The electronics manufacturing market is big – global assembly of printed circuit boards exceeded $1 trillion last year. Given such a vast marketplace, there are numerous opportunities for companies to specialize in one or another technology. Embedded computing is one such technology with a great deal of promise.
The merchant embedded computing (MEC) market is a specialized market within the larger electronics assembly marketplace. It is a dynamic industry with advances occurring continuously, thanks to an energetic standards development effort. MEC modules and components are board-level computing systems and solutions, based on specifications controlled by a dozen or so standards organizations that have grown up along with the industry. There are literally hundreds of standards – either adopted or still under development – controlling the design and manufacture of embedded applications. There are also more than 200 companies worldwide developing and manufacturing products for the marketplace, with an additional 100 to 200 participating in the distribution and assembly of embedded computing boards and their components.
New Venture Research has been tracking the merchant embedding computing market for over 15 years. In our latest report, the Merchant Embedded Computing Market – 2013 Edition, we provide an historical analysis and forecasts of the embedded computing market, as well as our observations of market trends for the coming five years. Data is based on field user surveys and interviews by industry participants as well as our other reports related to electronics assembly. We analyze the overall market from three separate, but interrelated perspectives:
• Applications – five application segments targeted by MEC companies
• Bus Architectures – nine categories, based on the bus architecture and form factors of embedded boards and modules
• Board Function – four functional design categories of board-level products
Sadly, any current analysis of today’s electronics marketplace must start with the recession of 2009 – a near-economic calamity often compared to the Great Depression of the 1930s. The recession left an indelible mark on virtually every aspect of the global economy, not least the electronics assembly markets, including the market for embedded computing. Figure 1 shows the impact of the economic downturn on the MEC industry. In 2009, there was an abrupt and significant reversal in the growth rate as well as total revenues of the MEC market. The pain was felt in virtually every segment of the MEC market. Yet, seen from a wider perspective, the “Great Recession” was little more than a blip in a history of consistent growth by the industry. Despite the severity of the downturn, by 2012 the market had fully recovered in terms of total market size, and seemingly in momentum. Moreover, the MEC market is projected to continue growing well into the future, according to our research.
One reason for our optimism is based on the nature of the MEC industry. Thanks to the continuous evolution of old standards into new, and more advanced ones, the manufacturers of embedded computing modules and components are constantly working at the leading-edge of technology, providing to customers products that ultimately save them money. Ivan Straznicky, a Technical Fellow at Curtiss-Wright Controls Defense Systems, a long-time player in the merchant embedded computing market, points out that today’s merchant vendors can take advantage of the opportunity of “relieving the pain of our customers.” According to Straznicky, ‘Whereas in the past, they would have been tempted to build these components themselves, they now come to us because we have ready-made solutions that have been developed across multiple customers and been field-proven.” This is both the benefit and the promise of embedded computing.
Figure 1 MEC Industry Revenues ($M), 2003–2012
There are a number of market trends that point toward a growing MEC market which include:
• Purchasing by large sectors of the economy has picked up for MEC products, as telecommunications companies, industrial automation companies and government (particularly in the defense industry) are spending on repairing and replacing equipment that depend on embedded computing devices. Such maintenance work all but stopped during the recession, so pent-up demand is helping drive the market.
• The transition toward digital communications, as well as skyrocketing traffic, is driving telecommunications carriers to rapidly upgrade their networks and private enterprise to increasingly move toward IP and data communications products. The MEC industry is well placed to take advantage of this transition.
• Next-generation, high-integration silicon is enabling manufacturers to design board-level systems with capabilities not possible even five or six years ago. Improvements include lower energy consumption and very high-speed serial bus interconnects, all within small form factors. Embedded computing vendors are tightly focused on leading-edge technologies and board architectures, which will place them at the forefront of emerging markets in the coming years.
Microprocessor manufacturers, particularly Intel, continue to raise the bar with ever greater integration and more powerful chips, and as Jim Renehan, Director of Marketing at Gainesville, Georgia-based Trenton Systems points out, there is a need among standards to move up the “food-chain” to provide more capability for boards and plug-in cards.
MEC vendors face competition from other electronics sectors, as well, including the electronics manufacturing services (EMS) industry. (NVR tracks the EMS market in a companion report, The Worldwide Electronics Manufacturing Services Market). Both industries depend on sales to OEMs and to government prime contractors. EMS vendors have an advantage in selling products in large numbers at low cost. Many MEC vendors, on the other hand, are small and specialized in niche markets. Their products are, by nature, customized and sold in small quantities. But the rewards in such a business model can be high, as the vendors can act quickly and build to specifications not possible by EMS competitors.
Some segments of the MEC industry have fared better than others as the market has emerged from the downturn, and in the following sections, we analyze the issues and opportunities for each of the major market sectors covered by our report.
The MEC market consists of four leading application markets – communications, industrial automation, medical, and military/aerospace – and an “other” category that includes a number of vertical markets, such as transportation, security, surveillance, point-of-sale/kiosk applications, etc.
These application markets tend to have very specific product requirements that differentiate them from one another, as well as from other electronics assembly market segments, such as PCs and the general purpose embedded electronics markets. Requirements include operating in harsh environmental conditions of temperature, humidity, or vibration; greater reliability and security; and specific real-time computing functionality. Hence, the market leaders, competitive forces, growth rates and size of the different application segments vary widely.
Figure 2 presents a top-level analysis of the MEC market from the point of view of the five application market segments for 2012. Prior to the industry downturn, the Communications Application market was the largest single market segment. However, general Industrial Automation Applications have made a stronger comeback than has been seen in the telecommunications sector and, by 2012, had become the largest and fastest growing MEC market.
The growth of the Industrial Automation Application market – “Big Data,” as Trenton Systems’ Jim Renehan refers to it – is at least partially a function of corporations around the world upgrading their circa-2007 systems with new energy-efficient systems. It is claimed that these new technologies can enable users to replace 10 servers with one new multicore server and allow an energy payback in less than 18 months. Other advances include large increases in the ability to move massive amounts of data in and out of systems, requiring interconnect speeds to grow from 1 Gbps today to 10 and 40 Gbps. This is good news for MEC communication suppliers, as well as industrial manufacturers.
Figure 2 MEC Industry Applications by Percent, 2012
Over the next five years, we expect this trend to continue. While the Communications Application market will grow at a pace equal with the overall market, Industrial Automation products will outpace communications, and will account for more than 1/3 of the total market by 2017.
