Orbotech’s executive forum merged business and pleasure in Kunming by offering the supply chain a chance to learn about today’s technology drivers and market trends.

In November, Orbotech hosted a two-day “executive forum” at the Spring City Golf & Lake Resort (Kunming, China), uniting the electronics industry supply chain to discuss market strategy and application drivers. Building on the success of a similar event held in Phuket, Thailand approximately two years ago, the event featured representatives from Prismark Partners, NT Information (Hayao Nakahara), Dell, Amkor Technology, Endicott Interconnect Technologies, Multek, Unimicron, Meiko Electronics, TPCA, DuPont, and Nokia. Following is a brief overview of each presentation, and the implications for the rest of our industry.

Orbotech’s Strategy and Direction

Asher Levy said Orbotech will invest over $23 million in PCB R&D this year.

It’s no wonder why Orbotech has decided again to host a supply chain meeting in Asia: 82% of its sales in the first half of 2005 came from Japan and the Pacific Rim. Mirroring that number, most of the approximately 75 guests were Asian. It’s also no surprise that the company chose Kunming, which is far away from the busy coastal cities, and one of China’s premiere golf spots. But before hitting the links, there was work to be done.

Orbotech’s co-president, Rani Cohen, started the morning by giving attendees an overview of the company and the markets it serves. While the company is best known in the printed circuit industry for its AOI, direct imaging, plotting, and CAM equipment, Cohen explained that Orbotech is also pursuing other markets, including equipment for PCB assembly, flat panel displays (FPD) and medical electronics.

According to Cohen, the company wants to insulate itself from future downturns like that of 2001. As a result, Orbotech is trying to establish itself as a major player in the EMS equipment industry. Only 8% of its sales currently come from this sector, but Cohen vowed that number will rise next year. In addition, it has its eye on FPDs--the capital equipment market for FPD manufacture is expected to reach $9 billion. Orbotech said its AOI sales in this market are significant and growing. “We will grow with it,” said Cohen.

How is Orbotech pushing into these new markets? It costs money to make money. By the end of this year, the company will have invested $53 million in researching and developing new products, approximately 14% of its total revenue. But Cohen was quick to point out that the company is not abandoning the PCB industry: almost half of its R&D budget ($23.6 million) is still dedicated to PCB-related innovations.

Next, Asher Levy, president of Orbotech’s PCB Division, spoke about the company’s plans to increase market share and develop new applications. In addition to its laser direct imaging (LDI) and plotting equipment, he told the audience that Orbotech has sold over 200 “Discovery” AOI machines in one year. “We recognize the gap between the theoretical scan speed of [AOI] equipment and the real throughput,” he said, citing false alarms, set-up delays, handling, and training time as detractors from optimum performance.

Finally, Levy revealed a “future vision” that the company is working on: the Pronto. While “lots of digital data is available,” said Levy, “it’s not typically used. We want to change that.” He envisions creating a database of information mined from the various AOI, direct imaging, plotting, verification, drilling and electrical test systems. By being able to analyze this data, Orbotech believes it will help PCB fabricators improve yields. “For example, if your soldermask operation would have data on each outerlayer distortion and scaling, you could fit the optimal solder mask,” he explained.

The Presentations

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Phil Plonski, a managing partner of Prismark Partners LLC, provided a perspective on the global electronics industry. He said on average, electronics growth worldwide was approximately 3% while the PCB industry grew at a bit slower rate last year (2.4%). However, that growth rate should rise to between five and eight percent during the next three years, especially in Asia. Driving the market will be microvia technology, flex, and packaging substrates.

Plonski said that last year the worldwide electronics market totaled over $1 trillion, and shows no signs of letting up. The computer market accounted for $391 billion; telecommunications $265 billion; and other electronics $410 billion. Specifically, PCBs accounted for $44 billion in 2004 sales worldwide. For PCB fabricators, the average growth rate from 2004 to 2009 is predicted to be 6.2% each year.

