Dissecting the IPC Regional Survey on PCB Technology Trends
Sharon Starr, Denny Fritz, and Mike Carano share their takeaways and regional insights with the I-Connect007 editorial team based on the global 2018 IPC Technology Trends Report.
Nolan Johnson: IPC released the 2018 edition of the PCB Technology Trends Report in January 2019. Could you give us an overview of the size of the survey, how the study was conducted, and the general findings?
Sharon Starr: We’ve conducted this study every two years since 2012. This study looks at the current state of technology measurements and how the industry believes it will change in the next five years. We conducted this study in mid-2018. We had 74 companies worldwide that participated, including 52 electronics OEMs that gave us data about their use of emerging technologies and their technical requirements for PCBs, both currently and their predictions for 2023.
We conducted a separate survey with 22 PCB fabricators from all regions worldwide. They reported on technology issues in PCB fabrication and technical capabilities along with their predictions five years out. The results give us some insight into the current state of PCB fabricators’ abilities to meet OEMs’ requirements, and how these capabilities will need to evolve over the next five years.
Denny Fritz and Mike Carano were the technical advisors on this project. They helped us to identify the issues to study, formulate questions, and interpret the results. They had a big role in this, and I thank them very much for that.
Johnson: Let’s talk a bit about Denny’s recent blog regarding regional differences. Those of us who are industry insiders have some preconceived notions on regional strengths, but the report seems to indicate that’s not as clear cut. What did you find in the report that pointed you in that direction?
Denny Fritz: I had done some synthesis of the data, which is all in the report. I laid out a PowerPoint presentation of the differences between North America, Europe, Asia, etc. That was a particular interest to me with my background of working for the U.S. Department of Defense, trying to see how much of a difference there was between domestic manufacture versus what was happening overseas. I prepared that for Mike Carano before he did the buzz session at IPC APEX EXPO 2019 when we released the study, and he included some of my conclusions in his presentation. Later on, for the blog that was published, I went back through the results and pulled out regional differences. Some things were not as different as what we’d thought. Again, it’s based on the data that we collected from this survey.
Johnson: Is it fair to say that historically, regional differences are starting to merge and become less distinct? And if so, in what particular areas?
Fritz: You must understand that this was a voluntary IPC survey; it’s not exactly a roadmap. Both Mike Carano and I have long experience with the IPC roadmap effort, which is discontinued now. The IPC technology survey and the IPC roadmap project shared data in 2016. Now, we don’t have a roadmap—which you might call a small-group effort in a smoke-filled room—to compare it to. Again, I must emphasize that our data analysis is based on what was submitted for the survey.
Starr: There are a lot of things that can affect differences between sub-segments of the findings. We had a representative sample to give us some good input on the direction of the industry. When we get into comparing different segments—such as from different regions—there is the impact of a different sample of companies that we’re talking about. And those companies have their own markets and applications that they focus on and that can produce some differences. But what Denny said in his blog is that the differences were not as black and white as we might think. There are some things that we associate with being done in Asia that are also done in North America and Europe.
Mike Carano: I fully agree with Denny and Sharon. I travel globally, I’m still very active, and I visit 75–100 OEMs a year—some of them are what you might want to call the top 50. I review technology trends with them. We also talked a lot to the large fabricators in Asia, Europe, and North America. As Denny and Sharon said, those areas are now blurred. In North America, we build more back panels and large format panels. You don’t see as many of those in Asia, but that doesn’t mean they’re not done over there. If I were to say where the area of expertise for 36” by 48” 40-layer back panels is, it’s in North America. I know fabricators who do that every day.
Now, if you wanted to build five stacked vias over two core on five more stacked for an Apple iPhone or a Samsung smartphone, those are done in volume. They’re going to be done in Asia because of the volumes, but that technology also exists here. There are people capable of doing that type of technology here, but they just don’t have the capacity to do 10,000 pieces an hour. However, they can do 500 a day, and they can stack the vias, fill the vias, and do it reliably.
