Electronics Manufacturing in 2023: Mexico, India, & the Rise of UHDI

In a captivating 2023 year-end review, Zach Peterson hosts a compelling discussion with Gene Weiner, President of Weiner International Associates, exploring the dynamic landscapes of manufacturing in Mexico, India, and the burgeoning field of Ultra High-Density Interconnects (UHDI). Discover the nuances of electronics manufacturing in China, where resources seamlessly integrate into the supply chain, contrasted with Mexico's DIY approach and India's promising advancements fueled by resolutions and government backing, ultimately surpassing Mexico in certain aspects.

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Resources:

• Connect with Gene Weiner on LinkedIn
• Listen to our last OnTrack episode with Gene Weiner, "PCB Manufacturing, Then and Now"
• Learn more abotu Mexico's unique supply chain in this previous OnTrack episode

Key Highlights:

• Insights into Trade and Manufacturing in Mexico: Delve into the intricate details of Mexico's manufacturing landscape, exploring the unique challenges and opportunities in this key region.
• Exploring Broader Trends in India: Gain a comprehensive understanding of the evolving trends shaping the electronics manufacturing sector in India, highlighting key developments and advancements.
• Comparing India's Model to Chinese and Mexican Approaches: Analyze the positioning of India in the global manufacturing landscape, drawing parallels and distinctions between the Chinese and Mexican models.
• Unraveling the Challenges Faced by Chinese PCB Countries: Investigate the factors contributing to the challenges faced by Chinese PCB countries and the implications for the broader electronics manufacturing industry.
• Insights into M&A Activity and Future Trends: Explore the dynamics of mergers and acquisitions in the electronics manufacturing services (EMS) sector, with a forward-looking perspective on continued consolidation and vertical integration in the industry.

Transcript

Zach Peterson: Hello everyone, and welcome to the Altium OnTrack podcast. I'm your host, Zach Peterson. Today, we're talking again with Gene Weiner, president of Weiner International Associates. Last year, 2023, was a great year and there was so much going on and we're here to wrap it up with Gene and look forward to 2024. Gene, thank you so much for being here today.

Gene Weiner: Oh, it's a pleasure to speak to you again, Zach.

Zach Peterson: Yes, always a pleasure to, of course, see you in person at conferences and then have you on a podcast episode.

Gene Weiner: No, no, it's always great to join you and discuss the events of the past year and try to second guess the next year.

Zach Peterson: Yeah, yeah, it's always fun to predict what's gonna happen. There were some huge developments in 2023. I think generally, if you look at the macro environment for business and manufacturing, but also with electronics manufacturing specifically. So I think we could just jump right in to some of these three biggest areas that I saw in 2023. One of these areas that we spoke about the last time you were on the podcast was trade with Mexico and the growth of manufacturing capacity with Mexico. And I think one of the biggest news stories of the last year was that trade with Mexico actually surpassed trade with China. What do you make of all this and how does this influence the business investment landscape, especially with respect to electronics manufacturing capacity overseas or near short?

Gene Weiner: Well, it's really very complicated. First of all, the China Plus One thing, it goes beyond just making a print circuit board that talks about assembly, it talks about packaging and what have you. And in my personal experience, a company with which I've been associated with in Queretaro, is actually in the process of doubling its EMS factory because of the business there. And Mexico is under the new treaty that was set up under the former president. It makes it very attractive. What's unattractive is the lack of water for their board manufacturing, but what is attractive of all the universities and trained people proximity and the treaty, but again, what's unattractive of other cartels and their behavior, but between Guadalajara and Queretaro, which is the Mexican equivalent of an international manufacturing center for aerospace with museums and another five universities and 2 million people and an international airport, it opens up another opportunity. But at the same time, India is rising again, which has failed because of lack of infrastructure. And what have not, the IPC has been putting a lot of effort in there. There were a lot of people from India and that part of the world at Prototronica. And just this past couple of days, I think the EMS took a big rise getting over the hump when Lenovo decided to give a contract to one of the subsidiaries of Dixon under a government sponsored program to build and assemble their notebook computers there. And this might just be the thing to push that one over the edge too. I look for continued increases in Mexico and as well as India. I just got a report from friends that went to the HKPCA show from colleagues they held this past week. And they say the printed circuit fabrication part had shrunk considerably. It was just one hall, much the same as they've done in the United States and as it had done in Prototronica. But at the same time, it said there was a lot of conversation that maybe it had gone and been taken over by the CPCA show in Shanghai. Further, there were virtually no new Western countries exhibiting there. I've noticed that the halls are empty in the printed circuit part and there are very few Westerners seen throughout the show. So we see a continual shift in the China plus one thing due to the geopolitical situation. That's the political part and the business part but there are also technical aspects to these discussions.