The Medical Applications market segment was also hit hard by the financial crisis, which slowed MEC-based purchases of large equipment considerably. Unlike other manufacturing sectors, which have begun to replace and upgrade equipment, new spending in the medical segment is still being depressed, in part due to uncertainty in the United States about the forthcoming changes in the national healthcare system. Consequently, we do not expect the Medical Applications market to grow as quickly as other market segments.
The Military and Aerospace Applications market suffered in much the same way as the Industrial Automation market. And it has rebounded for much the same reason. NVR expects that various challenges of providing to the mil/aero market will slow its growth rate, somewhat. Growth in this market is closely tied to politics and to the security issues facing all defense-related markets, and these challenges will impact the short-term growth rates of the MEC Mil/Aero Applications market.
Even so, Michael Macpherson, VP of Strategic Planning at Curtiss-Wright Controls Defense Systems, points out that, overall, the global picture for this market segment looks quite healthy. Curtiss-Wright Controls, based in Charlotte, North Carolina, is a leading competitor in the military and aerospace market segment. From Macpherson’s point of view, it has been primarily in the U.S. where the market has some constraints. He specifically points to the debates over the budget and sequestration as having put pressure on the “top-line of the defense market.” As a consequence, there may not be quite as many of the multi-billion-dollar programs. “But we do the electronics,” Macpherson notes. “And while there may not be as many new, big programs, the fact that they are still upgrading and doing service life extension for existing platforms means they are still upgrading the electronics, and that is good for us.”
Rodger Hosking, a VP and one of the founders of Pentek, Inc., a New Jersey-based merchant embedded computing vendor that also focuses on government and military markets, agrees with that assessment. One of the drivers of this market, he points out, is that government organizations are faced with maintenance costs of older systems that can be replaced by newer systems with “one tenth of the cost, one tenth the power dissipation and one hundred times the performance. So, you look at the economics as well as the strategic advantages of some new technology, and it’s quite a simple equation for a government electronics customer to justify upgrading or replacing older equipment.”
Bus Architecture Markets
Market penetration by the various embedded computing bus architectures is driven as much by technology as it is by market forces. The nine bus architecture categories defined in our report are as follows:
• AdvancedTCA (ATCA)
• AdvancedMC (AMC) and MicroTCA
• PC/104 and its variants, plus EPIC, EBX and motherboards (ATX and ITX)
• COM and COM Express
Each MEC bus architecture has a different rate of adoption depending on the needs of individual application segments. Some are older parallel-bus technologies and nearing their end-of-life, as is the case for PCI-based buses, specifically the PCI and CompactPCI architectures. CompactPCI (cPCI) has historically captured the largest share of the MEC market, but this is changing, as PCI architecture market shares are rapidly shrinking. Figure 3 shows that cPCI was the largest single bus architecture segment in 2012. NVR expects that within two years, its market share will drop below that of VMEbus – however, not necessarily owing to any great growth by the latter segment. Also, an “old” bus architecture, VMEbus standards and products have changed and adapted to the advances in technology and consequently will remain a significant product segment. Helping VMEbus products to stay competitive is the fact that this architecture is specifically designed for extreme environments, a design feature that makes this an ideal product for many industrial automation applications and especially for mil/aero applications.
Yet, VMEbus will grow only more or less equally to the overall market, while the big winners for the future are products driving the industry toward higher integration in smaller form factors. This trend is reflected in the growth rates of the Computer-on-Module (COM) bus architecture. This technology will grow at double-digit rates between 2012 and 2017, largely because it is enabling vendors to create complete systems on a highly integrated single board. PC/104 and its variants are also small form factor architectures, but are not as trendy as COM.
Looking to the future, though, if you had to describe the most significant trend in the evolution of MEC architectures, it can be pared down to a single word: “Faster,” says Todd Wynia, VP of Planning and Development at Emerson Network Power Embedded Computing. “The industry has shifted away from bus-based architectures to a fabric-based industry,” he says. “Instead of being the VMEbus or compactPCI of the past, it’s now Ethernet-based backplanes for architectures like ATCA or the evolution of compactPCI or VPX – all fabric-based interfaces. And the evolution of those interfaces is ever-faster.”
In keeping with that evolution, we expect to see a rapid expansion of AdvancedTCA, as well as AdvancedMC bus architectures. Both of these form factors were originally developed for telecommunications applications, but they have since expanded into industrial automation markets and are consequently experiencing high growth rates. AdvancedMC is particularly worth watching. The AMC specification was only adopted in 2005, yet we expect that it will capture nearly 8% of the total MEC market by 2017.
New bus structures are continuously being developed by merchant vendors. Basing their design and manufacturing on existing standards and on new specifications being developed by the standards organizations, the vendors sell a bewildering array of off-the-shelf embedded board designs to OEMs and even end-users. Moreover, most companies are willing to develop custom architectures based on their existing product lines. This constant innovation serves to strengthen the MEC industry and at the same time fend off competition from EMS vendors. High volume is not necessarily the name of this game; rather it is innovation, customization and optimization that will drive the MEC market through the next decade.
Figure 3 MEC Bus Architectures by Percent, 2012
Board Function Markets
The MEC industry can also be categorized according to the functional design of embedded boards. NVR identifies four board function categories: single-board computers (SBCs), digital signal processor boards (DSPs), I/O boards, and Other board functions. The last category incorporates a huge number of diverse and specific functions, many of which are custom designs, including switchboards, chassis, backplanes, and system integration devices. The MEC board function markets are presented in Figure 4 providing market share of each functional category for 2012.
In some applications I/O boards are proliferating and are customized to the wide spectrum of I/O functions that different applications use. Other board functions are also proliferating, mostly owing to a growing demand for custom products. But the real story for MEC board functions is a persistent shift toward single board computers. MEC vendors are more and more integrating all of the electronic components and functionality into SBCs, creating complete systems. (This trend goes hand in hand with the growth of COM bus architecture, which is, by definition, a SBC board function.) Leading manufacturers, like GE Intelligent Platforms exemplify this trend. Based in Charlottesville, Virginia, GE considers single board computers as increasingly significant for its product line. According to Ian McMurray, speaking for the embedded computing group, SBCs are at the heart of GE Intelligent Platform’s military/aerospace business, incorporating an extensive range of component products, including microprocessors, sensor processing systems, video processing platforms, image processing technology and highly rugged routers and switches.
Increasing integration onto the SBC platform has always been a characteristic of this market segment, and it goes hand-in-hand with the evolution of bus architecture technology. The key elements driving this trend – processors, fabrics and integration – are leading increasingly toward advanced fabric-centric architectures, such as VPX, which McMurray notes has become the architecture of choice for new military programs at GE Intelligent Platforms. Moreover, as SBCs integrate and incorporate ever more of digital signal processing and graphics and I/O functionality, the need for separate DSPs and I/O boards decreases, and leads to growing demand for single board products like the COM Express form factor. Thus, already accounting for more than half the total MEC market in 2012, NVR projects that the SBC market segment will continue to expand its market share of the total MEC market over the next five years and beyond.