Fifteen years ago, there would have been distinct differences in the landscape—more black and white as to what was built and where. There’s a lot of single-sided flexible circuitry done in Asia, but single-sided is not very exciting to me; it’s just a reel-to-reel, single-sided print and etch, but there are applications for it. You see double-sided multilayer flex and rigid-flex heavy in North America and Europe because of the military/aerospace market.
So, there are some differences there. In North America, we use more polyimide than they do in Asia; Asia is primarily FR-4 for the application. As Sharon said, what is the end application of where that circuit board is being used? Look at the use environment, reliability requirement, etc. If you are Medtronic, you’re looking at the reliability of a circuit board much differently than somebody building boards for a laptop computer or even a simple office computer. There’s a big difference there. What is the end-use application? That also drives what surface finish is going to be used on the circuit board and the trends there. To me, that’s pretty specific. I see it every day, so I’m not surprised.
Starr: What’s even more interesting than the regional differences or differences between other segments is what the results are telling us about the future of the industry. Mike, you went into the drivers and underlying conditions for a lot of those things in your buzz session at IPC APEX EXPO in January as well as a webinar that we did for members in February when the report was published.
Johnson: The regional differences seem to be driven now more by the application or the market associated with the OEMs, using that region, more than raw capabilities or fabrication expertise.
Carano: Correct; that’s what the report showed, and that’s what our experience is telling us. Look at the evolution of mobile phones or the de-evolution of the desktop computer, laptop, and tablet. The application is higher computing power, but we are doing this with a different set of materials, chemistries, and technologies that are used to make the circuit boards.
It’s about three things: humans, materials, and machines. All of those things are blending together and changing how we do those things. Based on the survey results, there’s an equipment evolution. We asked the participants what equipment investments, capital expenditures, etc., that they were making. Over the last four to six years, more and more people are trying to get finer lines and spaces, and they’re getting there with laser direct imaging, new chemistry techniques, or equipment with etchers, etc. These things are being driven by functionality and reliability, and besides the application, it also involves functionality, form factor, etc.
How many angels can we get to dance on the head of the pin? Look at the folks on the semiconductor side. They start with the chip, and those I/Os are increasing, so what’s going to happen? It changes the way the board needs to be made. Happy Holden has always been involved in design and a strong proponent of HDI, and rightly so. There are all of the technological, reliability, and functionality reasons you want to be in HDI.
But you can’t get into HDI unless you have the right investments in people, materials/chemistries, and equipment. The report showed that. Just because more HDI is done in Asia in terms of volume, that technology is still here in North America; it’s very strong but concentrated in the hands of fewer fabricators as a percentage of the world.
Fritz: I had two takeaways after reading the survey results. One was that North American fabricators are more aware of what’s coming in the future, and they are doing a decent job of forecasting what they’re going to need in five years. Please remember this is called a technology survey. The other was that Asia can and does make a lot of the same stuff as North America because they produce the volume. If you have 90% of the world’s production in Asia, 5% here, and 5% in Europe, they have to make most of the stuff that we’re going to need when it turns up to big volumes.
Johnson: With these recent changes and what you found in the report, what do you see as the implications looking out the next 5–10 years?
Fritz: For me, North American shops have to stay on top of technology, and be aware that they have to make investments, pick and choose, be very sharp, and know their customer and the OEM they’re building for. In Asia, I can’t imagine that they’re not going to stay at 90% of the world production of boards, and they’ll have to make whatever is produced in volume. Currently, it’s cellphones and things like that, but automotive is a rising trend and presents a big challenge. It’s mostly Asian, but you have European and American OEMs as well, so they’re going to have to pay attention to where the OEMs are and what they need in their products. Know your customer is the bottom line.
Johnson: Thinking about automotive in particular, do you foresee, for example, Asian companies looking to manufacture PCBs in volume in other regions to get closer to the OEMs?
