The Route
Several notable colleges are undergoing crises on their campus as students, faculties and administrations wrestle with how – or even whether – to respond to events taking place far from home, in particular in the Middle East.
The ongoing protests on college campuses have brought to light many conflicting points of view, and generated tremendous reaction well outside the sphere of the student bubble. It’s not necessary to recap all the outrage and countermeasures here. But there are obvious business implications that, in my opinion, merit some consideration.
Near the end of April, we welcomed Audrey McGuckin back to the PCB Chat podcast. McGuckin spent 22 years with Jabil in a variety of roles culminating as vice president and chief talent officer, and has experience living and working all over the world: Singapore, China, Taiwan, Japan, Germany, France, and Spain as well as the US, where she has called home for the past 25 years. Her eponymously named consulting group offers advice on strategy, operations, and human resources to executives across a variety of industries, including many in companies in the electronics supply chain.
Are the days of the mega-merger over, or are we just about to experience a new wave?
A good case could be made for either. Which we should root for is another matter.
In Europe, GPV’s merger with its slightly larger competitor Enics in late 2022 created a $1.5 billion entity, sending the combined entity barreling up the CIRCUITS ASSEMBLY Top 50 list. Then consider Kontron and Katec, another rollup that now exceeds a billion dollars plus in sales. When it comes to M&A, Europe at least seems to have it “going on.”
Asia isn’t playing second fiddle. China Electronics Corp., one of the mainland’s largest entities, helps underwrite Nanjing Huadong Electronics, which bought top 15 EMS company TPV Technology in a reverse merger in 2021. TPV’s annual revenues are in the $7.5 billion range. That’s serious cabbage.
The masses are atwitter over the recently announced Renesas acquisition of Altium, and for good reason. The $5.9 billion price tag is some real coin.
What’s less clear to almost everyone outside the two companies, however, is the underlying strategy and how the merged entity will look going forward.
In announcing the acquisition, Renesas chief executive Hidetoshi Shibata called it “an important first step into our long-term future.” But what is that future?
Obviously, Renesas is not going to take Altium private, for exclusive use by its own customers. The two firms do have many overlapping markets: IoT, consumer, automotive, among others. Renesas also plays in higher-end areas such as high-performance computing that Altium has not to our knowledge penetrated. If OEMs want one-stop shopping for a systems program, a combined Renesas-Altium starts to make some sense. But the latter lacks the chip package tool to complete the proverbial – and literal – circuit.
If you have a child in Mrs. Dollas' eighth-grade class at the Rupert A. Nock Middle School in Newburyport, MA, odds are you are probably pretty steamed with me right now.
For those who aren't up to speed, here's why.
On a cold winter day in mid-January, I addressed her students about careers in electronics. About 20 teens gathered for the school's ongoing career exploration series (which as an aside, is a wonderful concept that all middle schools should adopt). I was invited to speak about my own career, but I quickly pivoted to the possibilities in tech that don't involve creating an app.
After asking for a show of hands from those who have been scolded by their folks for excessive video game playing – all of them – I then served them a counterargument: Play more!
My reason, I explained, is because video games – well, many of them – encourage students to use their imaginations. And while acknowledging their inherent addictiveness, I also believe they impart tremendous skills and subtle knowledge that will be useful to future generations of workers.
It was gratifying to see the throngs return for Productronica in November. To the tune of 42,000 visitors, the crowds showed up for the granddaddy of shows in the Western world. (Nepcon Japan is roughly twice as big.)
And there was plenty to see. One of the improvements that jumped out was the increase in speeds, especially on the assembly line. Machine speeds are rising at remarkable rates, with placement machines hitting their fastest speeds ever, even while many of them add multifunctional heads for more flexible line setups.
Yamaha’s YRM20 placement machine allows nonstop cart and feeder changes. Fuji’s AIMEXR SMT placement machine, for NPI runs, relies on linear motors for its fastest speeds yet. So what if the semiconductor market is predicted to rise by double-digits this year? These machines can take the pressure.
In November I was invited to join the “disruptors” of the industry – also known as Mark Goodwin and Gene Weiner – on a panel to discuss the derisking of the supply chain.
Against the backdrop of the biennial Productronica trade show, the largest of its kind for electronics manufacturing in the West, and hosted by my media colleague Trevor Galbraith, we attempted to delve into the issues at hand when it comes to ensuring supply chain resiliency.
As Goodwin, the chief operating officer of Ventec, correctly framed the situation, the vast majority of materials originate in Asia, particularly China, and while parts of the supply chain are being moved back to the West, a full-scale migration won’t happen in our lifetimes. Given that, what needs to happen at the margins to ensure at least a minimal degree of secure chains?
The role of government naturally came up, and it was suggested that legislators are driving reverse migration. I pushed back on that notion, opining instead that commercial businesses lead the way and governments are reacting both to the years-long industry impetus and the post-Covid realization that supply chains are not secure. (For more on that, see our interview with David Schild of the Printed Circuit Board Association of America in this issue.)