Figure 4 MEC Board Functions by Percent, 2012
Throughout this discussion, we have touched only lightly on the thing that gives meaning to the merchant embedded computing market: the active, dynamic standards process. Despite a bewildering array of products and designs, the products that drive the MEC market are themselves driven by a relatively few organizations that bring together (sometimes fierce) competitors to work collectively to develop open specifications that help everyone – manufacturers and customers alike. From the earliest consortiums – such as VITA, PCI-SIG and PICMG – to the most recent – SFF-SIG and SGeT – these organizations empower manufacturers to concentrate, not on basic form factors and connectors, but on building the best mousetrap for the application.
Significant changes are happening in the MEC marketplace and in the electronics industry, in general. Along with the evolution of technologies, such as the shift from parallel to serial and from simple buses to fabric-based architectures, the standards organizations are constantly evolving their standards to keep pace. As Moore’s Law continues to be demonstrated by ever more powerful chips, applications once needing discrete chips for separate tasks are being integrated into single, more densely packed chips – and new standards specifications will make it possible to integrate those chips into embedded designs. The challenges raised by decreasing size and increasing performance cannot effectively be addressed by individual companies. It is the PICMGs, VITAs and SFF-SIGs that will help speed these trends. It is these organizations that are helping define the future of embedded computing by advancing the technologies incorporated in standards specifications.
These trends are altering the MEC board market at an accelerated pace. Not only will much of today’s separate chip functionality get subsumed into a single chip design, but also the computational power and functionality of single-board computers will skyrocket. “There are always challenges to overcome, concludes Rodger Hosking of Pentek. “That’s what keeps us in business and it’s what keeps the industry going. The big driver is the silicon and component technology that we are all benefiting from in our lives. Everything that we are surrounded by – the electronics in our cars, mobile electronics, everything – is getting more powerful, smaller, less expensive.”
Jerry Watkins is a senior analyst with New Venture Research and has more than 20 years of experience in the field of market research and consulting. Mr. Watkins has authored numerous syndicated reports in the telecommunications sector and more recently in the computing and merchant embedded computing industry. He holds three university degrees including a B.A. in History and a M.A. in International Studies.
ECTC in Las Vegas
What happens in Las Vegas at ECTC doesn’t stay in Las Vegas, it is shared here.
This year’s ECTC, or electronics components technology conference, was held in Las Vegas’ Cosmopolitan, May 28—31st, 2013. Here are some conference statistics:
Over 1,300 attendees, the highest attendance ever, from 26 countries
377 technical papers, presented in 36 oral and five interactive presentation sessions, including a student poster session
12 sessions focused on 3D/TSV, including several of the best attended sessions of the conference
16 professional development courses attended by over 300 participants
95 Technology Corner exhibitors – also a new record
In addition to the regular daytime sessions and courses, there were two special sessions on Tuesday, and three evening seminars that were all very well attended.
ECTC Special Session
Chaired by Sam Karikalan of Broadcom Corporation on the collaboration between wafer foundries, OSATs, and materials and tool suppliers as the key to the success of next generation packaging
This ECTC special session on Tuesday morning included speakers Jerry Tzou of TSMC, David McCann of GLOBALFOUNDRIES, Kurt Huang of UMC, Jon Casey of IBM Corporation, and Herb Huang of SMIC, and was titled “The Role of Wafer Foundries in Next Generation Packaging”. The main thrust of this was that collaborative development is critical, and that there must be a supply chain integration between foundry and OSAT to make 2.5- and 3-D integration come to life. That is, there needs to be a blurring of lines between the parties involved, where everyone pitches to make it all happen, rather than the compartmentalizing the tasks as what happens now. Packaging innovation is required to take place once the line and space lithographies drop to 90 nanometers (nm) and below, such as 2.5- and 3-D innovation. Scaling can occur down to 7 nm, as foreseen at this time.
The three business models exist for 3-D interconnect:
FEoL (front end of line)
MEoL (middle end of line)
BEoL (back end of line)
UMC was promoting an Open Eco-System, which is working for 2.5-D currently, and in the formulation mode for 3-D now. Cost is an issue for these interconnect models currently, and combined efforts on EDA tools and reliability testing would help all participants.
Creating a heterogeneous 3-D integrated stacked package will offer huge performance benefits, but will be a major challenge with tight integration requirements as well. Power management will be critical in development of these powerful packages. Dissipating the heat is even more critical in handheld devices, as production of 6 watts is too hot an item to hold in one’s hand. At this rate, a 4K video would operate at 40GHz, and the battery would be used up in about ten minutes.
An idea to handle the heat is to place the hottest chip on top, and use fine micro-fluidic cooling for cooling the entire device structure.
The purpose in creating these complex packaging structures is primarily for bandwidth for small phones and tablets, but also for computing power. Future markets for these package innovations include smart wearables such as small watches and glasses. Streaming videos with a crisp image will also be possible with the extra bandwidth.
ECTC Panel Session
Co-chaired by Ricky Lee of the Hong Kong University of Science and Technology and Kouchi Zhang of TU Delft & Philips Lighting on the growing market of LED for solid-state lighting
Speakers include Ling Wu of China Solid State lighting Alliance, Mark McClear of Cree Components, Ron Bonne of Philips Lumileds, Nils Ekamp of TNO, and Michael McLaughlin of Yole Development. This session occurred on Tuesday May 28th.
ECTC Plenary Session
Chaired by Lou Nicholls of Amkor Technologies on the “Packaging Challenges Across the Wireless Market Supply Chain”
Speakers included on the Wednesday evening session were Timo Hentonen of Nokia, Steve Bezuk of Qualcomm Technologies, Waite Warren of RFMD, Roger St. Amand of Amkor Technology, and SoonJin Cho of SEMCO.
Handheld devices in the wireless market, such as cellular telephones, ultrabooks, and more, are collectively experiencing an 18 percent compound annual growth rate (CAGR). Challenges and issues include:
Thermal – get the heat out
Get more functionality into the smallest form factor possible, and more features = more power = more heat
The next pitch node
Materials and processes, such a low-k, lower k dielectrics, low CTE resin, and glass cloth. Thin materials needed but need to be stiff to address warpage issues.