Fritz: I do not necessarily see that. With shipment times down low for electronics, in a matter of hours or days, you can be anywhere in the world. I wish I knew the answer to this trade problem that we’ve developed between the U.S. and China because production is not leaving Asia, but some people are hedging their bets on moving out of China to Vietnam, Thailand, or Taiwan. Right now, that’s a bigger concern of mine than manufacturing in Europe or the U.S.
Happy Holden: Especially for automotive because it has a requirement that cellphones and consumer electronics don’t—high reliability. High reliability is a real challenge. That’s why Gentex doesn’t source any of its 120 million PCBs from China. Taiwan is diversifying into Vietnam, so they’ll also be getting boards from Vietnam through Taiwan suppliers, but they’re leaving China. They’re not hurt at all by the trade negotiations because they were never going to buy from China.
Carano: Since I know Gentex as well, every one of those 120 million circuit boards that are made in Taiwan—and maybe some in the U.S.—are all assembled in the U.S. They don’t even trust the assembly of those boards to anybody else. They do it all themselves with the phenomenal circuit board assembly operation in Zeeland, Michigan. I’ve been there, and Happy worked there, so that’s how deep they think. Everything—especially the big, important stuff—is done in-house. They won’t even farm out the bare board assembly.
Holden: The investment doesn’t bother them. But automotive is strange because Europe is going to be strong in making automotive PCBs as well, and the Chinese want to get into automotive in the worst way. But they can’t break into any of Gentex’s products, for example, and frankly, they have a quality problem. We don’t have Dr. Deming anymore to come over and teach how to do it, and that’s a tough challenge for them because automotive will continue to grow—especially with the electronics going into automotive. It isn’t going to stop.
Johnson: Let’s go around the regions. What does this information mean to a PCB fabricator in North America? What should be their takeaway or call to action?
Fritz: From my standpoint, it was you’re not sleeping at all. You have challenges ahead to implement the technology that you think is going to be required, but you understand the technology and where it’s going. So, you’re going to have to concentrate on keeping good people, raising capital for equipment, specialization, etc., but you’re not technologically asleep.
Carano: To echo Denny, if you’re going to be in this business five years from now, you’re going to do a couple of things. One, you’re going to consider looking at bleeding-edge technology, like the internet of things (IoT) and virtual and augmented reality. Those are things that are going to be significant for military and medical; it’s not just a fad or some kid wearing fancy glasses, playing games. Virtual and augmented reality are going to revolutionize how we repair automobiles and learn to fly airplanes and how physicians learn how to do operations. This is going to be something to invest in circuit board technology that needs to go there.
Regarding automotive reliability, the safety navigation aspects of the automobile, the early warning of accidents, and the control board are growing by leaps and bounds. We’re just scratching the surface. It’s going to overtake your basic consumer stuff in a short period of time in terms of the number of electronics. They’re predicting $6,000–7,000 of automotive electronics per car over the next three years. I was just in Washington, D.C., at the IPC board meeting and IMPACT Washington where people were talking about types of technology and the growth in automotive.
Internet infrastructure and bandwidth are still going to be a big part of the servers and the cloud. Everybody thinks the cloud is up in the air, but it’s on the ground, and that’s going to be key. Data protection, privacy, and security are things that are driving what’s going to keep North American circuit board fabricators in business. As Denny said, the question is, "Are they going to keep up with the investments necessary?" We're doing more and more sequential lamination boards over here with multiple laminations, heavy copper, thicker boards, smaller holes, and finer lines and spaces.
We've already talked about the importance of what the investments have to be in terms of getting there. You must upgrade your imaging technology with standard and UV light and your etching. You have to go to laser direct imaging—potentially LED imaging—and make improvements in material handling. How do you handle thin materials instead of just 062 rigid? You have to be able to handle the 7-, 5- and 3-mil core stuff.
