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SMT Components and Capital Investment

SMT Components and Capital Investment EDITORIAL By the year 2000 electronics will be the largest single industry the world has yet seen, with an output valued at around 1400 billion US dollars. Changes in technologies and markets combined with rapid growth in specialisation and globalisation, is making this an extremely complex industry and SMT is not exempt from these trends. Electronics are driven by lower costs and higher performance with the result that maintenance of at least a constant sales value generally requires a continuing increase in volume. Combine this trend with the introduction of new technologies in interconnection and packaging, and even higher levels of capital investment appear inevitable. If we look first at the innovations in interconnection and packaging, what is becoming apparent is that the transition from insertion components to the current SMT devices is now moving on to even higher density components, including direct attach integrated circuits such as TAB, flip-chip and COB. These newer components require finer pitch spacing, putting pressure on yields but probably more serious is their general availability in the West. In particular, Japan with its' more vertically integrated organisations ensure that its' systems groups encourage and support their component suppliers and are careful not to regard them as a separate industry. The Japanese approach, which encourages joint risk and funding certainly creates high levels of innovation. In my view, the future availability of advanced SMT components, either as direct attach integrated circuits or passives could pose a serious problem for the electronics industry of the West. Any electronic system is largely a collection of components and whoever controls the supply of components could ultimately control the systems manufacturers! Secondly, the move to higher volume, combined with more complex packaging and interconnection technology will require higher levels of capital investment. Looking at the SMT industry today and taking the value of output against the total number of players we see developing the well known Pareto curve, i.e., the 80/20 rule. With most companies spending about 7% of their sales on new capital investment, this is probably sufficient for the larger units, but those of medium size may well find themselves unable to remain in the business. Even the smaller batch units need to be aware of the flexibility that can eventually be built into the larger lines. The problems of future component availability and the increasing levels of capital investment are critical features for the future of SMT. Industry-wide acceptance of these two trends need to be recognised by the West if SMT is to continue its' important and growing role. Maurice Sage BPA http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Soldering & Surface Mount Technology Emerald Publishing

SMT Components and Capital Investment

Soldering & Surface Mount Technology , Volume 4 (2): 1 – Feb 1, 1992

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0954-0911
DOI
10.1108/eb037783
Publisher site
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Abstract

EDITORIAL By the year 2000 electronics will be the largest single industry the world has yet seen, with an output valued at around 1400 billion US dollars. Changes in technologies and markets combined with rapid growth in specialisation and globalisation, is making this an extremely complex industry and SMT is not exempt from these trends. Electronics are driven by lower costs and higher performance with the result that maintenance of at least a constant sales value generally requires a continuing increase in volume. Combine this trend with the introduction of new technologies in interconnection and packaging, and even higher levels of capital investment appear inevitable. If we look first at the innovations in interconnection and packaging, what is becoming apparent is that the transition from insertion components to the current SMT devices is now moving on to even higher density components, including direct attach integrated circuits such as TAB, flip-chip and COB. These newer components require finer pitch spacing, putting pressure on yields but probably more serious is their general availability in the West. In particular, Japan with its' more vertically integrated organisations ensure that its' systems groups encourage and support their component suppliers and are careful not to regard them as a separate industry. The Japanese approach, which encourages joint risk and funding certainly creates high levels of innovation. In my view, the future availability of advanced SMT components, either as direct attach integrated circuits or passives could pose a serious problem for the electronics industry of the West. Any electronic system is largely a collection of components and whoever controls the supply of components could ultimately control the systems manufacturers! Secondly, the move to higher volume, combined with more complex packaging and interconnection technology will require higher levels of capital investment. Looking at the SMT industry today and taking the value of output against the total number of players we see developing the well known Pareto curve, i.e., the 80/20 rule. With most companies spending about 7% of their sales on new capital investment, this is probably sufficient for the larger units, but those of medium size may well find themselves unable to remain in the business. Even the smaller batch units need to be aware of the flexibility that can eventually be built into the larger lines. The problems of future component availability and the increasing levels of capital investment are critical features for the future of SMT. Industry-wide acceptance of these two trends need to be recognised by the West if SMT is to continue its' important and growing role. Maurice Sage BPA

Journal

Soldering & Surface Mount TechnologyEmerald Publishing

Published: Feb 1, 1992

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