To no one’s surprise, demand for telecommunications products remains popular. Plonski said there will be 700 million mobile phones made in 2006. Another growing market is the display industry, a $79 billion market. “This is big business, and growth will continue apace,” he said, citing the largest driver: LCDs ($50 billion in total revenues), as well as plasma, and CRT-based displays.

Next, Karen Larson, president and COO of Key Equipment Finance spoke to attendees about leasing options. While many Western companies are comfortable leasing equipment in many different industries, the practice remains a bit alien to Asians, who don’t want to “lose face” by feeling like renters of equipment. But Orbotech is trying to change that by appealing to the one argument that will always get an Asian company’s attention: lower cost.

Among the reasons company’s should consider leasing equipment, said Larson, is the ability to manage one’s balance sheet, cash flow considerations, flexible options (lease to own, etc.) and the freedom from possible obsolescence of the technology. While it depends on whether or not it makes sense to lease or own, one of the questions a PCB fabricator should ask is how long he plans on using a particular process or technology. “If it’s only for a short time, a few years, you might try leasing,” she said. “Or, if you think interest rates will continue to rise, and you want to lock in at the current rate, our financing options allow you to do so.”

Michael Lebowitz spoke next. Dell’s senior manager of supply quality, he talked about PCB quality challenges for fabricators, including smaller geometries, higher density boards, lead-free requirements, and defect detection capabilities. In 2006, Dell will spear-head an effort get its suppliers to achieve at least five sigma quality at the system component level: ASICS, PCB, power supply, graphics cards, passive components, etc. “Basically, we want our customers to have positive experiences,” explained Lebowitz. “That depends on quality and reliability. Quality is defined as: ‘Does it work when I take it out of the box?’ Reliability is defined as: ‘Does it still work five years later?’”

Lebowitz admitted that Dell relentlessly drives its suppliers to lower prices. That’s why the company is so serious about process improvement and efficiency. But it’s also involved in these quality initiatives because when it comes motherboards in Dell’s desktops and servers, PCBs are second only to ASICs in failure rates. “It takes process control, not just inspection,” said Lebowitz. “You can do 100 percent inspection, and still fail to meet our reliability standards.”

When asked if Dell’s supply base was ready for the lead-free universe, Lebowitz was optimistic about the company’s PCB suppliers. “Our motherboards and graphic card makers are pretty healthy,” he said. Dell prefers its suppliers to use silver-immersion. But when it comes to the preparedness in other sectors, it’s another story. The company’s suppliers of power supplies, modems, and wireless cards are having a more difficult time meeting lead-free requirements. “PCBA also has us worried,” he said. “The higher reflow temperatures can create solder joint failures.”

Amkor Technology's Ron Huemoeller tells PCB makers what to expect in IC packaging substrates.

The vice president of Amkor Technology, Ron Huemoeller, finished the first day with a talk on “Major Trends in IC Packaging Substrates.” Ron explained that five die stack packages are now common, requiring very good substrate co-planarity and wiring density. Very thin substrates are needed for wire-bonded CSP packages. Four layer substrates feature 1-2-1-type construction with 50 micron thin core and 30 micron thin prepreg, sometimes polyimide. Flip-chip packages consist of thin core substrates, ABF (Ajinomoto) build-up dielectric film, and stacked vias through the core. Today’s surface finishes are often selective OSP. Ron anticipates the re-introduction of electroless nickel/gold in the future, but detractors such as high cost and residual fears of the dreaded black pad problem may delay this move. Some flip-chip packages have very fine lines and spaces in the build-up layers in the range of 17-18 micron but yields are problematic. The “sweet spot” is closer to 25 micron lines and spaces. Ron reported development work on (Amkor patented) circuitization of very fine lines and spaces that uses laser ablation to form trenches in the dielectric to embed the circuit lines.

Day 2: More Presentations Before Hitting the Links

Hayao Nakahara tells the audience about his recent Asian travels.