Mechanical, including ultra-thin of <150 µm, CTE, warpage
Electrical, including signal integrity
Supply chain roadmaps and collaborative efforts to ensure seamless integration
Higher data rate / more bandwidth. Need to send and receive at the same time, and the need for Microshield™.
Routing density and embedding passive devices in the 2012 – 2013 time frame, and active devices in 2014 and 2015. Challenges will include via to pad alignment, reliability (crack and alignment), low profile but high capacitance, and substrate yield.
The move from a cored substrate to coreless to achieve a thinner substrate and thus package height (1.1 mm to 0.6 mm). Minimize thickness variation to minimize warpage.
Bump volume and volume uniformity
µbump mounting in the future
Interposer thinness and metal count layers are also challenges.
The handset thickness is going down, to 6 mm in the case of the latest Nokia phone. The PoP solution contains a memory and processor, and is thinner than a penny, which must stay flat. The supply chain for a product must be coordinated with for two years prior to product launch to ensure that the product will come together in time for market.
Copper pillars allow for a finer pitch, which are connected via thermal compression. By moving to finer pitch, the package design can move from a full array pattern to a peripheral array, thus reducing the metal layers on the substrate from four to two, reducing costs. Warpage can be controlled by applying pressure to the top of the package during the heat cycle of this process.
When a second die is attached to a package substrate on the underside of the package using flip chip interconnection for a Possum™ style package, warpage is controlled by employing a 0-2-2 substrate.
Warpage is controlled on bare die on the corners by putting a lid on the top of this die.
The next issue for this market in a low cost interposer (LCI). Currently interposers are predominantly silicon, but laminate and glass are being explored. A supply chain must be created for these materials if they are to become viable alternatives as interposers.
Co-chaired by Kishio Yokouchi of Fujitsu Interconnect Technologies Ltd. and Venky Sundaram of the Georgia Institute of Technology on advanced low loss dielectric materials for high frequency and high bandwidth applications
Speakers at the Thursday evening seminar include Yuka Suzuki of Zeon Corporation, Yasuyuki Mizuno of Tsukuba Research Laboratory, Hitachi Chemical Co., Ltd., Shin Teraki of NAMICS Corporation, and Hirohisa Narahashi of The Research Institute for Bioscience Products & Fine Chemical, Ajinomoto Co., Inc.
Modeling Special Session
Co-chaired by Yong Liu of Fairchild Semiconductor and Dan Oh of Altera on “Modeling and Simulation Challenges in 3D Systems”
The ECTC Keynote Speaker, Dr. Chris Welty from IBM, brought his vision and experience on solving engineering problems in a very entertaining presentation on the design and competition of the Watson supercomputer in the Jeopardy! TV game show during Wednesday’s luncheon. Watson was designed to compete against former star players on Jeopardy! without having access to the Internet, and had to compute an answer to the question given within only seconds. The size of Watson dictated that this supercomputer, the size of a room, had to sit outside the televised viewing room, and not in the actual viewing room on a chair. As Dr. Welty stated, Watson, in technical terms, sucked at the game. The hilarious answers provided by Watson to the questions stemmed from a lack of being able to understand the actual questions being asked, which would include an understanding of nouns, verbs, etc. Watson’s “brain” did word searches in its database and came up with answers based on the frequency of how often a word was mentioned in news articles. Thus the actual question was not answered correctly, and reprogramming of Watson had to occur for it to have the ability to recognize the actual question. Since this was an engineering conference, I guess the concept of trying to teach Watson how to understand the question fit right in…
Corporate sponsors, including the gala sponsors, include Nanium, Amkor, DOW Electronic Materials, AMAT, Microsoft and STATSChipPAC. The luncheon and program sponsors include Corning, ASE, GLOBALFOUNDRIES, NCAP, Invensas and HD MicroSystems.
Photos taken at the conference are posted on Flickr: http://www.flickr.com/photos/38916807@N07/sets/72157633891833244/
Next year’s conference will be held May 27-30, 2014, at the Walt Disney World Swan & Dolphin Hotel in Lake Buena Vista,Florida,USA.
Selected Images from the ETCT Conference (see PDF file)
The Internet has altered the ways in which individuals and businesses worldwide function, communicate, and connect. The hardware that enables this, and the need for more bandwidth to support it, are driving technological advances in many ways. Much progress has been made in front-end manufacturing, and much of the current focus on increasing Internet speeds is on the “back end,” or the packaging end of the chip-making process, known as “More than Moore,” after Moore’s Law.
A number of packaging solutions are designed to enhance chip performance, while at the same time maintaining a space-constrained footprint. These package solutions and options include:
• Stacked packages
• Through-silicon vias (TSVs), including 3-D and 2.5-D
• System in package (SiP)
• Fan-in QFN packages
• WLPs, including fan-out WLPs
• Flip chip interconnection
Stacked packages stack the die vertically for close coupling of the die while consuming very little space on the PCB. This packaging solution can be applied to a number of different IC packages, with the FBGA being prominent. Stacked packages have a 13.7 percent compound annual growth rate (CAGR) from 2011 through 2016.
Through-silicon vias (TSVs) are a newer form of interconnection, connecting the die in a stack either through the bulk silicon (3-D interconnection) or through a substrate or interposer within the stack (2.5-D). TSVs that connect ICs together using these methods have enormous growth potential, and have begun to be produced in volume.
System in package (SiP) is a functional block, pulling devices needed for certain functions into a unit for close coupling for superior performance and space saving. Cell phones are the primary candidates for this technology. SiPs have a unit growth rate of 13 percent CAGR through 2012.
Fan-in QFNs extend the number of rows of leads from the usual one with a traditional QFN to two or three rows of leads. The leadframe is stamped or etched as in any other leadframe solution, but the leads are of various lengths, either two or three different lengths. When bent downward for connection to the PCB by trim and form equipment, the result is a multirow, array-patterned package solution with a hole in the center, or fan-in QFN. This allows the number of package leads to extend into the hundreds, up from generally fewer than 50. The resulting package is a high-density, leadframe array package. The fan-in QFN and fan-in QFP market will experience unit growth of 38.6 percent CAGR for the years 2011 through 2016.
Reconfigured or fan-out wafer-level packages were introduced in 2006. After devices are manufactured on a wafer, the devices are sawn and transferred on a carrier to another larger wafer that has gaps between die, which are filled with overmold material that also coats the back side of the devices for protection. This allows for a larger surface on which to extend a redistribution layer, thus allowing for far more I/Os than would be possible on the original smaller surface. Solder balls or bumps can be added to this surface for interconnection to a printed circuit board. Fan-in WLPs will experience an 11.6 percent CAGR through 2016.
