Are You Prepared for Change?

charles-chuck-cox

C H A R L E S ‘ C H U C K ’ COX

China’s government has just approved a new 5-year plan as its central bank cut both interest rates and the reservere quirement ratio for banks, in a bid to revive slowing economic growth. Does your company have a 5-year plan? Do the key members of your supply chain have one? Is it shared with you? Does you belong to a trade association that has one which includes your company’s interests? Does your company participate in events that makes your needs known to your elected representatives? If not, you are allowing others to shape your future – or lack thereof.

Will we see the former c-level executives of Platform (MacDermid), Isola, OM Group, IBM Microelectronics, Alent, et al re-emerge? If so, a few will probably appear as Members of the Board or senior executives in operations seeking to grow in rapidly changing, difficult competitive global environments where new niches are cropping up. Others will migrate to the boards of smaller companies seeking to add a “big resume” to their boards. Few will go quietly and fade into the sunset.

As the worm turns

Hard on the heels of news that a Chinese company is buying Western Digital and loosening its restrictions on Western’s merging activities with a newly acquired Hitachi operation, we learn that Western Digital is buying SanDisk. I guess that means that China will soon own both industry leaders and have a firm grip on a major segment of the world’s memory business! My friend’s granddaughter in Arizona is now learning Mandarin in elementary school. I think that is a good thing.

Reshoring/repatriation of PCB fabrication from Asia to… Europe?

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China’s government has just approved a new 5-year plan as its central bank cut both interest rates and the reserve-requirement ratio for banks, in a bid to revive slowing economic growth.

They say that imitation is the sincerest form of flattery. As keynote speaker at the UK’s Institute of Circuit Technology Hayling Island Seminar last month Spirit Circuits MD Steve Driver gave a keynote speech on the Reindustrialization of Europe using his LED substrate business as an example. He said that his customers “wanted them cheap and quick.” He had been successfully using Chinese suppliers for years, but costs, especially freight, were an increasingly large part of his landed costs so he decided to source closer to home, but in a lower cost area than the UK. His search for a site wound up selecting Romania for a variety of reasons beyond just lower labor costs. He plans to have Europe’s first fully digital PCB factory (highly automated) operating there in 2017 – noting that “the Americans got there first,” referencing Whelen Engineering’s recent accomplishment in New Hampshire. Driver predicted a resurgence of captive shop PCB manufacturing due to this new, now proven, approach.

Trade associations are not immune to consolidation

SEMI announced that FlexTech Alliance has become the first SEMI Strategic (Association) Partner, a form of inter-industry cooperation. In this partnership, FlexTech will continue to pursue its mission of fostering the growth of the emerging flexible, hybrid and printed electronics industry as part of SEMI, the global industry association advancing the interests of the worldwide electronics supply chain.

Who will be second?

SEMI is strengthening its position in the flexible, hybrid and printed electronics sector by more directly engaging with a new set of companies and R&D organizations, and leveraging an experienced team dedicated to this emerging industry. FlexTech’s activities of R&D programs, the annual Flex Conference, workshops and webinars in the flexible electronics market expect to gain improved reach through SEMI’s global platforms. China’s Unisplendor agreed to pay $3.8 billion – a 30% premium – for 15% of hard drive maker Western Digital. Uniplendor is a subsidiary of Tsinghua Holdings which is controlled by the Chinese government. This past May the company bought a 51% stake in Hewlett- Packard’s Chinese server company H3C Technologies for $2.3 billion. The U.S. Committee on Foreign Investment has not yet approved the Western Digital deal. Note that Tsinghua had a failed bid on Micron Technology earlier this year.

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