EIPC Technical Snapshot: Business Outlook
A headline in a Sunday newspaper had caught John Ling’s eye as he composed the invitation to this fourth EIPC seminar: “Now, more than ever, we need to talk.”
“Better communication with colleagues can help in these turbulent times. Manufacturing industry continues, in spite of all the obstacles, and the need to keep informed has not lessened. Thus, it is that EIPC has decided to run another technical webinar, which is just like one of our conferences, except that you do not have to travel, you do not have a beer with colleagues, you do not enjoy excellent food, and you do not enjoy convivial company. But we do not live in normal times, and some things are not the same. Manufacturing PCBs, however, remains comfortingly complex.”
The EIPC team, led by Executive Director Kirsten Smit-Westenberg did its usual exemplary job of organising and coordinating the fourth in a series of Technical Snapshots on January 20, which included a keynote business outlook from Walt Custer. The webinar attracted an online audience of over 70 and was moderated by EIPC President Alun Morgan.
Live from the U.S., with the Golden Gate Bridge as his Zoom backdrop, Walt Custer gave his business outlook for the global electronics industry with an emphasis on Europe.
“What’s going to happen next? 2020 was an awful year. Most of the reviews indicate that things are looking brighter as we enter 2021, but COVID is still the biggest concern,” he said. The timing of EIPC’s webinar coincided with America’s presidential inauguration ceremony; Custer expects that the change in administration will have a positive effect, and that the world will see major changes in the way the U.S. behaves.
Global manufacturing is expanding, the terms of Brexit have been agreed, and there are signs of a rebound in manufacturing in Europe.
Current figures from the World Bank forecast the real rate of global economic growth to be 4.0% for 2021, after an estimated -4.3% for 2020. The Euro-area has shown the largest contraction at -7.4% compared with -3.6% for the U.S., but growths of 3.5% and 3.6% respectively are forecast. China maintained positive growth of 2.0% in 2020, and this was forecast to increase to 7.9% in 2021. Global growth is expected to strengthen as vaccination continues.
Purchasing Managers Indices are indicating expansion for the Eurozone, especially for Germany, and European electronics products production have shown a sharp recovery. Automotive electronics have been hit very hard, both in Europe and North America, but both markets are now recovering. The aero sector remains in serious trouble, although instrumentation and control electronics are recovering. There has been an upturn in medical electronics in Europe, and world-wide shipments of personal computers have shown substantial growth because more people are working from home.
Turning his attention to the semiconductor industry, Custer commented that shipments continued to grow at about 6% per year, although not as strongly as in the 2017-18 cycle, and there was significant growth in semiconductor capital equipment, anticipating the next upturn. European semiconductor market data collated by DMASS indicate that growth is becoming positive again, although Europe represents only a relatively small percentage of the world total.
The combined revenues of Custer’s composite of global EMS and ODM companies had shown a 7% increase in Q3 of 2020 compared with the same quarter in 2019; Taiwan had reached an all-time peak in December, although European assembly had not yet recovered to pre-2020 levels.
Custer’s comments on the printed circuit board market began with detailed figures for a broad composite of Taiwanese and Chinese manufacturers, which continued a rising trend, up 3.4% in 2020 compared with 2019.
His figures for Europe were based on data generously shared by Michael Gasch and Hans Friedrichkeit, whose contributions he gratefully acknowledged.
Gasch estimates that revenues in Europe were likely to have declined between 15–18% to about 1.5 million euro, worse that they had been in 2009 after the financial crisis. His explanation was that at the beginning of 2020 Europe did not know what was in store—lockdowns and panic in the second quarter, false security in the third, and shortages and price increases in the fourth quarter. Additionally, a shortage of freight containers might have hampered logistics. The next big issue expected will be a “price-tsunami” coming from Asia. High demand in the automotive and communication industries, together with shortages in copper, glass cloth, and resins, are likely to lead to panic buying, and double and triple bookings. Companies’ ability to supply PCBs will be influenced by their access to sufficient quantities of laminates.