Flip chip is an interconnection style that “flips” the die upside down (or active side down) so that the circuitry faces the substrate. This requires putting bumps on the pads to make the electrical connectivity points protrude from the face of the chip. The bumps then carry the electrical signal in lieu of wire bonds. Because the entire face of the die is available for electrical connections, a higher number of I/O (input/output) signals can fit in a smaller footprint. Superior electrical performance can also be achieved due to the shorter electrical length and fewer parasitics. The use of flip chip becomes mandatory on any die with an I/O count so high that the pads cannot fit around the die perimeter. Flip chip is also used for some high-frequency RF devices. This technology, used in IC packages, will have unit growth of 12.6 percent CAGR through 2016.
Sandra L. Winkler is a Senior Industry Analyst with New Venture Research Corp. and has been writing and researching the semiconductor packaging industry for more than 20 years. More information on these topics and others can be found on New Venture Research’s website at: www.newventureresearch.com/
The public has continued to invest in wireless mobility products, prompting OEM suppliers to produce a wide range of cutting-edge, yet overlapping devices. This growth in demand for wireless mobility products is expected to evolve special product configurations ranging from high-end ultrabooks all the way down to simple e-reader devices. End-user markets and vertical applications will differentiate product models along the lines of medical, automotive, aerospace and industrial applications.
During 2012, the total worldwide total cost of goods sold (COGS) market for all wireless products (notebooks/ultrabooks, tablets, smartphones, traditional cell phones, and e-readers) is estimated to reach $348 billion in assembly value, or almost one-third the assembly value of all electronics products manufactured worldwide. Due to the ever increasing demand for these products and the staggering overall total unit shipments (over 2 billion), manufacturers have a powerful incentive to develop new technological innovations and product iterations on a regular basis. This is starting to flood the market with so much product choice that it is blurring the distinctions between device segments so that tablets are now competitive with notebooks and e-readers are competitive with smartphones. All products segments are starting to become competitive with each other.
This trend will drive down the average assembly value of each product by an estimated 1.2 percent CAGR over the next five years with smartphones suffering the highest decline and notebooks experiencing positive growth due to the introduction of ultrabooks. It is projected that by 2017, the total assembly value of all wireless mobility products worldwide will achieve $559 billion, or a 9.9 percent CAGR.
End user applications for notebooks are expected to follow the trend toward verticalization, where business and professional needs will be customized accordingly. Vertical markets include entertainment, healthcare, scientific research, legal services and government. Tablets in particular will follow this trend as buyers migrate away from games and music and embrace entertainment (video), shopping, and traditional email/communications and web browsing. This pattern will be similar in smartphones since these products will become pocket-size versions of tablets over the next several years. E-readers hold the greatest potential for evolution of end-user applications when the education (textbook) market is realized, but are expected to open up over the forecast period for other reasons, i.e. when published content (magazines, catalogs, etc.) becomes digitally available. The e-reader is thus likely to evolve into a low-cost smartphone with limited capabilities.
The wireless mobility product assembly market will be led by many interesting OEM suppliers. First among them is Apple, which is probably experiencing its peak in terms of brand recognition and revenue in 2012. Samsung will represent the biggest threat as the company flexes its design and distribution muscles to make an equal or superior smartphone, tablet and possibly e-reader product. Another important player will be Google, which will be launching its own hardware products (formerly Motorola) to capitalize on the search and advertising business. A less than obvious powerhouse will be Amazon, which is attempting to seed the market with low-cost e-readers that can eventually be upgraded to be computational and interactive. Suppliers that will face the most brutal competition include Acer, Dell, Huawei, Lenovo, Nokia, RIM and ZTE. There may be some life for innovators like Barnes&Noble, HTC, LG, and Sony but the field is already too crowded. While some suppliers may exit the market, one thing is for sure—demand for wireless mobility markets will be very strong over the next several years.
The Wireless Mobility Assembly Markets – 2012 Edition report provides critical information on the electronics COGS manufacturing assembly. For more information, see http://www.newventureresearch.com/wp-content/uploads/2012/11/mm12bro-rs.pdf
The Worldwide Semiconductor and Manufacturing Assembly Markets – 2012 Edition is a special report consisting of an Excel database and Word document discussion. The report examines the total assembly costs of 47 different electronics products starting with their semiconductor value, non-IC related costs, assembly of printed circuit board (PCB) and final box assembly. As such, it provides a unique understanding of the total cost of goods sold (COGS) for leading electronics products.
New Venture Research (NVR) has followed the electronics assembly industry for over 20 years with numerous research reports that focus on semiconductor packaging, printed circuit board assembly, as well as the EMS subcontracting markets. This latest report, The Worldwide Semiconductor and Manufacturing Assembly Markets – 2012 Edition, is designed to help our customers understand the true cost of electronics manufacturing within seven critical electronics market segments including:
Within these seven market segments are 47 unique product categories that are quantified for their electronics assembly value. The following production data is provided for each individual product category in terms of units shipped, average assembly value (AAV), and assembly revenue:
A separate Word document provides a discussion of each market segment, leading and emerging products, and dominant trends. High growth products are examined for their market leadership and impact on the semiconductor, PCB and Box assembly markets.
By Sandra Winkler, Senior Industry Analyst, New Venture Research
If you are a hungry smart phone owner who wants to know the whereabouts of local restaurants, there is an app for that. Want to know how foods with bar codes are rated nutritionally? There is an app for that as well. More and more people are obtaining smart phones, giving them access to a wealth of information literally at their fingertips through the Internet.
In 2011, 242 million smart phones were sold. With an outstanding compound annual growth rate (CAGR) of 15.2 percent through 2015, 416 million will be sold in that year.
The more sophisticated the phone, car, or what-have-you, the more electronics are stored within. This makes for good business for the IC industry, which has a unit CAGR of 7.3 percent through 2016 (see Figure 1).
Figure 1 IC Unit Forecast, 2010–2016
IC revenue is growing at an even faster CAGR of 7.8 percent through 2016, with packaging revenue being about 15 percent of that total, as seen in Figure 2.
Figure 2 IC Revenue Forecast, 2010–2016
The packages with the highest unit growth rate to house all these ICs include the WLP at 13.9 percent CAGR through 2016, QFN at 11.8 percent, DFN at 10.7 percent, and BGA at 10.5 percent. SOs, however, still garnish the largest share of the unit sales, as seen in Figure 3.