On the second day of the conference, Hayao Nakahara (NT Information Ltd.) began the day by explaining the latest HDI developments. He emphasized the trend towards filled (plated) stacked vias. The HDI installed capacity is very difficult to estimate as the product mix shifts: as 1-2-1-type HDI boards give way to 3-4-3 boards, the installed HDI capacity as measured in square meters of HDI boards drops dramatically. Naka-san described several interesting board types: a Sun Micro board features a 2-22-2-type design. This board is not built sequentially, but connection between layers 1 and 2, and 1 and 3, as well as through-holes are formed after lamination, and a single metallization step makes these vias conductive. Another example was a board by Daisho Denshi with a 3-4-3-type construction. The first build-up layer uses laser-drillable prepreg for improved rigidity while the outermost two layers use RCC for better plating.

Naka-san reviewed several stacked microvia processes: PALAP (Denso), B2it (Toshiba), and FVSS (Ibiden). There is a trend from RCC to laser-drillable prepreg, and CO2 laser drilling through thinned, surface-oxidized copper is becoming very popular because of the excellent registration of this process. At the same time UV-laser drilling is gaining ground because this process is becoming competitive in throughput with CO2 laser drilling of very small diameter holes, and because the resulting holes are cleaner than a CO2 laser drilled small hole.

Hal Brown, the technology manager for Unimicron (Shenzhen) Technology Ltd., discussed how his facility is optimizing the front-end engineering system. As of November, all mass production at Unimicron Shenzhen is using Frontline’s InPlan system. According to Brown, once the customer provides the PCB maker with data, a typical manual engineering system involves panel layout, stack-up, NC drill/rout, traveler, CAM edit instructions, specification review, and finally the bill of materials. An automated system, on the other hand, is rules driven. It integrates with MRP and the CAM system, automating panelization, stack-up, impedance, and even bill of materials. Furthermore, panel layout options are automatically determined, with design rules also applied automatically. Bar-coded traveler files allows Unimicron to look up process data in lamination, drilling, and plating immediately. “Ultimately, this will save you money,” said Brown. “That fact will help convince those in your organization resistive to change.”

Next, Jim Fuller, vice president and general manager of PWB and Semiconductor Packaging for EIT (Endicott, NY) reviewed LDI applications at EIT. EIT had started with Orbotech’s DP-100, then migrated to the more advanced DP-100SL, and more recently to the Paragon 8000i model. This progression has given EIT better resolution, better registration, and improved throughput. EIT had used mostly chrome on glass phototools, and the move to LDI has resulted in lead-time reduction and lower cost. In addition, a yield improvement of the already well-controlled processes of 5-7% was realized, and the more demanding jobs realized even higher yield improvements. The improved yield is due to a reduction of repeat defects and the avoidance of so-called “blooming” defects that are a result of poor phototool/resist contact due to board surface non-planarity. The better depth of focus of the laser exposure avoids such problems. EIT practices mostly panel plating (as opposed to pattern plating). This means they need a tenting resist for outer-layers, but high speed LDI resists still have drawbacks in this application, such as poor adhesion. For this reason EIT uses standard photoresist which means they cannot fully take advantage of the throughput capabilities of the Paragon laser.

Karl Dietz, CircuiTree’s technical editor as well as DuPont’s technical manager, talked about “Developments that Drive Changes in the Fabrication of IC Substrates & PCB Structures.” Dietz explained that as IC evolution is driving electronic packaging, IC thermal density projections continue to increase. “Moore’s Law is about to come to a halt if the electronics industry can’t figure out how to dissipate this heat,” said Dietz. The solution? Higher temperatures require improved thermal management and modeling, chemically and dimensionally stable materials, and high thermal conductivity, thin layers, and filled vias.

He then explained how increasing I/O counts demand area-array packages with microvias and fine line interconnects. “Increasing IC clock speeds and high-speed digital (off-chip) signaling require planar capacitors close to the chip, with lower dielectric loss, lower copper loss, and avoidance of discontinuities (impedance changes) along the signal path,” he said.

Finally, Dietz discussed impedance control requirements, including uniform Dk and dielectric thickness, as well as controlled copper conductor width. Finally, form factors are also driving the need for thinness, miniaturization. He showed a few slides illustrating redesigned modules with embedded capacitors smaller than a dime.