Zach Peterson: Yeah, going back to India for just a moment, I saw the same news story that you did about Dixon and notebook computer manufacturing. One thing to note about India is that they're not only doing things for Dixon, right? I mean, Apple has factories there. I think Foxconn has moved into India. So this is part of a broader trend that I think those of us in the US are not fully aware of because I think a lot of people are looking to Mexico because it is so close and because of some of the other advantages that you highlighted.

Gene Weiner: That's very true. But India had suffered from a past reputation going back decades ago to this prior form of its economy. Then they shifted to a more capitalistic form. And there's been a much like China in the early days has been a lot of low level graft situations that had to be overcome which are just now being put to bed with finality, I think. So India is becoming more attractive especially for the Eurasian markets. We have to look at China Plus One.

Zach Peterson: Another thing about Mexico, which is something I just noticed today from one of our former podcast guests, Andrew Hoopert, he provided a really interesting comparison between working in Mexico and working in China. If you go and you work in China, they're more than happy to commit all their resources to help you figure out all those parts of your supply chain that you aren't able to handle yourself. Whereas Mexico is much more DIY. You have to show up with a complete plan and they don't wanna hold your hand through that production process or through that sourcing process. How does it work in India?

Gene Weiner: India has passed some new resolutions and some new laws and aids from the government that will do all they can to help foreign companies establish it better than Mexico, I think. I think the location thing is a difference. Also in India, we have a high level of education from virtually all the way through the country. We have a lot of good mathematicians and physicists, just the type of guys we need for the assembly or design part. In fact, we've been using designers over there for the last two decades. So it's a ready-made situation once the infrastructure issues get resolved, I think. And there are still infrastructure issues, but there are new centers cropping up that are getting pretty good. And these are being better managed now. I think India has a good future, the role to play. And it's gonna be, it's hard to say, India, China, and the rest of the world, how it's gonna work out. But we have to look at sustainability. What would we consider sustainable in the future?

Zach Peterson: Sure, I think that makes sense.

Gene Weiner: By the way, a lot of companies in China 'cause they're suffering very much right now, financially, in our industry.

Zach Peterson: Is that entirely due to China Plus One? Is that kind of self-inflicted by the Chinese government? What's creating that issue?

Gene Weiner: I think what's creating the issue has been the Western world cutting China off on what they consider security matters, software issues, reverse engineering, and so forth. And I've always considered from the early days, I said the first time I went there right after the Nixon Accords was China's interesting. They're 50 years behind us. They're gonna catch us in 2030 or so. And they're a friend. They're not a friend. They're a competitor. They're a supplier. They're a customer. And they're a potential enemy. How do you balance it? And that's the situation today.

Zach Peterson: Yeah, I think we're all seeing that play out on the news every night, for sure. One other thing that's been pretty prominent over this past year, especially if you pay attention to some of the industry newsletters is the level of M&A activity. M&A, I think more broadly has kind of fallen off for several different reasons. I think some of it happened in 2022, just kind of after the SPAC bubble basically burst. But we've started to see some consolidation, at least in the EMS arena, as far as companies buying each other or merging. What have you been seeing as far as M&A activity?