Figure 3 IC Unit Forecast by Package Family, 2011 vs. 2016
Within the huge variety of ICs, those being created in the greatest numbers include voltage regulators, standard logic, DRAM, and flash. From a revenue standpoint, the highest performing devices include special-purpose logic (SPL) for computers (including graphics, chip sets, etc.), DRAM, SPL for communications, standard cell and PLD, and flash. The most popular packages and I/O counts within each of these categories are:
Most Popular Package andI/O CountRange
SPL—computer (graphics, chip sets, hard disk drives, etc.)
BGA 300 I/Os and up
FBGA 104–304 I/Os
FBGA 34–100 I/Os
FBGA 34–100 I/Os
SO 4–32 I/Os
Standard cell and PLD
BGA 104 I/Os and up
Voltage regulators and references
SOT, SO 4–18 I/Os, DFN 4–18 I/Os, WLP 4–18 I/Os, QFN 4–32 I/Os
The demand for increased high-speed bandwidth is generated by the use of the Internet. YouTube and other graphic media consume an enormous amount of bandwidth. I once heard a statistic to the effect that if all the information provided in all of the yellow pages ever published in theUnited Stateswere uploaded onto the Internet, it would be less data than is uploaded onto YouTube in a single day, or something of that order. People are expressing themselves on YouTube, Facebook, Twitter, and the like, and sharing camera phone photos by uploading this information onto the Internet and e-mailing it to friends, all at an amazing rate. People want to be able to take streaming videos at a vacation spot, as the scenery unfolds before them, and immediately send them to their friends and loved ones so they can share that sense of ahh in real time. The demand for social media is ever increasing, and technology must be furthered to meet this demand. One method of meeting these demands is with the use of TSVs.
Devices that are high on the overall revenue list—DRAM, SPL for communications, standard cell and PLD, and flash, plus MPU—also incorporate through-silicon vias (TSVs) within their packages for 3-D interconnection.
3-D TSVs are incorporated into IC packages as a method to interconnect two or more stacked die, with vias going through the bulk silicon of the lower die to connect to the package substrate. A variation on this idea is the notion of 2.5-D, where devices are sitting side by side on a common interposer. This interposer can be used to fan out or reroute the electrical traces of a device while routing the traces to the package substrate below, connected with microbumps. Silicon interposers accommodate the CTE mismatch between the silicon die and package substrate, acting as a stress reducer, thus improving reliability.
By moving to 3-D interconnection, the device can achieve 100 times the connectivity or bandwidth, with less power consumption. With lines and traces on the silicon die moving to 45-, 32-, and 22-nm lithographies, utilizing TSVs is a way for the back-end interconnection to keep pace with the front-end manufacturing. Reduced parasitics and smaller form factors are other benefits of 3-D interconnection.
Potential markets for TSVs as described above will grow from 39 billion units in 2011 to 54 billion in 2015, with a 9.1 percent CAGR during that time period. The revenue for these markets is substantially higher, at $154 billion in 2011, growing at a CAGR of 8.1 percent to $214 billion in 2015.
TSVs are found in FBGAs, BGAs, and WLPs. These packages, along with QFN and DFN packaging solutions, have the highest unit growth rate of all IC package types. Advances within these package families, such as fan-in WLP and fan-out QFN, are extending the reach of these packages, and are allowing for new products to be developed and ushered into the marketplace at prices that consumers are willing to pay.
More information on IC packages, their advancements, and the markets they serve can be found in The Worldwide IC Packaging Market and Advanced IC Packaging Technologies, Materials, and Markets, available at New Venture Research (www.newventureresearch.com/).
The worldwide contract manufacturing (CM) market took another large jump upward in 2011, increasing nearly 12 percent in revenue, following an extraordinary year in 2010 in which the industry expanded by 37 percent. Whereas most industry observers expected a modest growth rate in 2011, no one anticipated this strong a market, which was driven by the continued demand for smart phones and new mobility devices (iPhones, iPads, and e‑readers). The largest beneficiary of this growth was Foxconn, the dominant subcontractor of these devices for a variety of key OEM companies. So long as Apple continues its spectacular growth in revenue, as most analysts predict, Foxconn will continue to be lifted by this company’s rising tide.
The really good news is that virtually all industry participants made money in 2011, with very few exceptions. In fact, the contract manufacturing industry made more money in 2011 than at any time in history, although this may not continue if the past is any example. Foxconn once again set the record ($2.7 billion—not a great result given its total revenue of $111 billion), followed by HTC ($2.1 billion), and to a lesser extent by a number of Asian ODMs. Only a minority of EMS firms did not grow or make money in 2011.
Table 1 below presents the summary forecast for the worldwide revenue growth of the CM market from 2011 to 2016. Given the minor differences in business models between EMS firms and ODMs, NVR foresees little separation between the two types of suppliers with regard to customer services and revenue growth. ODMs should underperform EMS companies over the forecast period as a result of their riskier business model that relies on giving preference to branded and low-end computer, communications, and consumer products. To their credit, ODMs are usually better able to streamline their production methods and create economies of scale through the concentration of components and vertical integration, but ultimately all profits get driven to the margin over time. Because EMS firms manufacture a wider range of products, and can leverage their operations in different ways, it is believed that they will experience a slightly higher growth rate over the forecast period.
The shift in production to low-cost regions has been fully accomplished over the last several years. Today, we are seeing OEM customers requiring their CM partners to manufacture products near the regions where they are to be sold. For certain high-volume products like mobile phones and PCs, OEMs need to leverage the lowest cost in manufacturing. However, for other products the labor cost differentials are becoming less significant when weighed against the total cost of production (including transportation and logistical challenges). Offshore product migration will still take place, according to NVR’s forecasts, but it will be at a more moderate pace.
Both EMS firms and ODMs will experience the strongest growth from production in the communications, computer, and consumer market segments. Specifically, EMS companies will find very strong growth in E-readers, tablets, enterprise storage systems, and personal navigation systems, while ODMs are projected to experience very strong growth in tablets, E-readers, cellular handsets, notebook PCs, and digital cameras. In general, EMS firms will tend to excel in technology-intensive product areas and complex board assemblies. ODMs excel in manufacturing commodity/high-volume products such as motherboards, monitors, handhelds, and consumer electronics.
Every year, NVR conducts and financial performance comparison and ranks the top ten overall CM companies by a variety of metrics. In 2011, HTC emerged as the CM supplier with the highest total score, followed somewhat distantly by Quanta Computer and Wistron, according to NVR’s financial scores. Note that all of these high-performing companies were Asian ODMs. Jabil Circuit scored a respectable fourth level in rankings.
Foxconn continued its extraordinary dominance as the leading EMS firm in the industry, outdistancing its closest contender by more than three times in terms of revenue. Flextronics remained steadfastly in the number-two position, followed by two ODMs (Wistron and Quanta Computer), and Jabil Circuit in fifth position.
