Prior to CPCA Show 2006 in Shanghai, many industry observers wondered whether or not the show would succeed. With low-cost competition from a Suzhou exhibition in April, a Messe München-run electronics show running simultaneously in Pudong, exhibitors grumbling about high costs, and several notable exhibitors choosing not to participate, there was cause to speculate.

Reports of the CPCA Show’s demise, however, have been greatly exaggerated. The show, which boasted 26,000 square meters of exhibition space in two venues with 491 exhibitors, opened to brisk attendance on the first day. Although the second day sported fewer attendees, an interview with CPCA President Wang Longji left no doubt that the CPCA is responding to an increasingly competitive landscape.

Mr. Wang asserted that the CPCA is working with Fudan University in a “cooperation program.” Courses of study will include chemistry, materials science and other PCB-related disciplines. The aim, Mr. Wang said, is to someday establish a CPCA Printed Circuit College. He also was proud of the fact that over 100 people attended the CPCA’s educational conference here at the show.

The CPCA is also acknowledging its exhibitors’ frustrations with the location of the show. When asked about rumors that the show will move to Pudong next year, possibly even working with Messe München, Mr. Wang said, “We will still have a show next year. The address [however] is not clear yet.”

Show Floor Notes and Quotes

Those exhibitors who maintained a strong presence in Shanghai believe they must stay with CPCA—a member of the World Electronics Circuit Council—and its exhibition to reach all Chinese. Many companies who are exhibiting only in Suzhou this April might fail to reach beyond Taiwanese- and Japanese-based companies who have operations in Suzhou.

“They’ve decided to support a Taiwanese show over a Chinese show,” said Mania’s David Freeman. His colleague, Stuart Hayton concurred, saying, “It is disappointing that some of our competitors didn’t show up. It would be better if they were here so attendees could compare companies…. It’s difficult to say you’re an industry leader and then not show up here. If you’re an industry leader, you’ve got to be here.”

Exhibition politics aside, the CPCA Show had more than its share of news. ORC Imaging Corporation hired a new sales director with Asia responsibilities, Dr. Dirk Hillebrand. ORC’s Erick Walker said his company will also launch a new product later this year, as well as relocate to Industry, California, in April.

Shenzhen-base Mason, an electrical test manufacturer, inked a deal with Christopher Associates for North American representation. Christopher will be selling and supporting all their grid testers. Mason’s Deputy Managing Director explained the company’s foray into this new market, saying, “North America is a high-tech market. If Mason machines can sell in North America, that will raise the image of our products….” In Asia, Mason numbers Gold Circuits, OPC, Viasytems, Multek, Unimicron, Topsearch and Hitachi Chemical among its customers. “These are some very serious customers. Mason has proven, solid electrical test technologies,” said Christopher Associates President Matt Holzmann.

Among the many chemistry and materials suppliers, Atotech reported its new Inpulse 2 HF blind microvia filling process is proving successful in Asia. “This allows copper filing with much lower plating on the surface—a big problem in the past,” said Atotech’s Harald Anhert. This technology, Anhert explained, makes 50-micron lines and spaces possible for HDI panels running through a horizontal plating system. “It prepares [PCB manufacturers] for specs from companies like Nokia and Sony-Ericsson. Atotech was also thrilled when a top-three Japanese maker installed the system recently. “We have more than 50 platers to be installed already this year,” said Anhert.

On the laminate side, ITEQ’s Mike Lin said its Wuxi, Dongguan and Taiwan facilities are all running “at full capacity.” Ironically, though the company has a strong lead-free product portfolio, Lin said, “The U.S. and Europe are more aggressive [than China] in approving this product. Here, the approval for lead-free is falling behind.” He also suggested that pricing will continue to move upward. “Prices for glass fabric will increase in April because there is a shortage situation in Asia. We checked with all the weavers and they said they are running out of capacity.”

Competition is heating up in the spindle arena—no small wonder when one witnesses the staggering amount of mechanical drills running in this country. Two multinational players, Westwind and Jevco, both have Chinese facilities up and running. Westwind displayed a range of air bearing spindles, including its Storm spindle that reaches 200,000 rpm. It also showed a collection of high-speed air bearing spindles, including a D1733 250,000 rpm spindle for IC substrate and microvia mechanical drilling.

Jevco’s Randall Goosens said the company’s new D160A spindle series was garnering strong attention at the show. He felt that large Chinese machine makers were taking note of his company’s offering because “it’s a U.S. design built in China, which lowers cost without sacrificing quality.”

French imaging maker Automa-Tech introduced its first Chinese-made Yamosa unit with CCD alignment. “This was a very big step for us,” said Frédéric Baradel. “Until now we did not have such a sophisticated machine produced here in China.”

Finally, Italian equipment maker Wise SRL introduced the Flatstar series of grinding machines for removing residues like resins, inks and pastes. The machine has an automatic adjustment system to keep constant pressure, following the board’s topography and minimizing copper removal.