Gene Weiner: Oh, well, first of all, we're gonna see more vertical integration. That's part of the merging part. The EMS consolidation reminded me of the situation with the automotive industry. Do you realize that at one time in the Western world and in the United States, there were nearly 2,000 automobile manufacturers? And how many were there? There were at one time approximately 2,000 printed circuit fabrication shops. Now it's fewer than probably around 150, give or take 10 in the US. We're seeing the same thing in EMS? Possibly. The cost of setting up as we move to finer and finer things to micro BGA assembly and so forth are getting greater. We need faster machines. We need more precision. The greater cost of artificial intelligence is gonna drive some of this, but we still have to build the large enough databases to make it fully effective. I think we're gonna see a continued M&A activity, continued consolidation for at least the next three or four years.

Zach Peterson: Yeah, I've noticed that as we get closer and closer to just doing packaging outright, it makes sense that this would be happening because the level of capital input required is just much greater. And so it's harder and harder for a mom and pop shop to set up and just start manufacturing things, especially if they wanna work in some of those more advanced, more high value areas, which frankly is where I think the American printed circuit board shop needs to operate if they're gonna stay competitive on a global level.

Gene Weiner: Well, we have a great example of that with TTM, with Calumet, with American Standard Circuits, who are spending tens of millions of dollars to set up or expand facilities just for ultra high density interconnects, which are needed for very fine line things, for artificial intelligence boards, for military and for medical.

Zach Peterson: Yeah, TTM is a very well-known name. And I just wonder how many of the current older guard of printed circuit board shops are going to consolidate to the level where they're really becoming a TTM status. Are we gonna see more of those TTMs in the US that are really heavily AI automation driven?

Gene Weiner: There are only so many with the firepower or resources or financial support that will be able to afford to do this. So the answer is several more will be mergers. They'll have greater capital capabilities and be able to invest in it. So there won't be that many more. I don't see a thousand shops doing out of 500. I do see maybe a dozen or two more major ones as a result of partnering. We're gonna have to see the new partnering also. This is part of it. We're gonna have to sit in this. The OEMs are gonna have to step back up to the plate again 'cause the EMS companies don't have enough money to do research and development. Their margins aren't that great except for a few exceptions. So we're gonna have to see more partnering. We're gonna have to see more vertical integration. We're gonna have to see a complete supply chain link all the way down from materials and process all the way back up to the OEM and final test 'cause testing these things is not easy either.

Zach Peterson: Yeah, that's a great point. I mean, once you start getting into really high volume with high yield, you start to have this whole other quality control aspect that I don't wanna say it's totally out the window with rapid prototyping, but it's certainly not priority number one. They care more about speed, on-time delivery. If you want it in 24 hours, you can get it. Whereas if you're TTM, you're focused on what? 99.99% of boards being right the first time, minimizing rework, those kinds of things.

Gene Weiner: We're not quite there with UHD or substrates yet, but as a designer, you know that if a designer doesn't know what's capable in the shop, if he doesn't talk to the guy that's gonna manufacture it in volume, but just to the prototype shop, by the time the hammer hits the anvil, it's too late. You gotta get everybody involved very early, from designer all the way up to final production, materials, process, chemicals, and test.

- Yeah, I agree. The DFM for volume production is this whole other world from a lot of the ways that we talk about DFM, especially when we look at what the prototyping shop can do versus what you're trying to do when you're trying to manufacture a million units a year.

Gene Weiner: It's a great, interesting world. I guess I wish I was 30 years old again with the challenges that are being faced by the young engineers today.

Zach Peterson: Yeah, yeah, definitely. And speaking of some of the challenges I think younger engineers are facing today and probably going to be facing in the near future is UHDI and substrates. This has come back to be a really prominent part of discussion for what we do with PCBs, especially after the passage of the CHIPS Act. I think after the CHIPS Act passed, folks in Washington probably said, "Hey, job done." Whereas the rest of us who actually design this stuff realized, well, you haven't really solved any problems if you aren't also creating substrates and packaging locally. So that then led to the discussion of UHDI and substrate design and things like this.

Gene Weiner:  That can be a discussion that can last a few weeks. There's a lot going on in that. USPAE awarded some money, as you know, about $10 million to a number of companies, none of whom are recognized in the printed circuit side of the industry, they're all in the microelectronics. So I decided to take a poll last week with people there from the semiconductor side, from the packaging side, from the material side, from the process side, from the joining side, from the solder side, everything you can think of, including the design and standards, at least one from Asia through the US to Europe. And I'm just getting the results in.