New Venture Research has just published it’s widely acclaimed market research study on the contract electronics manufacturing services market in a report titled, “The Worldwide Electronic Manufacturing Services Market, 2012 Edition.” More details can be seen at: http://www.newventureresearch.com/wp-content/uploads/2012/06/ems2012-RS.pdf
Nothing could be more relevant to the Merchant Embedded Computing (MEC) business today than the saying, “With change comes opportunity.” The recent recession has impacted application segments that drive MEC purchases in both positive and negative ways. Many MEC applications are fragmenting into areas with highly focused product requirements, consisting of many options—the type of business model that competing EMS subcontractors who “design once; build many” are simply not good at. Another trend is the escalating Asian ODM manufacturing model, which threatens to capture an increasing proportion of this market. Moreover, there is the changing political climate to bring manufacturing back in-house (“insourcing”). Finally, next-generation high-integration silicon at 28 nm is bringing enormous capabilities to board-level systems that only a few years ago would have been possible only with a roomful of computers. Improvements include lower energy consumption and very high-speed serial bus interconnects, all within small form factors (SFF).
While “green” may be the new color with respect to energy consumption features, “red” was the color on many MEC suppliers’ financial sheets during 2009 and 2010. 2011 showed significant improvements in many application areas but the first half of 2012 is burdened by the situation in Europe and to a lesser degree a slowdown in China and both factors are clearly causing an industry and economic slowdown. Whereas the overall MEC market is slowly recovering from the trauma of the economic meltdown, the performance of various market segments, bus architectures, and companies is recovering at different rates and in different forms. Most economist don’t believe a “double-dip” recession in the United States will occur in 2012, but most agree on a sluggish economy that effects nearly all MEC industry sectors. For example, the USA auto industry clearly has recovered in the USA but is being slammed by the European sector. The table below shows MEC revenue forecast from 2011-2016.
MEC Revenues ($M)
MEC markets tend to have very specific computer requirements that differentiate them from other computing segments such as PCs and the general embedded electronics markets. These requirements may include operating in harsh environmental conditions of temperature, humidity, or vibration, greater reliability and security, and specific real-time computing functionality. Hence, the market leaders, competitive forces, growth rates and sizes of the different application segments vary widely. In all cases, the merchant market for MEC products represents only a small portion of the total value of the electronics consumed by these markets which change substantially over time.
In the communications sector, the wireless segment is driven by smart phone traffic expansion and the network providers upgrading system to 4G. This sector performed much better than the wireline telecom sector. 3G and 4G services are providing profits are for carriers going forward; however, the wireline and optical networks are gearing up for upgrades to support the ever-increasing traffic. The ROI for text messaging has proved to be phenomenal because most people now spend more time looking at their cell phones than talking into them, thereby increasing the need for more data services. People are not only looking at text messages but websites (Facebook) and watching video as well. These factors are putting enormous demand on the network and carriers are moving to 4G as fast as possible.
The recent announcement of the new Intel “Romley” architecture, and some recovery in the economy have inspired increases in capital expense budgets. The Romley microprocessor was delayed by about 6-9 months are in May, HP, IBM and Dell all announced new servers and it is kicking off the server upgrade cycle in data centers.
Corporations are gearing up to upgrade their circa-2007 systems with the new energy-efficient systems that can replace 10 servers with one new multicore server and allow an energy payback in less than 18 months! Virtualization trends are now moving massive amounts of data in and out of systems, requiring interconnect speeds to grow from 1 Gbps today to 10 and 40 Gbps. This is good news for MEC communication suppliers.
The financial crisis significantly damaged the industrial automation market and also took its toll on industries such as capital equipment, aerospace, and automotive, which use MEC systems to automate production testing and process control. Just as these segments are recovering in the USA, they got slammed with the European crisis.
The medical segment was also hit hard by the financial crisis, which made MEC-based purchases of large equipment much more difficult, especially with the buzz and confusion surrounding Obama’s Healthcare plan which delayed capital purchase. This coupled with the changing political climate surrounding health care in the industrialized countries also stalled and slowed demand.
Until recently, the ever healthy Mil/Aero segment has been impacted by the financial virus and is facing declines in in the USA defense department funding (larger than all the rest of the world’s defense spending). That is likely to cause a restructuring, not seen since the end of the cold war. Counter to this the cut backs in personnel, is creating opportunities for computerized battle ROVs and electronic-enabled soldiers.
Each special MEC bus architecture has a different rate of adoption depending on the needs of individual application segments. Key trend catchphrases for architectures are “power is up and down”; “green is the new color”; and “small is big.” Older bus structures are giving way to newer ones that offer smaller form factors, more serial buses and interconnects, and lower operating power. New 28- and 32-nm silicon architecture for microprocessors, graphics, DSPs, and high-integration I/O chips packs unprecedented processing power while greatly reducing power consumption. This is especially important today as many MEC systems operate 24×7 and the operating costs relative to energy consumption are playing a more important role in the total cost of ownership beyond initial price/cost. Moreover, high-integration silicon and serial buses enable smaller form factors than in the past and are making many older, parallel bus structures, such as PCI, look like “clunkers.” Though technology transitions often move slowly, this is clearly the new direction and is likely to accelerate.
Bus structures continue to proliferate around the major and long-established buses but the number of variances is past 100! Although this may seem like a bad thing and difficult to track, it is all part of the “customization” strategy that MEC suppliers are using to fill customer needs and fend off competing generic manufacturers, who build in high volumes once a specific board design has been optimized. There are not any major shifts in bus architectures on the near term horizon. Older stagnant buses are dying off (PCI). Busses that constantly renew their features and stay current with the latest technology maintain their positions (VMEbus). ATCA in communication and AMC could show some significant growth over the forecast period.
New Venture Research has just published an in-depth study of the Merchant Embedded Computing Market – 2012 Edition. Further details can be seen at: http://www.newventureresearch.com/wp-content/uploads/2012/05/mec12bro-RS.pdf
The worldwide industrial electronics assembly market is one of the most interesting and profitable segments for EMS companies to engage in. While growth of the total available industrial market is modest (between 5-6% annually), the growth of the EMS services sector is more than double depending on the product. Some of the most promising opportunities can be found in the Test & Measurement and Process Control sectors where advanced electronics are making a huge impact in efficiency and cost reduction. Both of these segments rely on semiconductor technology to improve performance, accuracy and payback for OEM product development. As a result, EMS companies are helping OEM suppliers to reduce cost, efficiency and time to market. As with most product markets, electronics innovation is key to overall market growth.