Friedrichkeit was concerned about the possibility of a double dip in southern Europe for the fourth quarter of 2020. Overall, the Eurozone had contracted by approximately 7% in 2020 and is expected to grow by 4% in 2021. GDP growth in southern Europe is likely to be higher than in Germany, but this will hardly offset the loss from 2020.
Lockdowns in November adversely affected the German economy, and in 2020 the decline in GDP was about 5.0%. Because of current lockdowns, the economy is expected to grow by only 0.5% in the first quarter of 2021, although optimism is growing among German exporters of chemicals, electrical equipment, and automobiles.
Friedrichkeit commented that PCB production in Europe had peaked at 1.9 million euro in 2018, shrank by 8.2% in 2019 before the COVID pandemic, and by another 12.1% in 2020. He expects this to bottom-out in 2021 but predicted that the number of PCB manufacturers would reduce further to 187 in 2019 and 175 in 2020. German PCB production contracted by 10.4% year-on-year in 2019 and by a further 10.9% in 2020. By comparison, Swiss and Austrian PCB production shrank by 8.2% in 2019 and 4% in 2020, partly because of their customers in the medical sector. The Italian PCB industry had been hardest hit, with contractions of 8.4% in 2019 and 15.5% in 2020.
Copper prices are continuing to rise amid significantly increasing demand for batteries for e-mobility, and charges for sea freight from China to Europe have risen massively, leading to increased prices and longer lead times for copper-clad laminates. The shortage of shipping containers because of Brexit and increased storage is a further complication.
Custer’s graph of world PCB monthly shipments put Europe’s position into a meaningful perspective, with the Taiwan-China component trending up toward the $4 billion level and the European line comparatively flat, somewhere near $150 million. European business has improved, but the possibility of a double-dip recession due to COVID remains an area of concern. He believes that the U.S. presidential change will have a stabilising effect on the geopolitical situation. Although manufacturing is recovering, automotive and aerospace production have been hit hard and the service and travel sectors remain in major recession.
What can we expect for 2021? The outlook is brighter provided that the COVID situation can be managed. Eurostat data shows European PCB production by month to be above the trend line. Purchasing managers’ indices are now in positive territory, indicating that manufacturing is expanding in all areas of the world, and Euro-area economic data shows that the corner has been turned. Custer concluded was that things are indeed looking better, and he once again thanked Michael Gasch and Hans Friedrichkeit for their help.
Impact of Millimeter-wave 5G on PCB Interconnection Technology
Erich Schlaffer, R&D programme manager with AT&S in Austria (specialists in high-tech PCBs and IC substrates), gave a pragmatic introduction to the probable impacts of millimeter-wave 5G on PCB interconnection technology.
Why use 5G? Schlaffer sees it as a technology enabler and an essential innovation driver for tomorrow’s megatrends, although it will involve a fundamental transformation in IC packaging and substrates and have a high impact on existing interconnection concepts.
Successful implementation of 5G requires a fundamental transformation in PCB technologies, combining developments in thermal management, loss reduction, miniaturisation, and integration. The transition from sub-6 GHz to millimeter-wave 5G will necessitate enhanced double-sided organic or ceramic-based systems-in-packages and the integration of antennae, front-end-modules, power amplifiers and radio-frequency ICs, together with new low-loss materials and advanced EMI-shielding.
Schlaffer showed an example of a side-facing 5G millimetre-wave transceiver/antenna-in-package module from the iPhone 12, with a 16-layer any-layer stacked PCB consisting of eight high-density layers with 50-micron vias and 40-micron line-and-space for routing 150-micron pitch flip-chip die, plus eight low-density layers with 100-micron vias for antenna structures.