Rick Chung, an engineering manager for Multek China, then spoke about his company’s use of AOI. Multek (China) installed its first AOI machine ten years ago, and now uses over fifty machines. He said Multek was basically pleased with the critical defects caught by its AOI Discovery machines, and had only a small amount of false alarms. The throughput can reach about 191 sides/hour (load, scanning, unload). One of the biggest benefits of Orbotech’s Discovery machine, according to Chung, is its straight-forward nature. “It requires only a small amount of training, which can help a lot in China’s high labor turnover environment,” he said.

Haruyuki Naya, president of Meiko Electronics Co. Ltd., a Japanese PWB maker, then talked about how his company benefited from its use of LDI. With five facilities in Japan, and two more in China, Meiko has aggressively expanded with its Guangzhou plant, spending $69 million to build a 60,000 sq. meter plant with a capacity of 180,000 sq. meters per month. It focuses on double-sided, multilayer and HDI boards. In Meiko’s Kanagawa, Japan, plant, however, the majority of its orders are four-layer-plus through-hole boards. The facility focuses on very short delivery times, and small jobs; this is where LDI becomes essential.

He compared exposure cycle time between LDI and film. The use of film not only takes longer, but humidity and temperature fluctuations can cause varying dimensions of film. In addition, LDI eliminates the cost of film, and stores images in digital format, eliminating misregistration of the film or panel. “For shorter production and delivery times, LDI technology is clearly better,” said Naya.

Frank Bai, CircuiTree’s technical editor for Asia and TPCA consultant, then spoke about lead-free challenges. The July 1, 2006 deadline has many fabricators worried; and for good reason. The lead-free process intensifies process problems in both PCB and SMT environments due to added heat and contamination, especially in the areas of solder joint voiding, interfacial micro-voiding, fillet tearing, and BGA corner underfills. Making matters worse, lead-free solder is easily contaminated by copper, raising melting temperatures which cause poor fluidity, damage on the copper surface, and even on the laminate substrate.

Bai believes the impact of these problems will be felt in 2006, causing lower yields, increased costs, and unknown root causes. He said OSP might be a possible solution, but the process remains unproven in volume production.

Nokia's Arni Kujala said the mobile phone giant will add functionality without increasing PWB size.

Arni Kujala, technology manager for Nokia’s PWB Development department, finished the day with his discussion of “PWB Trends in Portable Devices.” Kujala said that a total of 640 million units were sold by all mobile phone makers in 2004. Put another way, there were 6.5 phones built every second that year. In addition, 100 billion components are consumed annually in this area. He said system integration on chip, however, will increase but it remains challenging. The role of packaging and PCB production is becoming more important. In addition to the RoHS directive, Nokia is phasing out PVC and restricted flame retardants; no bromine, chlorine, or antimony trioxide can be used.

Miniaturization is also a driving concern, and 0.8 mm-pitch technology is becoming the minority. In the near future, 0.5 mm pitch will be mainstream. Nokia is determined to add functionality without increasing volume and size in its portable devices. Therefore, it is starting to ask for 50 micron lines and spaces and 150 micron land sizes for microvias. Of course, quality and reliability are also extremely important. “If someone drops his computer laptop, he might be worried if it still works,” said Kujala. “But if someone drops his mobile phone, he expects it to work. That’s the consumer expectation, so we must meet it.”

All Good Things Must Come to an End…

Local dancers entertain the audience with acrobatics and choreographed dance.

After the presentations were over--and golfers sufficiently pleased (or frustrated) with their performance on the links during the past two days--everyone enjoyed the cleansing waters of the local hot springs and spa before being treated to a farewell dinner. Orbotech thanked everyone for attending the event, and the guests seemed genuinely pleased with the quality of information and entertainment they received while in spring-like Kunming. The question on everyone’s mind was: Will there be another such event in the future--and if so, where? For now, that remains a mystery…. CT