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News

San Jose, July 13 -- As product stewardship -- taking responsibility for a product from cradle to grave -- makes its way into mainstream manufacturing, OEMs will be faced with greater oversight for ensuring obsolete electronics avoid the landfill.

To wit: A recent announcement by a major office equipment retail chain and a leading PC OEM to recycle old computers for free. Two weeks ago, Office Depot and H-P announced programs to takeback outdated machines at no charge to consumers. Currently, less than 10% of electronics are recycled, according to the Silicon Valley Toxics Coalition.

Vijay Wakharkar of Intel drove the point home during a special invite-only session on packaging trends during Semicon West. In a four-hour session at the Marriott Hotel cosponsored by SEMI's International Electronics Manufacturing Technology Symposium and Henkel Technologies, several experts spoke on coming challenges in packaging.

With package costs beginning to exceed even the semiconductor die, more attention will be paid to these critical interfaces between the brains -- the chip -- and the boards. Wakharkar called attention to particular "green" trends, saying, "I think customers will ask about chemicals in packages."

Wakharkar described several other trends, including the convergence of computing and communications. The result, he says, will be packages that are more complex, with higher I/O counts, and die stacking and pinning. For example, Intel is working on stacking six to eight dice in a single package. In turn, materials suppliers will have to come up with combinations that withstand or "smooth" the heat spread from chip to package.

Furthermore, gains will continue to come in tighter densities. By next year, he says, manufacturers can expect BGA pitches to decrease to 0.3 mm for CSPs, and 0.6 mm for what he calls "cost-performance" packages.

Further evidence of green's gains: lead-free solder bumps. According to Jan Vardaman of TechSearch International, "some increase in the next year or so" should be expected for lead-free bumps. Fujitsu, she notes, uses lead-free bumps in all products for internal use.

Vardaman also noted a shift in packages for memory devices. Such applications are shifting to FBGA and wafer-level packaging from TSOPs, she says. Her forecasts call for the number of 200-mm wafers shipped in WLPs to grow from 750,000 wafers this year to 2.1 million next year and 4 million in 2006.

Other presentations covered low k devices and copper interconnects, lead-free material sets and high speed dispensing. Speakers included Mike Steidel of Amkor Technology, Kishor Desai of LSI Logic, Dev Malladi of Sun Microsystems, Steve Adamson of Asymtek and Henkel's Gordon Fisher, Jim Huneke and Michael Todd.

"The goal was to educate attendees about the power of partnering with industry leaders and illustrate how these partnerships can yield solutions to some of the biggest challenges in semiconductor packaging," says Bhavesh Muni, business manager of semiconductor packaging materials at Henkel, in a press statement. Muni said the turnout -- 120 persons -- and positive returns would lead to another symposium at Semicon West next year.

For copies of the proceedings, call 626-968-6511.

Minneapolis, MN, July 29 -- Brian McAdams from Lehigh University (Lehigh.edu) in Bethlehem, PA, will receive the SMTA's 2004 Charles Hutchins Educational Grant (smta.org/hutchins) for his project, "Sub-critical Initiation of Delaminations at the Underfill/Passivation Interface in Flip Chip Assemblies."

McAdams is a materials science and engineering graduate student who has recently conducted studies of cure kinetics of developmental epoxy systems. He has examined the mechanics of adhesion for the initiation and propagation of cracks at the underfill/passivation interface in flip chip packaging and looked at the role of deformation mechanisms in determining interfacial adhesion and the potential correlation to chemical interactions across the interface.

McAdams hopes to work in electronics assembly and packaging and to continue efforts on materials characterization, failure analysis, or research and development of flip chip assemblies.

The award includes $5,000 and travel expenses to SMTA International, where McAdams will be presented the award during the SMTA Annual Meeting.

Co-sponsored by SMTA and Circuits Assembly, the grant was established in memory of past SMTA president and industry colleague Charles Hutchins. Circuits Assembly donated $5,000 to the fund in February through the proceeds of the Service Excellence Awards.

NORTHBROOK, IL, July 28 -- Orders for rigid boards lagged in June, while demand for flex circuits remained strong, according to the latest three-month moving average of North American manufacturers.

For all board types, shipments rose 31.3% and bookings were up 13% vs. a year ago, said IPC, which administers the monthly poll. The figures may include some sales of products built offshore and brokered by the surveyed companies.

For the first time, data for flex circuits and rigid boards were broken out. In a statement, IPC said, "Due to divergent growth trends in the rigid PCB and flexible circuit segments of the industry, IPC will report separate monthly statistics for the two segments." The move seems to acknowledge calls by the media, including the publishers of Circuits Assembly, for better explanation of the data.

The June book-to-bill was 0.95 for rigid and 1.57 for flex. "[R]igid and flex shipments are rebounding and showing strong growth, but flex is growing at a faster rate," IPC said.

The book-to-bill ratio for all board types dropped to 1.06, down 0.05 points.

The ratio is calculated by averaging the number of orders booked over the past three months and dividing by the average sales billed during the same period. A ratio of 1.06 means that for every $100 in shipments, $106 worth of PCBs were booked. An increasing ratio is generally considered a sign of a market poised to rise.

