The European PCB Industry’s Tactics for Survival
“When the going gets tough, the tough get going!” was the underlying theme of Giacomo Angeloni’s presentation at the EIPC Winter Conference in Amsterdam. Angeloni, head of R&D at Somacis in Italy and vice chairman of EIPC, went on with a hint of irony in his voice: “It’s very hard to predict a strategy for survival when you receive daily a war bulletin!” as he showed page after page of reports from the industry headlines–the deteriorating situations in China, Taiwan, Japan, the U.S. and Europe.
“The only chance is to work harder and try to conquer market niches–be aggressive with technology and innovation–the same strategy that saved us in 2001.”
He drew a parallel between the present situation and the parable of Joseph’s interpretation of Pharaoh’s dream, in which seven lean cows devoured seven fat cows. Seven “fat” years of prosperity would be followed by seven “lean” years of drought and desolation. Pharaoh put Joseph in charge of Egypt’s food supply, and Joseph ordered the people of Egypt to save part of their harvests during prosperous years, to be used for survival during the lean years to come.
So what are today’s Seven Lean Cows that might consume the prosperity of our industry? Global crisis, erosion of our market share, inadequate research and technology, failure to develop our human resources, a crippling European bureaucracy, quick-profit traders who threaten the stability and global credibility of our industry and a lack of common acts and communication problems.
Angeloni asked, “What can we do, what should we do, right now, to protect ourselves from letting these Seven Lean Cows bring about a catastrophic collapse of the European printed circuit board industry?” He explored the challenges, and described the positive actions being taken by Somacis to secure future prosperity, quoting Steve Williams of Plexus: “Survival is not mandatory.”
Reductions in costs and lead times were priorities. In Angeloni’s terms, “real lead time” was the interval between buying the materials and getting paid for the product.
Efficient energy management would contribute to strengthening competitiveness, and the SurfEnergy project, in which EIPC is a partner, would increase manufacturing companies’ awareness of the benefits of energy management systems.
Innovative technology and value-added services are key to Somacis’ strategy. Somacis has established capabilities to manufacture embedded capacitors, embedded optical waveguides and coaxial tracks. Current product mix is 3% double-sided, 27% standard multilayer, 51% high-tech (high layer-count, SBU, laser), 15% prototype and 4% special materials. Turnaround times were from 48 hours for prototypes to 4-6 weeks for volume production. And Somacis is qualified to IS0 9001:2000, 9100:2003, 13485:2004, 14001:2004 and TS 16949, UL E79889, E211432 and E315722 and Nadcap AS7003.
The company’s new emphasis is on fast prototyping and production in the high-technology market, with substantial investment focused on the technical enhancement of their Castelfidardo factory in Central Eastern Italy, and the establishment of a new 15 million Euro factory in Manfredonia in the Southeast, with the capability to produce the most complex rigid boards and prototype chip packages on very short lead times.
Furthermore, Somacis continues to invest in its Chinese operations with the primary objective of increasing their presence as a domestic supplier of medium-high technology PCBs, rather than producing at low cost for import into Europe.
The company is exploring merger and acquisition opportunities in the U.S., particularly in Silicon Valley and the Boston area, and in Europe and possibly Japan. The turnover of Somacis PCB Industries reached approximately 100 million Euro in 2007, and it was expected that the share of revenues generated abroad would reach 50% by 2011.
Against an industry backdrop of pessimism and negativity, Angeloni’s presentation was inspirational. It was heartening to learn that a European company is determined to meet the challenges head-on, and drive into the future through an integrated strategy of cost reduction, innovation and globalisation.
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