Zach Peterson: Okay.

Gene Weiner: One of them, but it's interesting, no two were the same. I asked to define the challenges and differences between UHDI and an organic substrate for semiconductor packaging, no two were the same. And so we're getting more involved with that. So it's still evolving. The primary difference I see other than resolution and registration and resolution, UHDI will say it's down to 15 micron or six tenths of a mil line and with a slightly larger space and semiconductor packaging, the organic substrates will go fine or maybe even down to six micron line and space with dry film resist exposure with a direct imaging. And below that, they'll probably have to use a liquid photoresist, a positive working 'cause you can't use a negative working 'cause it's an oxidizable film and it won't be steady. And work is being done on that by Fraunhofer and some other companies. But we already have a couple of large shops invested in and doing this. We have others preparing to do this. There are now seminars and workshops and programs being set up by everybody that has their toe in the water from the SMTA seminar that's coming up in February conference in February in the San Jose area, I believe on ultra high density interconnect to a panel I'm gonna appear on with more of the printed circuit guy side. By the way, the first one is gonna have KLA and semiconductor people and so forth. What I'm gonna do is more from the printed circuit side except for KLA and someone from defense. There'll be Mike Fenton, everyone knows that's one of the originators of one of the semi additive processes. There'll be someone there from KLA. So these are revolving and it's gonna be interesting to see how it shakes out. But there's interest everywhere. By the way, AT&S has just committed a large amount of money to set up a high densities facility in Austria. Tens of millions of dollars going there too. So it's not just the US.

Zach Peterson: Yeah, and all of this is really being driven by just the need to onshore really the most critical parts, highest value parts, let's say, of the supply chain and really create something more of a local ecosystem where people can source the board, the substrates, everything they need to build an entire system from scratch.

Gene Weiner: Well, let's set aside the military, the defense, let's set aside the medical. One of the biggest drivers that everybody's trying to get into the market early on is AI and the boards required for AI. Ultra high density materials and circuits are usually more reliable. They're faster. They have a greater challenge with heat dissipation and component size and placement, but it's a better product. And in many cases, it's not more expensive. It effectively could be less expensive. But then we get into how is the thing gonna be built? Is it good? What is the registration issue gonna be for these super fine line things and so forth? Does it have to be semi additive or additive to hold the registration? 'Cause once you go to lamination and subtractive or processes, you get too much material movement. There's also a need for newer materials that are more stable for high frequency, lower loss, as well as a surface condition of the metal for high frequency. There's all types of new challenges for designers, which will drive AI, which will drive the need for more of these boards, unless you think otherwise as a designer.

Zach Peterson: No, I would agree. I mean, data center infrastructure is always, it's an evergreen thing, right? I mean, everything we do is digitally mediated. So of course there's gonna be demand for those types of boards, but I think AI has kicked everything into overdrive. And this is like one of the one areas that everybody forgets about. Everybody's focused on the semiconductors naturally, but as we all know, without a board that is precisely engineered to accommodate that chip, the chip is kind of meaningless. And so everybody totally forgets about the packaging and the circuit board that it's gonna live on.

Gene Weiner: Well, the challenges for AI and the designs that there are really enormous because it's gonna require processes that most printed circuit shops in the US are unfamiliar with. And also it's gonna bring up, the digital twin is a necessity of my mind for that. You're just not gonna design these circuits without that and using your AI there. You're gonna use AI to create boards for AI, so to speak.

Zach Peterson: Given that that is the case, and I think there are enough people around who realize that is the case and they understand the supply chain challenges, will we ever get back to an era where the company's building these very advanced semiconductors are ever gonna take the approach of having a captive operation for fully packaging the chips, building the boards, or is this gonna just continue to be outsourced and we really haven't overturned the status quo of the last 20 to 30 years?

