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Weiner’s World – June 2017
July 3, 2017 | Gene Weiner, Weiner International Inc.Estimated reading time: 11 minutes
Editor’s note: This blog was originally published in June 2017 at http://www.weiner-intl.com/weiner-s-world/ and is being reprinted here with special permission from the author
Please note: There will be no July 2017 Weiner’s World column.
On the way back from Hong Kong last week I had the good fortune of meeting an officer of Allegro Microsystems and enjoyed a wide ranging discussion with him. One of the "take home" items was concern about an expanding shortage of rare earth metals used to make ICs for the burgeoning automotive sensor market. The second was how important the roles of partnering and consortia are in the rapidly advancing autonomous automotive electronic field.
While in Asia this month a number of key EMS and PCB supply chain companies told me that sales and profits this year were better than last year—so far—even though operating margins were a bit "thinner."
The U.S. economy is expected to grow at a 4.0% annualized pace in the 2nd quarter based on the latest data on factory activity, construction and consumer spending released this week, the Atlanta Federal Reserve's GDP Now forecast model showed. Yet the year-on-year increase in wages remained at 2.5%. With the labor market expected to hit full employment this year, there is optimism that wage growth will accelerate.
Acquiring, training, and maintaining employees is still a hot topic
The Surface Mount Technology Association (SMTA) and Thayer School of Engineering at Dartmouth College announced the launch of a new collaboration to provide professional development training workshops through the SMTA organization.
The new partnership will serve the needs of individuals seeking certifications in the area of Lean Six Sigma, Leadership, and Quality training. In addition, the workshops will be made available directly to SMTA members, corporations and other organizations with the goal to enhance employee performance and provide management training. (I once arranged for an on-line MBA program to be offered to IPC members, but the IPC did not act on it.)
The partnership is designed to provide program participants access to internationally renowned, industry-oriented learning and certification from one of the most prestigious educational institutions in the world through “distance learning." Dr. Ron Lasky, director of Thayer School of Engineering at Dartmouth, said that professional development initiatives are applicable to building knowledge and developing the skills for career advancement that are essential, and distance learning programs provide a flexible path to do this.
Further, President Donald Trump announced “Workforce Development Week.” As such, President Trump even signed an executive order expanding apprenticeship programs. The Trump administration asked federal agencies to recommend new executive actions to promote apprenticeships and remove regulations that could be an obstacle to workforce development. Though Trump’s 2018 budget proposal cuts funding for job training programs by 40%, from $2.7 billion to $1.6 billion, the Administration hopes to foster “private-to-private partnerships” on job training through the executive order, “Expanding Apprenticeships in America."[1]
This order would virtually eliminate oversight of government-subsidized apprenticeship programs and shift certification of federally funded apprenticeship programs from the Labor Department to grant recipients. Additionally, the executive order responds to the desire of third-party groups to create more flexible apprenticeship programs and directs the Department of Labor (DOL) to allow companies, trade associations, and unions to develop their own “industry-recognized apprenticeship” guidelines, which the DOL will review for quality, and then approve. (Decades ago Dynachem, subsidiary of Thiokol, partnered with a junior college in Moss Point, Mississippi to develop a course and train technicians needed in a new chemical plant being built there—the program was highly successful and students received credits towards an Associates Degree.) The order also directs the DOL to use available funding to promote apprenticeships, especially in sectors where apprenticeships are not currently widespread.
Concurrently in Congress, a bipartisan Senate bill, The Apprenticeship and Jobs Training Act[2], was introduced by Susan Collins (R-ME) and Maria Cantwell (D-WA). This bill aims to use tax breaks to kick-start apprenticeship programs.
From Dominique Numakura of DKN Research[3]
The following is excerpted from his column:
This year’s JPCA show at Tokyo Big Sight was co-located with JIEP 2017 (31ST ADVANCED ELECTRONICS PACKAGING EXHIBITION), JISSO PROTEC 2017 (19th Jisso Process Technology Exhibition), Large Electronics Show 2017 and WIRE Japan Show 2017. The printed circuit industry in Japan continues to struggle. Event attendees hoped to discover the latest business trends for the Japanese circuit board industry.
The major assembling machine companies, YAMAHA, JUKI, Panasonic and Fuji Machine, did not showcase significant upgrades, but promoted a few small improvements such as higher speed and productivity, easier handling and higher reliabilities. There were fewer drilling machine suppliers at the show than in previous years. They featured new mechanical drilling systems with higher productivity and laser drilling machines for forming micro vias.
Equipment suppliers for the manufacture of flexible circuits did not exhibit any machines related to photolithography or pattern etching this year. Instead they featured product lines aimed at basic processes such as punching and stiffener bonding that provides higher productivity and an increase in accuracy with roll-to-roll processing.
Material suppliers also shifted their focus this year. Laminate suppliers did not feature any Cu clad laminates this year. Instead, they introduced nano-powders, nano-ink targeting companies with newer applications.
Circuit manufacturers featured new technologies aimed at the growing markets for wearable devices, automobile electronics and medical devices. The key words in these segments are stretchable (elastic) and transparent electronics.
In the IC world we see record investments and double digit chip sales increases this year before leveling off in 2018.
The latest update to the World Fab Forecast, published on May 31, 2017 by SEMI, reveals record spending for fab construction and fab equipment.
Korea, Taiwan, and China all see large investments. Spending in Europe will also increase significantly. In 2017, over $49 billion will be spent on equipment alone, a record for the semiconductor industry. Spending on new fab construction is projected to reach over $8 billion, the second largest year on record. Records will shatter again in 2018, when equipment spending will pass $54 billion, and new fab construction spending is forecast at an all-time high of $10 billion.
A new World Semiconductor Trade Statistics (WSTS) organization forecast projects annual global market growth of 11.5% in 2017 and 2.7% in 2018, followed by a slight decrease of 0.2% in 2019. Regionally, year-to-year sales increased in China 30.0% and 26.9% in the Americas.
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