He explained the structural shift from the 4G LTE standard to millimeter-wave 5G. Whereas the earlier concept was to have two standalone PCBs—an antenna board and a digital multilayer, linked by cables and connectors for millimetre-wave 5G frequencies of 28-39 GHz and beyond—the two PCB functions need to be integrated into a single module with a more sophisticated form of interconnection “because cables and connectors don’t work anymore!” His illustration showed an integrated radio front-end module for a massive-input-massive-output active antenna system. The main radio-frequency board had integrated active and passive components, with SMT components on the external surface. The antenna board and the main board were interconnected both electrically and thermally in the Z-axis using silver sinter-paste.
He described a series of alternative enabler technologies for module integration—embedded component packaging, 2.5D cavity and suspended stripline solutions—and discussed various heat-spreading techniques. His concept example for a 5G radio base station showed a high-layer-count multilayer of 3.2-mm finished thickness on halogen-free high speed base material with an asymmetric build up, embedded gallium nitride active components, thermal pads in the Z axis and the antenna on top. The concept example for an integrated RF front end was a symmetrical build up with 20-micron lines and spaces, 50-micron laser microvias and 120-micron component pitch, and demonstrated a heat-spreading concept for an embedded RF chip, using a pyramidal array of copper-filled microvias cascading outward through the layers.
Schlaffer’s presentation provoked a very active discussion in the Q&A session. It is clear that PCB fabrication for millimetre-wave 5G applications will present significant challenges to manufacturers and material suppliers, and that only a few specialists are yet fully equipped to engage in the technology.
Taiyo America: Solder Mask
The final speaker was Taiyo America’s Midwest sales manager Don Monn, renowned for his entertaining and informative presentations at EIPC conferences. He gave an enlightening appraisal of the history and current trends in solder mask, first winding-up his audience by implying that, although they couldn’t see him, he could see them and what they were up to, prompting some anxious checking that their video was disabled!
He set out to answer the question: “What have and what do people want from solder mask?” He listed improved registration, faster processing, robustness to final finish chemistries, OEM acceptance, a rainbow of colours and surface finishes, high reflectivity and colour stability of white formulations and, unsurprisingly, cheaper.
The history began with his comment, “Years and years ago, when many of us were younger...” as he related it to screen printing. Liquid photoimageables were introduced in the late 1980s, followed by laser direct imaging, then direct imaging with multiple-wavelength UV-LEDs, and culminating in inkjet application, which Monn considered the direction for the future.
He reviewed the limitations of traditional screen printing—registration, uneven thickness, skips, smudging, bleed-out, operator fatigue toward the end of the shift—and explained how these had been progressively overcome by newer technology developments. The elimination of artwork by direct imaging was a major advance. The cooperation between ink formulators and equipment manufacturers to optimise the relationships between exposure wavelengths and photoinitiators was another. One remaining shortcoming of coating processes for liquid photoimageables was “mask in holes” because the material was applied over the whole panel then selectively removed by a photographic developing process, and difficulties could be experienced in removing residual material from holes.
Although 40% of solder mask currently used in North America was direct-imaged, either by laser or LED, there was a growing trend toward inkjet imaging. Not only did inkjet offer a fully additive process with the benefit of placing solder mask exactly where it was needed with no waste and the option of varying the thickness as required, it offered a much shorter process sequence, and mask-in-holes problems were avoided.
Monn concluded that the advantages of inkjet printing were too numerous to ignore, and that both PCB fabricators and OEMs would benefit from the trend, particularly as board values were increasing and yields were more important than ever. He noted that inkjet installations had doubled in each of the last two years.
In addition to the developments in application and imaging techniques, there were ongoing advancements in the physical properties of solder masks; examples being the ability to withstand higher operating temperatures and the capability to act as heat dissipators.
Alun Morgan moderated the busy Q&A session, and then thanked the audience for their attention and the speakers for their excellent presentations. In particular, he acknowledged Walt’s contribution of over 50 years to the industry and his long-term commitment to the EIPC as board member and keynote provider of market research, business analysis and forecasting. Walt assured us that he really is retiring now, and we sincerely wish him well.