I work with 2-mil core right now in Milwaukee at a small fabricator that employs 90 people. They're doing 2-mil core and seven sequential lams. That’s where they’re going. They have two LDIs. They don’t even use conventional light sources. They’ve made the investment, which is why they’re so darn profitable for a small organization. They’ve figured it out and made the investments by talking to the end users, and they’re doing it with high yield. It’s all about yields. And how are you going to get those yields? Technology will decide yields. If you’re a North American fabricator, like Denny said, you’re staying awake at night figuring this one out. What am I going to invest in? If you’re going to continue to do what you’re doing today three years from now, you’re probably not going to be around.
Johnson: That’s a good point. At no point did you say anything that would even hint that a U.S. manufacturer should start planning to size up in order to out-manufacture the Chinese. Let’s move over to Asia. They have a completely different set of capabilities not in manufacturing skills, but in the quantity that they can build. What does this report mean to them?
Fritz: They are placing themselves to be able to produce in volume, at a profit, most anything that comes along. There is some differentiation, and they’re more oriented toward consumer handheld stuff. But automotive is starting to pick that technology up, including instrumentation, communications, etc. I’m sure they’re watching the AI and virtual reality “at the edge,” and their customers are going to be getting AI at the source, whether it’s a drone that’s flying or a car that’s driving itself. They’re not waiting on all of this stuff going to the cloud to be able to use AI because I see that as a far bigger trend.
They’re aware of what their customers are doing, and again, watching their market shares and competing fiercely with other people in their countries or the big four countries in Asia that are capable of most everything. Japan, for instance, has pretty much given up on volume manufacture of almost anything. They are becoming a lot more mirrored to what the U.S. industry is able to provide. But Taiwan and Korea are producing in volume, and we all know China now makes more than half the circuit boards in the world.
Johnson: Let’s continue right on over to the European manufacturers and fabricators. What should they pay attention to?
Carano: Again, for the Europeans, they’re all pretty small- or medium-sized fabricators. They mirror North America on the technology level. With a few exceptions—such as AT&S—they are primarily in the space of high-end automotive and telecommunications, including Nokia. That’s a big driver for them. On the automotive side, you have Bosch, Rolls-Royce, Continental Automotive, etc. Their big push is long-term reliability, as Denny said. Building selected technology to last twice as long as it does today under harsher end-use environments. We use the term harsh use environment (HUE), including the outdoors, bay stations, satellites, and of course, automotive with high revving engines, hot and cold temperatures, and vibration.
That’s the space they’re in, so they’re doing HDI and are attuned to high, long-term reliability more than the Asians, as Denny said. With a lot of Asian stuff, even though it’s high technology in terms of how the board is built, it’s not necessarily built for high-end, long-term reliability. There’s a finite life there. Europe is much like North America and can’t afford to have short-term reliability. They won’t let it happen.
Those types of technologies build long-term reliability as well as thicker boards and better plating technologies, but not so much the laser direct imaging. But they are moving towards that. Again, they need high layer counts and material sets that allow them to move into higher temperatures and harsh use environments. You’ll see a lot of change in the material sets that are used in the next three to five years.
Fritz: One of the advantages the Europeans have is they have cooperative research with centralized think tanks that are well-supported. For instance, the first time I ever heard of industrial IoT (IIoT) or Industry 4.0 came out in Europe two years before I ever heard it here, and I still don’t hear it as much as I thought I should. They understand the implications of what 5G is going to do besides what you can hold in your hand. They’re very good at that. In Europe, they have a better sense of cooperation between their nations than any of the other regions in the world.
Johnson: That’s a good point. For an OEM working on something fairly technical with complex circuitry that is destined to go to volume, you should expect that you’re probably not the only house in the design cycle. Then, once the OEM goes to volume, it will move overseas. That dynamic looks like that should still continue.
