but it’s a working session by invitation only for industry stakeholders, including customers, legislators, and NGOs to critique best methods for effective environmental improvement. We will invite industry leaders from parallel industries as well.

Those are things we have done and are in process. We are committed to doing an environmental update newsletter on a quarterly basis to foster transparency and open the communication channel.

CA: What do you do about the maelstrom of paperwork?
BB: We are trying to stay on top of it. It is very, very challenging. One way is through an in-kind agreement with a database company called Compliance and Risks. Based in Ireland, they created a search system based on a real-time, up-to-date database that stays on top of all the regulatory actions in the world. They are funded by an impressive set of member companies. They put in their database all the information from the reports that occur in the EU, China or the US, new laws that come out from the state of California, etc., so you have in one place a searchable database of all info that is published in the world at large. We are a data partner, so we provide them with information and have access to the full database.

The second way is through the regular review of the projects we are running, where we ask, What’s new in the world, and are we working on the things we need to do, or are they changing? It never stops and the lights never go out.

Using laser alignment and novel placement force control, accuracy of 50 µm at 4-Sigma is achievable.

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After 20 “static” years, more realistic measures are needed.

In the late 1970s, with the advent of large-scale integration (LSI), ESD started to become a problem. Electronics manufacturing companies soon started to implement ESD control programs. At first, there was little information sharing and no ESD control standardization. Early standards focused on ESD risks from people and on ESD protective packaging. Standards for ESD control items, such as wrist straps, work surfaces and flooring followed as improvements to ESD control materials and equipment were made. In 1999, the ANSI/ESD S20.20-1999 standard for ESD process control was published. A third-party certification program was established to demonstrate compliance with the standard. Eight years later, updated versions of the ANSI/ESD S20.20-2007 and IEC 61340-5-1:2007 standards were published. Facilities compliant with these standards expect to be able to handle devices down to 100V for the Human Body Model (HBM) without significant problems. In this context, adding ESD protection to bring device ESD withstand to 2kV HBM seems to be a case of over-engineering.

In the early days, devices had relatively small numbers of pins and were assembled largely using manual processes in relatively uncontrolled ESD environments. The likelihood of large amplitude HBM ESD events occurring to pins was relatively high. Over time, the number of device pins has increased dramatically, as has the level of manufacturing automation. Many devices can only be assembled in automated manufacturing systems, and ESD control has greatly improved. The likelihood of large amplitude HBM ESD has significantly reduced in these manufacturing processes. However, the number of protection networks required, and chip area they occupy, has grown along with pin count. Device ESD susceptibility test time and difficulty has increased correspondingly. When devices fail to meet the targets, the price of redesign can mean months of delay to product introduction. The ESD targets are particularly difficult to meet on high performance (e.g., low leakage or high-speed) pins. ESD protection networks add capacitance and leakage paths. At 45 nm and 32 nm technology, 18 Gb/s cannot be met with 2kV ESD protection, but can be with 1kV or less.

The potential benefits of reduced ESD target levels are clear. These include savings in design time and effort, faster release of production devices, accelerated and easier improvements in device performance and reduced chip area occupied by ESD protection networks.

Since the mid 1980s, it has been industry practice to supply ICs with ESD protection, where possible, to meet 2kV HBM ESD. While IC suppliers make every effort to meet these established ESD target levels, customers tend to expect these same levels without exception for product qualification. There is really no concern from either side, as long as these de facto levels are met. However, many quality and product engineers observe, with increasing frequency, that the advanced IC products have been encountering product qualification delays at every advanced technology node. At the same time, numerous products have been shipped with ESD protection on some pins at lower levels (after agreement with customers) to achieve desired performance. Despite this, field return rates have not been observed to be different from the products shipped at, or exceeding, the normal target ESD levels. These observations clearly indicate the target ESD levels must be considerably higher than necessary. Even more important, it leads to the conclusion that these levels could be universally reduced with no outside impact, while allowing the design freedom necessary to meet the technology advances.

Consolidated studies. To investigate and establish the true nature of these initial observations, a consortium of ESD experts known as the Industry Council on ESD Target Levels was launched in 2006. This council mainly consists of IC suppliers, consultants, contract manufacturers, and OEMs. It conducted massive studies on the existing ESD control methods and their relation to field return rates of IC products shipped at different ESD levels. The main conclusion was that with the basic mandatory ESD control methods practiced at every production area, products shipped at 500V HBM design levels are just as safe as products shipped at 2kV HBM levels. This is a clear confirmation that the current 2kV HBM target is an over-specification and that reducing this to 1kV should not have any impact on the customer qualification requirements.

With the introduction of recommendations on more practical, but still safe ESD protection target levels, some customers naturally show concern that there could be hidden impact on the reliability of the whole system itself. That is, while product yields may be unaffected, systems using these components might start showing unexpected failures in operation due to reduced ESD immunity. First, this concern arises from a misconception that the HBM component ESD test method represents the stresses that happen in a system environment where ESD transients are actually remarkably different in nature. Second, the data gathered by the Industry Council did not show any evidence of increased return rates from customer applications at 500V compared to 2kV HBM rated parts. The second fact naturally follows from the arguments from the first. The third, and most important, point is that electronics systems in operation require special protection strategy independent of the component-level ESD protection. Component-level protection is driven solely by the need to prevent damage during handling in the production area. So, component-level protection changes should not warrant a concern for system-level protection, provided the proper system protection is designed and followed. These same arguments also apply for Electrical Overstress (EOS) failures, which are independent of component-level ESD protection. All of these observations have been fully documented in a white paper published by the Industry Council.¹

Epilogue: Since publication of the recommended HBM target levels, the Industry Council also has conducted detailed studies of charged device model (CDM levels). As a complement to HBM, CDM represents metal to metal discharge from the package leads and is an important ESD specification. For CDM, the industry de facto standard has been 500V. However, rapid advances in silicon technologies, high-speed circuit designs and IC package advances are making it virtually impossible to meet this level for many of the large pin devices with high-speed serial link designs at the 45 and 32 nm nodes. Similar to HBM for human handling, production area CDM controls to prevent metal to metal discharges have progressed far enough to safely recommend lowering this target to 250V.² Both HBM and CDM requirements have been documented as JEDEC white papers.

The time has come for ESD target levels to be changed for the sake of the industry. IC suppliers should always guarantee the recommended minimum ESD levels are achieved. Electronics system manufacturers should diligently follow ESD control methods, according to standards such as IEC 61340-5-1 and ANSI/ESD S20.20, to prevent ESD damage during component handling and assembly in production areas. A general appeal is made to IC customers to keep component ESD protection level requirements at a realistic perspective and adopt the recommended new ESD target levels.

The Industry Council intends to publish a new white paper on effective system-level protection. This is an important subject, but should not be tied to component ESD levels.

Without these common goals, IC technology will continue to run into roadblocks during ESD qualification. With a common approach and better communication, a balanced ESD strategy can be achieved. The most important initial step is to remove the barriers by recognizing that new ESD level changes are urgently needed.

References
1. JEP155, Recommended Target Levels for HBM/MM Qualification, esdtargets.blogspot.com.
2. JEP157, A Case for Lowering Component Level CDM ESD Specifications and Requirements, esdtargets.blogspot.com.

Dr. Charvaka Duvvury of Texas Instruments (ti.com) and Dr. Harald Gossner of Infineon Technologies (infineon.com) are co-chairs of the ESD Industry Council (esdtargets.blogspot.com); c-duvvury@ti.com. Dr. Jeremy Smallwood is a consultant at Electrostatic Solutions Ltd. (static-sol.com).