Gene Weiner: Intel is putting a lot of bucks into making the full package, not the board, for the boards with a glass substrate. They've committed to it. They've got a lot of packages there. A friend of mine from Taiwan, that's an independent consultant, has also designed a new type of interposer or carrier other than silicon carbide that will help the heat dissipation that's required for putting chipwood stout on high density. The board part is always gonna be the board part. I don't think that many people are gonna get into that except for Intel and Glass and their TSMC is doing some work on going through the packaging itself using both organic as well as inorganic substrates. But the vast majority of companies will be buying the chips from TSMC, Samsung, or Intel or Qualcomm, the packages, and they're gonna have to get the board somewhere. And for sustainability, they want the boards built in a safe area that's close by, which might be Mexico, the United States, Canada, or Europe. And by the way, one of the things I learned in my trip to Productronica, that was an interesting trip, was that Europe is down to 2% of the world's production where once it had 20% for Europe of the world's bare board production and assembly.

Zach Peterson: That's even worse than the decline in the US.

Gene Weiner: Oh, US is at about 4%.

Zach Peterson: Right, right, exactly, yeah.

Gene Weiner: And these are astounding numbers. And so recovery is great, but it also shows a great opportunity to go from 2% or 4% back to 10% or 20%.

Gene Weiner: So, when these numbers start getting thrown around, I always like to ask the person who's quoting the numbers, what is objectively the right market share for the US or for Europe in terms of printed circuit board manufacturing, right? And the comment I always bring up is that, the market decided that 50% US market share was too much, but now we've clearly all agreed that 4% is too little. So, where do we meet in the middle?

Gene Weiner: Well, there were two things at play there. One is necessity for defensive medical, and the other is incentive for a businessman to invest money to build it in a location. To properly, in the US from what I have been able to find out or discover or agree with, you would require roughly enough incentive to bring it up to 20% to be profitable for those guys that are gonna be long-term players. Defense and medical probably could get it up to 10 or 12%, but then we have communication, 6G coming up, which are gonna require things like AI and so forth. So, the target would probably be around 20%, although I'm not an economist, I do follow other people's numbers. In Europe, the number would probably be closer to 10 or 12%. Less than that, who's gonna pay for it? You don't go into business to lose money, I don't know. Business is not supposed to be a charity. In a socialist country, it's a government business, but we see what happens when the government runs everything in countries such as China and so forth. Which brings up another thing. Vietnam is a socialist communist country, they're doing great. Largely because of the business they're getting from the Western world, including the United States.

Zach Peterson: Sure, yeah, I mean, I agree it's not the case that just one form of government is gonna dictate the outcome, but yeah, I think that's part of, that's one company or sorry, that's one country that we kind of gloss over sometimes, but they really have been beneficiaries of kind of this China Plus One supply chain strategy that a lot of companies are implementing.

Gene Weiner: But what does Vietnam have? They have desire, they have education, they have a strong work ethic and a strong workforce, but there are only so many of them. It's a small country that can only handle so much. So then we see a new joint venture between a major Chinese company and a major Thai company from Thailand to try to bring advanced manufacturing technology of printed circuit boards to Thailand, which is a major growing printed circuit fabrication area, but not high tech.

Zach Peterson: So companies really have much more options. They can go and get their lower tech, simpler boards from let's say Thailand, Vietnam. They can do maybe they're more advanced or more IP sensitive boards in let's say Mexico. And for anything where they're still in development, they can get plenty of rapid prototyping capacity here in the US or maybe if they're in Europe, they can do it in Europe.

Gene Weiner:  Don't leave Taiwan out. They're a leader in technology and everything. And they have a lot of capacity.

Zach Peterson: That's fair. I do tend to leave Taiwan out and I don't mean to.

Zach Peterson: Especially with chips and packaging.

Zach Peterson:That's true, that's true. And one thing regarding chips and packaging that I thought might become a bit of a driver, at least in the near term, was the growth in chiplets and possibly even the creation of like a chiplet marketplace. And we just really have not seen that kind of thing at all. I mean, there's foundry capacity, but you don't have like a digikey for chiplets or anything like that. You know, that's gonna then encourage more-

Gene Weiner: I believe it's coming. We just need the ability to build the substrates for mounting them and packaging them.

Zach Peterson: Got it, got it. Okay, so that gets back to needing more UHDI capacity and not just capacity, but capacity at scale.

