Manz: A Total Process Solution
At CPCA Show 2015 in Shanghai, China, I had the pleasure of speaking with Alex Liu, of Manz AG. Manz has focused on creating a process from direct imaging to wet processing. With more entrants into the direct imaging arena, Liu feels that this approach gives both Manz and their customers an advantage.
Barry Matties: Alex, please tell us what Manz does, exactly.
Alex Liu: Manz is a listed company in Germany, founded 27 years ago. They started in automation—in the integration of machine systems. They used to be very strong in the solar business, but after 2008, acquired a couple of companies. One of those is Intech Taiwan, which specializes in wet processing—chemical processes. They serviced the display business and also the PCB business. We were then able to integrate the dry processes with the wet processes to become a total solution provider.
Matties: So now you're in the direct imaging and wet processing equipment business, from start to finish. Laser direct imaging is a pretty competitive sector, isn’t it?
Liu: Yes, and we have a different strategy. First, we offer a total solution—a super fine-line solution. We have an integrated process line, from imaging through wet processing, with each process harmonious with the next. We cooperate with a company called KLEO in Germany, to provide the exposure units. The advantage is that we have a complete process.
As another integration example, we announced last year the metallization solution, as we call it. We’ve built this line for more than 15 years, and we have market share of more than 75%. Last year, we launched our first horizontal plater, so that customers do not need to take out the panel from PTH to the VCP [vertical continuous plating] line, because they are directly, horizontally connected. This meant no excess handling and all from one supplier. For the customer’s benefit, it's easier to process.
Matties: So they buy the equipment and then you do all the service, installation and maintenance. Do you charge a service fee for your equipment service?
Liu: We try, but in China it is always difficult. The preventive maintenance contract is tricky in China. China customers are always expecting something for free, especially maintenance, but we sell differently. We have a free preventive maintenance program that we're offering—a free service during which we inspect and then from time to time we recommend which spare parts need to be replaced. So we offer equipment service/maintenance in a different way.
Matties: Let's talk about the plating process. You are not producing chemicals, only equipment, right? Do you work with chemical suppliers specifically?
Liu: Yes, we work with Dow and have a very close relationship with them.
Matties: Would you say your equipment is primarily targeted for the Asia market?
Liu: More or less, yes. Our structure is this: for Asia markets, China is the biggest one, still 35–40%, Taiwan another 30%, and the rest is spread out through Asia, with a very limited percentage in Europe. Because we're a German company, we also sell a few lines to some companies in Germany.
Matties: Nothing in America?
Liu: Not yet. We have U.S.-based customers, but nothing installed in America. We need to think about how to serve the customer there before we begin selling something, because it's very long distance.
Matties: Is this something that you are looking at doing, or is it off in the distant future?
Liu: Actually, we recently hired a U.S.-territory sales manager, and the Manz group has two branch offices in the U.S. So we will try to penetrate the market through our own sales force first. But it takes time because the U.S. production is not a strong field, quantity wise. We need to choose what market we're going to penetrate because I think only prototypes and high-end boards can survive in the U.S. So first, we need to think about what kind of products will fit this market.
Matties: Let's talk about the market in China. What is driving technology there? Where do you see the market heading and what sort of demands are being put on suppliers?
Liu: Actually, we did a survey a couple of weeks ago regarding consumer electronics, especially in handheld devices. Let's take the iPhone as an example. For the iPhone 6 they are using 14-layer PCBs. I think if you want to integrate so many functions in such limited space you have to make a really, really fine line, and then the material must be ultrathin. Otherwise, you cannot manufacture 14 layers. So I think our marketing direction is in screen sizes, more integrated functions, and fine line.
Take, for example, a good etcher. Laser direct imaging (LDI) provides a very fine image, but in order to make it into a real circuit, very good developing and etching equipment is required. This is one thing, and the other is ultrathin materials. Many people are trying to process vertically. It's just preventing some thin materials from having some structure in the horizontal transportation. So I think this was still driving the equipment direction—ultrathin materials and more fine lines. This will be the future.
Matties: Cellphones are a big market for you, obviously, in China, where they are abundant. They're everywhere, but there's still a lot of room for new Chinese cellphone users, right? What sort of growth do you anticipate in cellphone sales?