SIDEBAR: Interview with CPCA President Wang Long-ji

Translated by Kevin Yan, Director of Information Department Deputy Secretary General of World Electronic Circuit Council

Q: Was the CPCA Show 2006 successful?

A: Yes. We would like to prove this by a chart:

Enlarge this picture

Q: For next year’s show is there any change in the date and location?

A: 2007 CPCA Show is an important year as it will also include the ECWC11. There is no change in date (March 2007) and location (Shanghai), but for specific area of Shanghai such as in Puxi Shanghai Mart/Shanghai INTEX or Shanghai Everbright Convention and Exhibition Center or Pudong is not confirmed yet. We studying how to provide better services and expand in new technology, equipment, as well as how to attract more SMT and EMS exhibitors.

Q: Will the Chinese electronics industry to grow apace?

A: The Chinese PCB industry (including CCL, SMT and EMS) has enjoyed sustainable development over the past decade. I am confident that it will continue during the next five to ten years. The main driver is the development of the Chinese electronics information industry—the primary supporting industry of Chinese economy. It ranks second in the world. In the next five to ten years, it aims to be number one in the world and the one of the strongest.

However, the grow rate should slow down, declining from the growth of 20~30% annually that we’ve seen. If the economy grows too quickly, it hampers research and development, technology, energy, environment, labor quality and management improvement.

Q: What is the CPCA doing to address industry training and standardization? A: To build a strong industry, training is the base. CPCA has established a training school, and is cooperating with Beijing normal school and Fuda University. CPCA is establishing an Electronic Circuits Park in which one of our main goals to train technicians in technology, management, research and development.

Making a series of CPCA standards is essential for industry improvement. Meanwhile CPCA is cooperating with IPC and JPCA, and composed a group of CPCA/IPC and CPCA/JPCA standards. CPCA actively participated in WECC standard activity and published WECC standard Chinese version.

We are calling for members of CPCA, IPC, and JPCA to be more involved in standardization activities. Enterprises shall not only use standards, but also participate in composition to improve enterprises level.

Q: How are China’s domestic electronics companies competing with foreign companies manufacturing in China?

A: In this era of globalization, the immigration of foreign companies to China has given rise to the development of China’s industry and economy, and intensified market competition. Chinese state-owned and private companies are facing pressure, even crisis. However, this could be a good opportunity for these companies to adapt their operation and management, improve competence and turn the challenges into opportunity.

For CPCA, how to cooperate more closely with government so as to cultivate self-discipline and mature the industry is an impending topic. As the representative of industry and member enterprises, how do we fully address association functions? How can we actively and honestly serve government and enterprises? These are some of the challenges we’re addressing.

Q: China’s low-cost labor advantage is now being challenged by other low-cost areas in Asia. How are you coping with that change?

A: In the past, China’s low labor cost was a result of its dearth of technology prowess. Workers lacked the skills to add value. Today, however, China’s electronic circuits technology has developed, the labor force has become more skilled, as educational opportunities now abound from middle school to the university. This is bringing higher efficiency and profit for businesses. It’s natural for low-end products to be built in other regions.

Q: Could you share the CPCA’s 2005 industry data?

A: I am excited to inform you that in 2003, the production value and import and export total exceeded $6 billion. In 2004 the production value reached $8.15 billion, and I&E total reached $8.9 billion. In 2005, I was informed by the General Administration of Customs that the I&E total exceeded $11.9 billion. The total production is around $10.8 billion.

At the end of 2005, there were more than 1200 PCB shops, 800 CCL and material suppliers, special equipment 500 and more than 1000 agents and trade companies. We are releasing the top list of Chinese Electronic Circuits Enterprises. This year, a list of China’s top 100 electronics companies will be released in April.

Q: How do you perceive the future of new products such as FPC?

A: In the past few years, a number of foreign companies invested in South and East China for FPC, even in some less concentrated areas. In recent years, dozens of domestic companies are setting up FPC production lines or increasing FPC capacity and improving technological level. I am glad to see these enterprises not only produce single and double sided FPC, but also multilayer FPC and rigid-flex PCB.

Q: How will China maintain industry growth?

A: We want to lead the world in technology by benefiting from the wisdom of others. Japan leads the world in PCB technology. Our JPCA friends told me that 90%~95% of Japanese enterprises are medium and small enterprises. What makes an organization strong does not necessarily make it large.

In terms of profitability, Chinese wages are much lower than Japanese wages, but the profitability of Japanese enterprises are much greater. The Japanese industry’s production and profit per capital are 10 to 20 times greater than China’s.

In terms of delivery, most Chinese enterprises have shortened the delivery, but still have a large gap with foreign competitors. Japanese prototype is calculated by hours. Double-sided: 24 hours; 4-layer: 48 hours; 6-layers: 72 hours. This is from Gerber data to final products. Most of Chinese enterprises cannot meet these deadlines.

The future of China’s electronics industry will be determined by state and private enterprises. Most are small to medium sized enterprises, and must learn, improve and provide special value to survive. We are confident that our electronic circuits industry will become world-class and be both big and strong!