Gene Weiner:  Well, that talks about gaining traction and the market ramp up. One of the things I noticed at Productronica was that after a mere 15 years or so of trying to get solder masks accepted as a viable process for inkjet application, via inkjet application, suddenly it's accepted everywhere and everybody had a system or a solder mask and they're all now trying to show the advantages of their system over the other as opposed to whether or not it's a viable process. It was the longest ramp up I've seen in our industry that succeeded.

Zach Peterson: Yeah, it seems like once the ball starts rolling downhill, everybody jumps on board and they feel they have to do it.

Gene Weiner: But it was a very gentle slope on this one and a long hill.

Zach Peterson: Yeah, that's fair, that's fair. I mean, like with the shift to lead-free, I think that was one of the recent big shifts in the industry. Joseph Feldstad kind of made that same comment. He had said, once the ball starts rolling downhill, everybody just jumps on 'cause I think there's an element of FOMO, as they say in financial circles or fear of missing out.

Gene Weiner: Yeah, Joseph thinks he may have finally found a key to get more people interested in the OKMR modification of that process, the OCCAM process of his facadeless packaging where it applies.

Zach Peterson: Yeah, yeah, yeah. And in fact, we need to have him back on here to discuss some of that 'cause I was so interested in that process.

Gene Weiner: Well, he's a fascinating, creative guy.

Zach Peterson: Yeah, yeah, he is. I always like talking to him. So shifting back to UHDI for just a moment, one area of UHDI and I think goes back to volume manufacturing that a lot of designers don't think about is quality control and cleanliness. What are some of the cleanliness needs in UHDI and how does that affect the quality control process that companies have to implement if they want to start ordering and manufacturing this stuff?

Gene Weiner: If you have a hair or dust or anything like that in the shop, your yield is gonna be atrocious. The cleanliness issue is great. There are a number of people that have solved it or working on it. America's Standard Circuits has apparently found a way to get it out with reasonable yields, whatever they are. And Anaya Varger is gonna be on that panel with me in March and be interesting to see how he handles that. We know that TTM in Syracuse, New York is gonna put 40, $50 million in for a super clean system. AT&S's system is super clean, but for yields to get 15 micron lines and 20 micron spaces or so in Austria. So the needs are different, the requirements are different. You really need a class 100 and class 1000 operating area for both machinery and the rooms for where the processing is done. Otherwise, you're just not gonna pick this up. If you go into a printed circuit shop that does two, four, double-sided stuff, a four, six, eight, 10 layer with a large line in space of 10 mils, which used to be the goal in the modern days and the old 4400 computer board was thought to be difficult with that type of resolution. You cannot do it in that kind of shop anymore. You have to have it clean. You have to have a clean exposure system. You have to go to direct imaging, which is more expensive. You're going to need laser drills, which are more expensive. You can't go mechanical below six mil holes, say, for example, maybe a little better, but it's gotta be super clean. And I would think that there are probably areas where machines may be encapsulated in class 100 systems, tunnels, and where the rooms may be class 1000 for processing and handling in some cases. That's just my opinion. I'm not an expert. That's only what I've been through.

Zach Peterson: This is interesting because, it seems like we're just in this constant lag with what they do in semiconductors, right? The cleanliness issues with semiconductors were figured out so long ago. And it always seems like whenever the printed circuit board world shifts to a new paradigm or a more advanced type of system, we have to catch up to them or even reinvent the wheel. If you think about recently in 2019 with the microvia reliability issues and the microvia reliability warning, the packaging guys figured all that stuff out way before any of us in PCB world figured it out. And now we're having to deal with cleanliness issues.

Gene Weiner: But we haven't had to do that. Here's a printed circuit board, eight and a half by 11. I maybe have six up on here or eight up on there. I have a here across here, you have one X up, the rest is still good. This is a UHDI board. A here across here may knock out eight or 10 circuits, not one. It's different. A particle in a four mil hole or a three mil hole could prevent it from being filled or carrying a conductor or blocked. A particle in a 32 mil hole or an eight to 15 mil hole, which is typical, plate it to maybe 13 or 14 mils. Doesn't matter, you bridge it, you plate right over it. It's a different world.