Shipments are up 35.4% year-to-date, bookings 43.1%. Combined June shipments were up 5% sequentially, while bookings fell 19%.

June rigid shipments were up 28.4% and bookings 16.3% over last year. Year-to-date, rigid shipments are up 26.7% and bookings are up 23.6%. Among those surveyed, rigid shipments rose 6.4% sequentially and bookings rose 14.2%.

June flex shipments were up 76.9% but bookings were down 14.9% vs. last year. Year-to-date, flex shipments are up 79.1% and bookings 147%. Sequentially, flex shipments fell 1.4% and bookings dropped 69.7%.

Flex sales, which include some value-added services, make up about 17% of total PCB sales in the IPC poll.

The data come from a sample of North American rigid and flexible PCB manufacturers.

IPC did not publish June shipment or booking indices.

TEMPE, AZ, July 28 -- Three-Five Systems today reported a second-quarter net loss of $6.7 million on sales of $37.6 million.

The loss worsened from the March quarter ($6.6 million) and a year ago $(4.9 million). CFO Jeffrey Buchanan blamed product pricing and mix issues at the EMS firm's Redmond, WA, facility and the integration of Integrex, another EMS company.

Gross margin was 5.4%, excluding writeoffs and the Redmond plant results. Overall the gross margin showed a loss of 0.5%.

For the quarter, operating cash outflow was $5.4 million and net capital expenditures were $5.1 million. At quarter's end TFS had $18.7 million in cash, vs. $26.5 million sequentially.

Sequentially, sales outstanding improved by three days, to 59 days. Inventory turns slowed to 5.4 from 5.7

TFS guided for third-quarter sales of $38 million and $41 million and a net loss of 24 to 26 cents. Q4 revenue of $48 million and $60 million is expected.

PALO ALTO, CA, July 28 -- Varian Inc. today reported record third-quarter sales of $236.7 million, up 13.4% over last year, on strength in all its primary sectors.

"We are pleased with the results, particularly in a third quarter, which is traditionally a challenging quarter for us," said Garry W. Rogerson, president and CEO, in a statement.

Pro-forma net earnings were $16.1 million, up from $12.3 million last year. GAAP net earnings were $15.4 million, vs. $10.7 million, when the company wrote down $1.6 million in restructuring and other one-time charges.

Last quarter Varian took $1.6 million in restructuring charges due to a previously announced consolidation of consumables factories in southern California.

EMS revenues were up 17.5%, to $52.7 million, on higher demand for medical and industrial equipment. The EMS pro-forma and GAAP operating profit margin was 12.2%.

Overall, the operating profit margin was 10.5% on a pro-forma basis and 8.9% on a GAAP basis.

Weymouth, UK -- DEK (www.dek.com) has developed a high throughput backside wafer coating process, hosted on a mass imaging platform and capable of exceeding the ± 12.5 µm total thickness variation (TTV) stipulated by most wafer processing specialists. The new process is compatible with underfill or adhesive-type coatings, normally applied at a nominal 50 µm thickness to the backside of semiconductor wafers ahead of singulation.

"TTV is the critical success factor for any backside wafer coating process," said Clive Ashmore of DEK's global applied process engineering group. "By demonstrating our ability to meet the established criteria for backside wafer processing, we have opened new opportunities for semiconductor packaging specialists to increase throughput and reduce the cost per package by using high accuracy mass imaging."

The new process is compatible with the company's metal stencil and emulsion screen technologies.

Binghamton, NY -- July 22 -- Universal Instruments Corp. today announced the resignation of its president, Ian McEvoy, who is leaving the industry to pursue other interests.

Ian deSouza, Universal senior vice president of operations and systems, was promoted to president, effective Aug. 16.

"I also look forward to the prospect of having very little to change. Our customers will notice no difference, except our continuing progress, growth and commitment," deSouza said in a press statement.

During the past three years, deSouza was responsibile for global supply chain, software development and manufacturing activities, including the company's new operations in China.

In a statement, Universal said DeSouza is considered the "right and natural choice" to take the company forward. For over three years he has been McEvoy's deputy.

"I welcome the opportunity to take the reins from an old friend who has distinguished himself well in the role," said deSouza.

McEvoy plans to return to the U.K., where his family resides. He is credited for pulling the company through the 2001-02 recession and returning it to profitability in 2003.

McEvoy and deSouza worked closely for the past 20 years, through prior stints at Domino Printing Science and Cambridge Instruments. They were colloquially known within Universal as the "two Ian's."

Toronto -- July 22 -- Celestica Inc. reported June quarter revenue rose 45% over last year, to $2.3 billion, in line with guidance. Sequentially, revenue grew 15%, though the company remained in the red.

The top tier EMS company showed a GAAP net loss of $25.5 million, including a pretax charge of $51.5 million for restructuring. Celestica lost $39.8 million last year.

"Stable end markets, improved operating efficiency and benefits from cost cutting have allowed Celestica to show improvements in its second quarter results," said Steve Delaney, CEO, in a statement. "Our revenue is growing, our margins are improving, our European and Americas operations are profitable again and we are starting to show positive earnings momentum.

