Reading time ( words)
Nolan Johnson and Tony Senese—manager, business development group, Panasonic EMBD—discuss the evolution of the materials marketplace over the years from a time when the market aligned for the rise of Panasonic’s MEGTRON 6 to the ever-changing materials industry of today. With the ramp-up to 5G and everyone pushing product development, Tony describes a chaotic materials market flooded with new companies and materials. To succeed in such an environment, Tony says that the key is creating stability through high-level partnerships.
Nolan Johnson: Tony, there is a definite trend in the marketplace, moving away from FR-4 being the answer to everything. Increasingly, designers need to consider the following: high speed, low loss, high performance, environmental extremes, reliability, flex, smaller packages, and new technologies for chip mounts. With all of these dynamics, it’s no surprise that manufacturers’ product portfolios are fracturing. What’s the Panasonic perspective? Where is the market going?
Tony Senese: I will give you a general overview, and then if we need to go into specific product lines as they relate to those market segments, we can talk a little more. But the thing that has changed in the 40 years isn’t as obvious as you might think.
FR-4 has been the mainstay of multilayer since the late ‘70s. Other products that existed then have mostly faded away. We’ve gone through several phases in material development, and a lot of those throughout the ‘70s were driven by military technical needs and specifications. FR-4 was the mainstay for most PCBs then; it was a low Tg product, but it was very easy for people to manufacture double-sided boards successfully up to six or eight layers at the time.
Soldering has always been a problem. Some people believe that lead-free soldering was the beginning of the problem, but we’ve always had problems with soldering, moisture absorption, and thermal reliability. In 2005, the RoHS directive prohibited lead as well as other materials. An exemption for certain network equipment was given through 2010. Low loss materials of the time didn’t work in lead-free soldering. That was a disruptive event for material suppliers. All of the things that the material suppliers had been working on for 15–20 years were now more or less obsolete. And there were materials that might have worked, but most of them were never commercially successful.
Panasonic was in the right place at the right time with some good technology and even better OEM marketing. I think that term has fallen into disuse, but it was smart people in the materials business talking to end users and figuring out quickly that they had an immediate need for a material—a material that was thermally robust, low loss, and low Dk, so that they could prepare to use lead-free solder in IT equipment by 2010. Companies like Cisco, IBM, and many others all had designs that worked until lead-free solder came around.
There were a number of offered solutions in the materials business, but the one that hit both of those notes happened to be a Panasonic material—MEGTRON 6. Using a material made in Japan was more than just a technical challenge. North America was still driving most of the designs; most NPI boards were being built here, and there wasn’t a good supply model for a material like MEGTRON 6. Some of the materials that were tried just couldn’t be supported by the supply chain.
Panasonic had a new distributor in North America that committed to keeping a whole bunch of inventory. It enabled low-volume, high-mix usage of a couple of Panasonic products that the OEMs were able to make work. This meant that OEMs that had strong connections with North American laminators had their successful experience with an Asian laminator on the high end of the business. And that changed how the world looked at who could supply and would develop the next materials.
This enabled a two-step process for developing products. We would do new product development and evaluations at the high-end shops with high-end materials, in North America. We started early in production, maybe even early mass production, and then quickly transferred to Asia. Companies like TTM and Sanmina, etc., were able to do that successfully for the first time because they were accustomed to fabricators with local supply and laminators due to the need to get raw materials quickly.
We’ve now gone through several generations of increasing speed in the IT business. Other product markets, such as mobile and automotive—which are the largest users of materials in the world—didn’t have that same kind of model. They saw that type of model working, though, so for developing technologies for their next-generation products, they started doing the same thing. The latest developments in some of the high-frequency ranges have pushed those products away from basic halogen-free FR-4s into some non-FR-4 type products. FR-4 is still over 50% of all the material used in the world, but some of these fairly high-volume applications are moving to other things.
And that’s a new story. The largest laminators in the world are primarily FR-4 suppliers. Even large suppliers in Asia have tried to enter the high-end market because they believe that even though FR-4s probably are never going to go away, the ability to support a $1–3 billion materials business is becoming less likely.
Johnson: What are some of the market dynamics driving the new materials?
Senese: The primary dynamic is that the base business—I always think of it as an iceberg underwater, and it is underwater in more ways than one—is a losing business proposition. The cost of materials that we use—such as resin, glass, and copper—are lower than they’ve ever been. There’s not a lot of room for anybody because they’re either not making money or they’re in single-digit income. That business proposition makes it very difficult for fabricators in the middle because they have constant pressure from all of the largest OEMs to reduce the price for their boards.
If you can’t squeeze that rock anymore, you have to find a better way to make the devices. Our industry has always made devices to handle more information at the same price, essentially going faster. While less expensive devices like phones are made with materials more expensive than FR-4, they’re less expensive because they’re getting so much more data.
To read the full article, which appeared in the May 2019 issue of PCB007 Magazine, click here.