Technology for a New Year

Each year brings its own challenges and opportunities. During a recessionary period, people get creative. Though we have struggled for financial security, new ideas and applications in electronics will bring forth growth in the upcoming year.

For example, the new refrigerator in my kitchen has a bright Energy Star symbol on the front and a written estimation of operation cost for the year. The thermostat on the wall came with an Energy-Star-approved program recommended by the EPA for energy efficiency.

The grid system of energy usage in the U.S. is slowly evolving to smart electronics control as well, as we adapt to reduce power consumption. Lowering our carbon footprint will march right along in 2010.

RoHS Directive rules (2002.95/EC) are expected to apply to medical electronics in 2010, and many medical monitoring equipment makers are already converting to lead-free parts. This presents more challenges in a steady manufacturing sector that didn’t have the initial burden of RoHS that most board assemblers experienced. For more on REACH and RoHS, as well as new environmental legislation, read advisory board columnist Laura Turbini, Ph.D., RIM, in Our Relationship with the Environment.

One area that has been developing all along, and will see healthy support in 2010, is printed electronics. This should save on costs and fabrication steps as well. New circuit printing processes promise lower-cost ICs than conventional printed circuits.

Printed electronics on flexible substrates will affect many markets, adding RFID tags, OLEDs, and LEDs to traditionally non-electronic items. As I write this, I’m en route to California, where I’ll visit Kovio Inc. in Milpitas, CA. This company has been active in printed electronics since 2001. It manufactures RF barcodes from specialty inks using a printing process. Read a 2007 interview with the company from SST's WaferNews.

What will the new year mean for SMT? Market shipments are up and the North American PCB book-to-bill, published monthly by IPC, is strong. For some applications, PCBs will have printed RF on them for tracking; expect this higher level of traceability to become increasingly common.

Gail Flower, editor-at-large

Eastern European Near-sourcing on the Rise

Much has been made of the attendance numbers at productronica 2009 this year in Munich, Germany. As economic reports have trumpeted a better 2010, and electronics manufacturers have started to see a ramp in RFQs and orders, productronica’s attendance numbers jumped higher than anticipated. What kind of attendee visited the November electronics manufacturing show? From SMT’s informal poll of exhibitors, the attendance base was more European and, of those, more German than in prior years, with fewer attendees from Asia and the U.S. Many exhibitors pointed to Hungary and other Eastern European countries as sending motivated attendees — those sourcing equipment and materials to purchase.

Eastern Europe has a well-trained workforce for electronics manufacturing, according to many companies that sell equipment into the region. It is also linked via a strengthened infrastructure to the EU, with cultural similarities outpacing Euro-Asian business partnerships, and lower transportation costs than the Asia outsourcing model. The difference in labor costs between Eastern Europe and Asia can often be offset by transportation costs, time-to-market, and collaboration abilities. Several large EMS providers run facilities in Eastern Europe as well as Asia: Elcoteq operates in Hungary and Estonia, in addition to its China and India locations. The EMS provider states that it is interested in a broad range of customers, and this diversity of manufacturing bases can help achieve this. Flextronics recently made an acquisition in Slovakia to bolster its medical capabilities.

While none of this is new, productronica 2009 bore out the proof of Eastern European electronics manufacturing surviving the 2008–2009 recession, with companies selling equipment to Eastern European manufacturers, and many exhibitors saying that their most solid potential-customer interactions came from assemblers in this region. The proportion of foreign visitors to the show fell slightly to 42% (2007: 45%). However, there was a further increase in the expertise of visitors. The number of decision-makers rose from 88% in 2007 to 91% this year. The proportion of visitors from the top management level in their company increased from 15% in 2007 to 19% in 2009.

What drove the higher pan-European attendance at productronica 2009? Many possibilities exist, and it was likely a play of many factors coinciding. Travel budgets are limited for virtually every company, making international attendance more challenging. Asia has 4 major tradeshows coming up from end of 2009 through mid-2010, including Nepcon Japan, Nepcon China in Shanghai, Nepcon South China in Shenzhen, and Bohai Electronics Week in Tianjin. Asian manufacturers looking to add capacity or source new materials could likely wait for these regional shows to peruse the market, especially as investment budgets are still cautiously guarded. However, the increasing desire for smaller lot sizes, more reliability, and increased OEM/EMS interaction sets the stage for Eastern Europe to gain importance on the global manufacturing scene. With better trans-European infrastructure, cultural similarities, and a limited-cost workforce, near-sourcing to Eastern Europe is an attractive option for companies seeking those aforementioned qualities. For more on the shift away from Asia outsourcing, read Is the Migration of Electronics Manufacturing to Asia Slowing? from Charlie Barnhart Associates.

The next productronica will take place at the New Munich Trade Fair Center from November 15 to 18, 2011. Read the full report on productronica attendance on SMT’s Website, Demographics of productronica 2009

Meredith Courtemanche, executive editor