Three Industry Giants From WKK Gather Around for Discussion

Reading time ( words)

GW: They're debugging the systems. They started from zero, they put in a building, and they have 12 engineers and technicians running two shifts a day.

007: They purchased a lot of U.S. fabs as well didn't they?

GW: Yes that was interesting. They have a custom-designed plasma, they have a custom-designed waste treatment system designed by the general manager of the plant, an oldie in our industry, Alex Stepinski of Sanmina and other places in the past. They have some innovative approaches to the handling of the legend ink to the handling of solder masks to protect the layer that goes down before the legend ink. It was highly innovative, their plating was all horizontal, by Atotech (that's western), and the machines were dual routers, single station, high versatility and they paid 10% more than say a 5-6 spindle set up or the equivalent. I said, "Why did you do that?" and they said because the versatility and productivity is greater. I think much like many other things, the days of conventional electroless copper are gone. They're using the latest Isola products. The days of conventional drillsets are gone, although there's always going to be some. The days of imaging using photo tools are waning. It will be a minor part of production except for maybe the Chinese copycats within 10 years.

007: You know I went to visit Dongguan Somacis Graphic (DSG) out in Dongguan recently and I was thinking here's a company that came in not with a Chinese mentality but a business mentality.

GW: A European business mentality—very smart and very successful.

007: They set up a factory and have 470 people and they're pumping out $60 million in sales and plan to double that without adding additional staff. I'm thinking, why can't we do this?

HEA: Nobody wants to spend the money. 

GW: Well we can do that. Yesterday Phil Plonski, senior managing partner of Prismark Partners, gave a paper. One of his conclusions is a little beyond that which his other partner gave at the IPC meeting in North Carolina in that we have two opposing forces at work here: The need for volume at a lower cost and the need to develop and insert new technology and support the funding. The OEMs are out of it, many of the ODMs have decided to brand their own product and now we're seeing the Chinese smartphones in Europe and the U.S. In addition to that, the supply chains have concentrated. WKK is a major supply chain supplier. As the industry consolidated they consolidated their supply chains. So for a small independent that has a breakthrough, to break into the trusted supplier for the large guys running millions of parts is very difficult. So we have opposing forces and a new method of marketing the entire thing.

LF: I think you have also got the situation where the local and central governments supporting China is all for the companies. They understand that this is a competitive world; they understand that their market is essentially outside of China at least for the foreseeable future; ergo the whole mechanism is such that you could get a shipment out of China in one day. It appears, and this is my personal opinion, that the U.S. government is adversarial rather than supportive of business developments in the U.S. Even clean business, even automated business, because as you said it doesn't matter where that factory is, you can put it anywhere in the world that's supportive, but China is much more supportive of the concept than we presently have in North America. 

007: Interestingly, while I was visiting DSG, Mauro was saying that the government is encouraging not bringing in employees and instead to bring in automation, because the government realizes they have to go this route to stay competitive, at least that's how I interpreted it. 

GW: Additionally, they have to do it to gain world standard in quality. If they don't do this they can't compete in quality globally. There’s an interesting thing yesterday when I went to Hall 2, which is just chemicals and materials. I spoke to one company and they said their revenue doubled this past year and their profits declined. I asked why and he said to look at all the copycat, reverse engineer companies here in chemicals and materials. They are all new and they're coming out claiming to have everything. They first thing they say is “My boss used to work for MacDermid” or “My boss used to work for Dow Chemical.” The second thing they say is “I have the cheapest parts.” Nowhere do they talk about service, nowhere do they talk about performance, and nowhere do they talk about consistency. So in a way, many Chinese are succumbing to the conclusion that price is king, not cost, price.

007: That’s interesting. 

GW: It's a different look.

007: What do you think about China, Hamed? We talked about China a few years back, and in the last five years has your perception or attitude shifted at all?

HEA: No it hasn't shifted that much really. I think that the Chinese are going to be faced with a lot of very difficult problems. As Gene was just saying, everybody is copying each other and it's creating a situation where you really don't have good quality products because one guy copies another guy who copies another guy. There's no respect of the information, technology and the proprietary technology that you have out there. But given the country as a whole, they're having a lot of problems. First of all their healthcare system is basically not really in place and the government is very seriously concerned about how they're going to deal with that. Gene was mentioning a minute ago about the shift in power and how they're now number one and the U.S. number two. They do believe that they are the real economic power today. They do believe that they're building a military which will be able to show that force that they have, as the United States has done for years.

I have my serious doubts whether they are really there yet or not because they're copying in that area as well. You know they just released a fighter jet which copies the F35 but it will be five or six years before it can really run under combat conditions. There are a lot of things that you have to be concerned with and one of things that I have mentioned over and over is the amount of automation that is coming here. As a matter of fact in order for these big boys to compete they have to accelerate automation. We just had a customer this morning tell us “I want that machine, but I want it automated. If it's not automated I'm not going to get it. I want full automation.” So then you have to ask yourself a question, if they automate as much as they're going to be automated, what are you going to do with all the people? America has 300 million people and they have 1.5 billion. There’s going to be some uncertainty because their population is so large and they're still not at the education level where they can do other things and it will definitely affect their economy. We were talking the other day about Foxconn putting in a hundred thousand robots this year, next year they want to up it to a million robots and the year after that even more. But what are you going to do with all the people? We have to begin to think about that today. 

007: Interesting that you mention it because I was looking at the new generation of young people here and it’s so different from just 10 years ago—their attitudes, the status that they're going for with iPhones and such, and especially the amount of cars. Holy-smoley, there used to be one or two cars in a parking lot.


Suggested Items

I-Connect007 Editor’s Choice: Five Must-Reads for the Week

05/26/2023 | Andy Shaughnessy, Design007 Magazine
It’s been a busy week here at I-Connect007, an even busier week for PCB designers and manufacturers. This week, we published a variety of articles and news items. In this week’s wrap-up, we have an interview with Rex Rozario that is basically a historical look at the birth of commercial PCB manufacturing, and his involvement with the Rolling Stones in their early days. Then we bring you a look at trends in freight costs, which are—fortunately—heading southward right now.

Knowledge: At the Heart of Great Customer Service

05/26/2023 | Barry Matties, I-Connect007
David Thomas, master IPC trainer at EPTAC, says that the more you understand the work and technology that go into your processes and products, the better you can serve your customers. That includes knowing the basics.

I-Connect007 Editor’s Choice: Five Must-Reads for the Week

05/19/2023 | Nolan Johnson, I-Connect007
This week, our must-reads include reporting on the new PCB support legislation, now submitted to the U.S. House of Representatives; financial results from two Tier 1 manufacturers, which readers read quite thoroughly; ESG in Asia Pacific; new features from Altium; global sourcing; and a “How I got here” interview with an up and coming industry expert.

Copyright © 2023 I-Connect007 | IPC Publishing Group Inc. All rights reserved.