Holden: Well, you have to define “volume.” Most of the money in the volume electronics coming out of North American OEMs is not super high volume, and China realizes that. China is trying to learn how to get the smaller lot sizes because they already know who the big companies are, such as Apple and Samsung. They demand the lowest prices, so it’s a slim margin that you can only make any money out of enormously high volumes. But the majority of North American and European electronics is not high volume. It’s much more reasonable that people in Europe and North America can supply that volume at a competitive price.
Johnson: Sharon, in addition to the regional insights, is there any information in the report that you’d like to bring to the topic as we start winding down?
Starr: In terms of what PCB shops report that they’re capable of doing compared to what the OEMs are specifying, they seem to be in good shape. Their capabilities currently are exceeding the requirements of OEMs, and they expect that to continue out five years. That’s a promising finding.
Holden: Did the OEMs specify any future reduction or change in the pitch, especially from the wafer-level packaging people? Did they say anything about finer pitch coming?
Starr: Yes. For minimum I/O pitch for surface mount packages, the OEMs are predicting a slight decrease over the next five years. The PCB fabricators were anticipating a bigger decrease. But the PCB fabricators who responded were able to do a smaller I/O pitch than the OEMs were reported specifying. Again, that’s one of those areas where the PCB fabricators seem to be in good shape in relation to what the OEMs need.
Johnson: So, the challenge is not so much the geometries as it is the reliability.
Holden: If you underfill fine pitch, it is super reliable. Delphi has been putting flip-chip silicon directly on their circuit board for the last 12 years because, again, it’s reliable when it’s underfilled. But when applying the silicon directly to the circuit board without using an interposer or package, a space transformer bodes in that there would be more fine pitch. We’re talking about 0.3-, 0.25-, and 0.2-millimeter pitch, not just 0.5 or 0.4 millimeters.
Fritz: We picked that up in the survey. Again, the thing that bothers me is if you have an island of density, like GM has been able to do for 12 years now, does that relate to a general process change to mounting many silicon chips in some way to some substrate? An island of density is a term I heard 15 years ago.
Holden: I don’t think so. With CFX and the increasing number of people in surface-mount technology and pick-and-place equipment around the world jumping into it, they’re going to be able to place those pieces of silicon that are fine-pitched and small at the same speed that they can throw down resistors and capacitors. The only additional step is they have to underfill it, but they’ve been putting down adhesives for a long time.
It will be interesting. The semiconductor companies are hard to predict. What will they do? When it comes to wafer-level packaging or other sessions at conferences, they’re out in the hall and the atrium where it’s standing room only. Papers that talk about the elimination of the interposer and the package and coming directly off the silicon either by panel or wafer lower the overall cost. You have the five-cent chip on the five-dollar package problem.
Johnson: Is there any RF or high-frequency data to discuss before we finish?
Starr: We do have some data on maximum frequency. This was an OEM question specifically, and they’re anticipating a big increase in products that need to operate at higher frequencies.
Carano: With IoT and vehicle-to-vehicle communication, I have customers now building to 77 GHz. The reason they’re building to 77, besides the requirement, is because they can’t do any better than that because the material set that is out there from the laminators is not capable of doing 77 GHz yet. They’re trying to get to 100, but they’re not there yet.
One other regional difference worth noting is in the use of solderable or final finishes. In North America and Europe, you see a lot of ENIG and hot air leveling with the sprinkling of other finishes, including OSP, and silver and immersion tin. Overall, ENIG and hot air leveling are big. In Asia, OSP is the dominant finish because of the type of boards that are made and the end-use applications. ENIPEG is used over there, but it’s a small amount on the substrate side. ENIG is big in terms of square footage. I’m not talking about the money spent on it because it’s just an expensive finish, but in terms of square footage, it’s small compared to OSP. There are some significant regional differences being driven by the end-use application of the board. Where is it going to be used and under what conditions? That drives things like the finish.
Johnson: Thank you all for your time today.