Zach Peterson: Yeah, these are all good points. I mean, I guess maybe we had the same cleanliness issues earlier, we just didn't notice it. That's what I'm hearing from you right now.

Gene Weiner: Well, if you look at a copper plating tank, look at the systems used for copper plating in the semiconductor world, how clean and pure they are and go into any printed circuit shop and look around the copper plating system, the copper sulfate plating system. They're just the stuff in the year around those tanks would be enough to wipe out a UHDI board.

Zach Peterson: Yeah, yeah, okay. This then requires some new level of investment, I guess, in order to really get these shops to the level where they can fabricate UHDI and substrates and do it in a way where they have yield that is attractive to any customer.

Gene Weiner: Yeah, that's part of the cost of the newer systems is the cleanliness, the waste treatment, the filtration, the controls, the printing, the whole formation, the additive systems. It's gotta be clean. All right, say you get a $2,000 board here with a couple of thousand dollars in components on it and it gets wiped out because you got somebody's hair in there, please, can't do it.

Zach Peterson: Yeah, that's totally understandable. So are there any advancements going on in cleaning aside from just bigger and better clean rooms in some of these facilities?

Gene Weiner:There are advances being going on. Everybody's working on improvement. There are already proven systems in some facilities such as Chippewa Falls of TTM, and American Standard Circuits and others. As of course, all the guys in Taiwan and Japan. The Chuo Meiban in Japan, for example. They've automated a total high density line with liquid photoresist, recently reported by one of our friends.

Zach Peterson: When you say automated the line, it sounds like, when you say that, it sounds like they've automated everything, not just cleanliness and inspection.

Gene Weiner: Automated the handling of the board all the way through photoresist, coating, cleaning, coating, exposure, develop all the way out to no one touches it.

Zach Peterson: That's incredible because the last time I was in a PCB shop taking a tour, I mean, it wasn't that long ago. There were a lot of people handling stuff. I mean, you got the machines and a lot of those processing steps are automated, but still from point to point along the process, you have people picking stuff up and handling it and moving it, doing whatever they have to do to move things along through the process. And this is a shop that you could consider to be a bit at the more advanced edge of what we have here in the US.

Gene Weiner: I think the change started with some of the newer shops going into Andover, Massachusetts, up New Hampshire, Moscow, Idaho, with greater degrees of automation. If you look what Alex Topinski did with his first two shops up in Charleston, New Hampshire before he left, that whole shop, the first one ran on 17 people. The whole facility.

Zach Peterson: How much volume were they doing?

Gene Weiner: And most of them were controlled and use of robotics and smart handling of materials. We see a continuation of this. We see great advances of this, not only in Japan, but in Taiwan and the people that have copied them and reverse engineered them across the Formosa Straits and elsewhere. And we saw a lot of robotics over, improvements in robotics, I should say, in prototrautica and the ways it handled materials without damaging them from the edge or air carriers or positioning and so forth. There was a one system by Pluritech Italia, for example, that took a multilayer laminated, indexed it, removed the flash, x-rayed it, drilled it, trimmed it again, beveled the edges and took it out the end, nobody touched it. The panels were just loaded and went right all the way through. This was a running in their booth, demonstrating it.

Zach Peterson: That's always so cool to see that stuff live. I'm kind of a gearhead at heart and have always been. I mean, obviously I work in the hardware world, so I love seeing that kind of stuff.

Gene Weiner: Well, this was advances in consolidation, not new technology. This company took known processes and equipment and procedures and was able to lace it together. Then of course, you're using the new software that's available that allows all the machines to talk to each other. They learn from each other, they're self-learning with the AI, they improve and they get better and better. And it allows this type of advance. Which brings up another thing. We get it, I don't see how we're going to get into UHDI business using Gerbers.

Zach Peterson: Oh, yeah. Yeah, I 100% agree.

Gene Weiner: But still 80, 90% of people still use it. Good Lord.

Zach Peterson: I know, I know. In fact, since you mentioned a poll earlier, I should probably do a poll myself and just see what people prefer to use.

Gene Weiner: Yeah, you're gonna use either the IPC 2581 or you're gonna use the other one from Germany.