Celestica guided for third-quarter sales of $2.25 billion to $2.40 billion and adjusted earnings per share of 11 to 17 cents.

Celestica is continuing its acquisition of another major EMS firm, MSL. In a research note, Deutsche Bank forecast Celestica's internal restructuring, new program ramps and the acquisition of MSL would drive continued sequential operating improvement in the September quarter.

Willow Grove, PA —Tyco Electronics' (http://automation.tycoelectronics.com) P350 is an x-y insertion machine for automatic insertion of PCBs.

The fully automatic machine can apply a variety of terminals for PCBs with three product-specific insertion heads. Each head has a rotary insertion finger that allows products to be applied at different angles without rotating the PCB. Conversion kits for different insertion tools are available to allow as production requirements change.

The machine is SMEMA compatible and supplied with PCB transfer belts for inline operation. PCBs are positioned under the insertion head by an x-y table driven by servo motors. A multi-tasking controller controls the entire system by driving the motors and monitoring the insertion process. Operator interface is via icon driven software with a touch screen monitor.

It can insert up to 350 pins per minute, has a maximum insertion area of 600 x 400 mm, and features 0.02 mm repeatability.

SAN JOSE, July 20 - Sanmina-SCI showed a third-quarter profit as revenues jumped nearly 16% from the year-ago quarter, but the company will take a $100 million restructuring charge as it reduces capacity in North America and Europe.

For the third quarter ended June 26, Sanmina-SCI reported revenues of $3.07 billion, up 7.2% sequentially and 15.9% over last year. Operating income was $68.8 million, an increase of 21.1% over the prior quarter and up 72% from last year.

Sanmina will incur a restructuring charge of up to approximately $100 million as it shifts capacity from North America and Western Europe to Eastern Europe, Latin America and Asia.

"Our Eastern European, Latin American and Asian operations are operating more efficiently than previously forecast," said Jure Sola, Sanmina's chairman and CEO, in a statement. "As a result, we plan to realign our manufacturing operations in high-cost locations, and leverage our expanding capacity and technical capabilities in more cost-efficient regions such as Eastern Europe, Latin America and Asia." However, Sanmina's PCB capacity utilization rates are reportedly somewhat lower than other major firms. Merix, for example, recently reported capacity utilization rates of over 90%.

By restructuring, Sanmina-SCI expects to save $22 million to $24 million per quarter, president and COO Randy Furr said Tuesday on a conference call with analysts. The company did not say which plants were targeted for closure.

Earlier in the quarter, Sanmina-SCI announced the pending purchase of Pentex-Schweizer, a Singapore-based PCB company.

For the quarter, cash cycle days improved to 31 days and inventory turns rose from 9.3 in Q2 to 10.4. At quarter's end, Sanmina reported $1 billion in cash and short-term investments, working capital of $2.2 billion and stockholders' equity of $3.3 billion.

"Our results this quarter are primarily due to growth in key customer end-markets and increased demand for our high-end EMS product programs," said Sola.

Sanmina-SCI reaffirmed its guidance for fourth-quarter revenue to be in the range of $3.1 billion to $3.3 billion.

SAN JOSE, July 19 -- Orders for semiconductor equipment rose sharply in June as North American manufacturers posted a 90-day book-to-bill of 1.08.

The 90-day average of worldwide bookings was $1.61 billion, up 3% from the revised May numbers and 123% year-on-year.

The 90-day average of worldwide billings was $1.48 billion, up 5% from May and 91% ahead of last year.

"Despite the premature negative commentary by some Wall Street analysts, the semiconductor equipment industry continues to maintain growth at high levels," said Stanley Myers, president and CEO of SEMI. "Total bookings remained strong throughout the second quarter and are at levels more than double that of one year ago."

A book-to-bill of 1.08 means that $108 worth of orders were received for every $100 of product billed for the month.

Carlsbad, CA -- Asymtek (www.asymtek.com) has developed a method for applying solder ball reinforcement material to semiconductor packages that can eliminate the need for dispensing secondary underfill in PCB assembly.

The company's DispenseJet DJ-9000 shoots a fluid stream of underfill adhesive as small as 100 micrometers wide between balls on CSPs and other BGA packages during the semiconductor packaging process. Other methods of pre-applied underfill have resulted in contaminating the solder balls or have been too costly to ramp into production.

Jetting the underfill prior to board assembly without contaminating the solder balls allows semiconductor packaging companies to offer packages with improved reliability without the cost of traditional underfilling.

Typically, CSPs or other BGA packages require adhesive underfill to glue the component rigidly to the PCBA to prevent failures due to shock. If the primary failure of a non-underfilled CSP or other BGA package occurs at the ball-package interface, the pre-applied solder ball reinforcement reduces the probability of joint failure at that interface.

The cured reinforcement material relieves the stress at the ball-substrate interface by reducing the geometric stress concentration factor at that point. Therefore, the solder joint withstands more load during shock-loading or thermal cycling.