Liu: I think that first we must talk about the technology difference. For example, Xiaomi is the most popular brand name in China and they are using traditional HDI—about 10 layers. If we want to penetrate this market, then we need to adjust our equipment. In the beginning we served the likes of Samsung, and now Apple, which are more high-end, so we need to adjust the equipment to more normal standards. For us, the biggest challenge is how to treat our Chinese customers. For example, how do we handle the payment terms, capacity-wise, and the reaction speeds; we need to modify both. They are expecting very high reaction. The term of the payment is different than the rest of the world, so we have to modify that.
Matties: What about the automotive industry? Is that a growing industry in China for you?
Liu: Yes, it definitely is. Last year, China sold approximately 21 million cars, which is a high volume. For us, it's due to the limited experiences with the multilayer board. So far we only have one customer, Cosmotech, which is in Korea. But we see this as a stable growth market. We think it's a positive market.
Matties: How long have you been in this business?
Liu: Since 1989.
Matties: So you've seen a lot of change in this business arena. What is the greatest surprise that you've seen?
Liu: For me, it would be technology because I started in PCBs as an engineer. I have seen a big change in engineering capabilities. For example, during my engineering time we were dealing with 6 mils, which is 150 microns. At that time it was considered fine line and it was very difficult to create. But now we are talking about 15 microns, so that’s one-tenth. This is really surprising me and it's really fun.
Matties: Are you surprised at how large the PCB manufacturing sector has become in China? In 1989 there weren't that many fabricators in China, and now there are more than 2,000.
Liu: Yes, I am surprised. If you're talking about the market size, I think China would definitely be number one. If you're talking production, China is also number one. If you're talking about China and Taiwan together, I think that probably more than two-thirds of the PCBs in the world are manufactured and/or assembled in these two countries. So I think these two countries still lead this market. Technology-wise, I think Taiwan is a bit more advanced than China. I personally believe that these two places will be the future for PCBs. In Japan and Korea the production cost is getting higher.
Matties: We're seeing a lot of automation in China. Are your machines fully automated?
Liu: Yes, and we have a new concept that we call CIM—computer integrated manufacturing. We're starting with Korean customers because they want to produce the same standard PCB in all their worldwide factories, so want a standard procedure and process for all machines. They actually download a process/procedure from their headquarters in Busan to all connected equipment and then adjust the parameters and settings. They produce the boards and send feedback quality information to the central computers, which can give another instruction if something needs to be adjusted.
The reason why we're doing this is because in China we see the labor cost increasing, and the turnover rate of employees is high. That means if you rely on intensive-training of employees for some process, it will be a big problem because people are changing jobs so frequently. So in the future we have to stabilize production recipes. I still believe that this kind of high-end automation will be the future. Not only island solutions, but we have loading, unloading, and buffering systems. It should be all the data exchange; full in-line connection will be the future.
Matties: How do you see the Chinese market over the next year? Does it look as strong as in the past, or do you think it's going to be stronger?
Liu: I think for PCBs, it will remain very stable. I think it might see a 3–5% growth.
Matties: That's not very much for China, is it?
Liu: They need to get used to that. Not everything can grow double digits for the long-term. This year, though, they will modify the growth of the GDP to less than two digits. The industry is the same, but I believe that the product structure will be changing because some low-end products are not produced in China anymore, so they need to upgrade themselves. This will give opportunities for high-end equipment suppliers.
Matties: How did you design all your equipment? Do you have a team of engineers in your facility that design the equipment? Tell me about that process.
Liu: The PCB business in Manz Group is 100% located in China. That means we're taking orders and we're developing everything here. We have an R&D department, and we have about 70 people. We have three sections: mechanical, electrical, and programming. They are in charge of developing the new equipment for future demand. Also, they need to do the testing, we have another ten people in the lab. The lab facility checks the results: testing, microsections, photographs, etc., there's a whole process.
Matties: In terms of your service department, how many people do you have for customer service out in the field?
Liu: About 45 people and I believe that two-thirds of them are spread out in China.
Matties: One of the things I'm seeing in the LDI race is print time. It's getting faster and faster. What is the cycle time for your print process?
Liu: We can do 180 panels per hour, both sides. That means 360 sides are exposed every hour—probably the fastest in the world. And these are large panels, about 675 mm [26 inches].
Matties: Well, Alex, thank you so much for your time and your insights.
Liu: You're welcome. Thank you so much.