Zach Peterson:You know, I'm at the point where I just export all three of them and just say, here you go, pick what you wanna use.

Gene Weiner: Well, if you say, let's go. Recently on LinkedIn, they showed a board put together using AI and ODB++ and digital twins and everything. And it took a long time. I said, you think it took a long time because it took a month. If you're using Gerber, you'd be there for three years and still not have it.

Zach Peterson: Yeah, I know because everything is separate and all these different files and different formats. And it's almost like you have to do a bunch of machine learning just to infer even what the files are trying to tell the machine. ODB++ and then IPC 2581 probably speeds all that up significantly.

Gene Weiner: It's because people don't like changing the comfortable doing what they're doing. That's like you went into these printed circuit shops, which even with the modern UCE equipment built in China for enclosed plating systems are not enough for ultra high density.

Zach Peterson: Yeah, that's a great point. Well, Gene, we're getting to the end of our session here, but I think we should wrap it up by just asking you, what are some of the biggest developments you expect this year in 2024? Put on your magic predictor hat here and tell us what you expect to see.

Gene Weiner: Biggest developments I expect would be the establishment in the Western world, in Western Europe and in the United States, several organic substrate and inorganic substrate and interposer operations over the next two years with American companies and Taiwan companies based off European companies. Second, I expect to see an increased use of European equipment in the United States as opposed to Chinese equipment and also American equipment for fabrication and assembly development. And the third, I expect to see Japanese companies which never wanted to sell to the Western world, which have very advanced machines for assembly, for speed, for registration, for pick and place, for laying down solder paste and inspection AOI, continue to improve in their systems and really go after the Western world market and put perhaps even going more direct in the US. I expect to see a lot more from Japan. We always see Japanese stuff here. We see Fuji, we see Yamaha motor and so forth, but we're gonna see more of that. We're gonna see more advanced stuff. And I also expect to see, believe it or not, Ko Young continue to bring up developments that will help with the ultra high density thing that South Korea. And so we're gonna see some better instances of being able to properly identify, measure and locate and place solder paste and solder droplets on micro devices. This is still a challenge right now.

Zach Peterson: Interesting, interesting. Okay, well, as all of this stuff happens, of course, we would love to have you back to discuss some of these developments and let's see if they've come true by the time we hit 2025.

Gene Weiner: Same time next year.

Zach Peterson: It sounds great. Gene, thank you so much for being with us today.

Gene Weiner: You always wonder how many of these things will really come about. And actually, I've been pretty lucky. Most of them that I've predicted have come about. Some have just taken a few decades longer than I thought.

Zach Peterson: Oh yeah, for sure. And before we sign off, just really quickly, tell us when that SMTA panel is happening and where it's gonna be.

Gene Weiner: There were two, I just put them down here. There is a UHDI conference March 26 at the Rio Vista Recreation Center put on by the SMTA in Peoria, Arizona, which is noted because that's where Amcor is putting their new property. And there's another packaging company just bought 25 acres there next to the 50 acres of Amcor. So that will be there. There was an announcement if you go to the SMTA site of the January or February conference in San Jose, let me just see if I have a note on that. I may or may not. I do not, but that's a major one. Look at the SMTA and anyone that's interested can find it. That's a very high tech thing. That's more from the semiconductor side down where the SMTA is the bottom side up, which is where I'm coming from.

Zach Peterson: Okay, well, anyone that's interested in that, we will have all that information in the show notes and you can go and learn more. Gene, thanks so much for being with us today. This has been a lot of fun.

Gene Weiner: It's always fun. It's always a pleasure talking to you.

Zach Peterson: Thank you so much.

Gene Weiner: Have a Merry Christmas and a Happy New Year.

Zach Peterson: Absolutely, you too. To everyone that's out there listening, we've been talking with Gene Weiner, president of Weiner International Associates. Make sure to hit the like button and subscribe button on YouTube. You'll be able to keep up with all of our podcast episodes and tutorials as they come out. Make sure to check out the show notes. You'll find some information on the SMTA panels. And last but not least, don't stop learning, stay OnTrack and we'll see you next time. Thanks everybody.