New Venture Research (NVR) has followed the electronics manufacturing industry for over 20 years and is pleased to now offer this special study—The Worldwide Industrial Electronics Assembly Market, 2012 Edition—the most comprehensive and in-depth market research report available on this industry. In 2011, EMS suppliers achieved only a total available market (TAM) penetration rate of 22.6%, however, by 2016 the penetration rate is projected to reach 26.9% – an increase of more than $10 billion in revenue worldwide. This represents a compounded annual growth rate of 8.2% – nearly double that of the OEM annual market growth rate.
The report begins with an examination of the various kinds of electronic assembly products in the industrial sector. Certain assemblies are very electronics-intensive (that is, they are suitable to semiconductor innovation). Examples include programmable electronics controllers (PLCs) which dominate the process control industrial sector, and electrical inverters found in clean energy technology. Other industrial products, such as HVAC, laundry and LEDs are mixed in terms of outsourcing opportunity due to the high percentage of mechanical assembly labor involved.
A total of 29 industrial products across four product segments are examined for electronics assembly content, in terms of cost of goods sold (COGS) and outsourcing opportunity. The result is a mixed summary of high growth versus high volume manufacturing opportunities that are likely candidates for outsourcing (other products are better left to the OEM to address and manufacture). As a result, electronics-intensive products such as test equipment will experience the highest revenue growth over the next five years, whereas there will be modest growth for most electro-mechanical industrial product assemblies.
All 29 industrial electronics product opportunity segments are examined for electronics/semiconductor content and manufacturing challenges, as well as potential partnerships with the leading OEM suppliers. In general, most Western OEM companies are open to subcontracting, whereas many Eastern OEMs prefer to maintain in-house manufacturing service capabilities–mostly for reasons of revenue capture as opposed to efficiency. The result will be a contrast in the dynamics between the different geographic regions with regard to manufacturing fulfillment and distribution. These conflicting forces will disrupt the industrial economic picture over the next five years, resulting in displacements in leadership and innovation.
All of these products and markets are analyzed from 2011–2016 in terms of OEM revenue and EMS subcontracting potential, in addition to production by region. An Excel spreadsheet allows for easy understanding and manipulation of the production data and ranking of OEM leadership.
For more information, please contact New Venture Research at 530-265-2004 or see the website at www.newventureresearch.com/
Perhaps the most frustrating thing of enduring the electronic manufacturing industry year by year, is the inevitable nature of its cyclic nature. For some reason, equipment manufacturers and OEM product manufacturers cannot escape the desperate cycles that this industry suffers. While there are natural cycles of consumption and excess, it usually is a result of consumer spending variations that thread down through the supply chain and create havoc with the supplier base and end product life-cycles.
Every supplier wishes it would stabilize, yet it does not. The worst hit is the equipment suppliers who are whipped by the combination of end user demand and OEM manufacturer whims concerning predicted fulfillment. The chain reaction of supply series makes this boom/bust scenario chaotic and excessive in terms of forecasting revenue. It is often an accumulative effect in which the tail-end of the chain gets whacked the most – usually the equipment/manufacturing guys, while the distributors and EMS suppliers get left with excess or deficient inventory.
This is all specific to product industries – things like PCs, notebooks, LCD monitors/TVs, set-top boxes and video console games, just to mention a few. To be sure, the OEMs are their own worst enemies – that is, they hedge against upside demand and over-predict against down-side supply – to their, and their supplier’s demise. Yet, who can claim to be accurate and wise after the fact? As a forecaster, I can truly claim that when we are spot-on, it is sheer luck, and when we are wildly off, we simply hide undercover until the storm passes.
One hopes that time will provide wisdom and sanity to such swings of prediction. Yet, there are always new and emerging pundits willing to state an option as to the market trends. Who to believe – the experienced or the lucky prognosticator?
We try and integrate the knowledge gained from watching such cycles time and again with our current forecasts. Conservatism seems to pay dividends, yet we have often been wrong, regardless. Sometimes we have been astoundingly accurate – shockingly – yet we know that we must attribute it to luck.
A few examples can make this point. In 2000, when the market was booming, we accurately predicted the growth of the electronic manufacturing services (EMS) market to a very concise degree, however, this was because it was exploding and there seemed to be no end in sight. When the downturn arrived, it was very embarrassing to revise our forecasts, chagrined with the entire industry downturn. Similarly, we expected a solid 2009 year without the unpredicted contraction. We lick our wounds and beg for forgiveness and forgetfulness.
Yet, who could know? Such cyclic cycles exist that seem to beyond our awareness. The Center for Cyclic Studies is well aware of this, if you believe in such things as planetary or cosmic/organic cycle studies. It is a fascinating organization, that examines not just economic cycles, but other systemic cycles in nature and life that seem to follow patterns that go outside our predictive natures. I can’t say that I agree with all these predictions, but I am interested in them in so far as they help us to understand our businesses.
The Foundation for the Study of Cycles makes this bold statement, “Cycles are meaningful, and all science that has been developed in the absence of cycle knowledge is inadequate and partial. …any theory of economics, sociology, history, medicine, or climatology that ignores non-chance rhythms is as manifestly incomplete as medicine was before the discovery of germs.” – Edward R. Dewey, Harvard Economist – 1967.
Cyclic prizes have been awarded for solar and lunar cycles in the ‘El Nino’ which correspond the droughts in Northeastern Brazil, Morrocco and the American Southwest, specific markets, economics, and forecast turning points in the international business cycle, and even go so far as to predict the systematic cycles of war, cycles of tree ring widths, weather forecasting, biophysical science, civil violence, insurance, motivation and yes, corporate lifecycles! It can all become a little esoteric when it comes down to biocybernetics and new option markets, but so it goes.
Coming back to earth, cycles do exist and seem to re-occur. In electronics it seems to be one of boom and bust, much to the consternation of the participants. Yet, growth endures and we look forward to new gains every year. In this regard, I can positively predict that the EMS, electronics assembly market and corollary industries will continue to grow, albeit at varying rates. The recession cycles are the most disturbing and unpredictable.
I am not advocating cyclic studies to help us understand the economics of electronic manufacturing. Yet, it is something we must consider in the larger context of things. Macroeconomic cycles are real despite our subtle denial. I wish we were able to harness them better to help us in our work. In the meantime, we will try our best to work with our best knowledge, intellect and intuition to help our clients to predict future product demand. Otherwise, suppliers must rely on their own intelligence, and where does that come from? Is it best guess, economic indicators, prognosticators – cyclic studies? We would be silly to promote such a view as cyclic studies, yet it introduces a fascinating dimension to a world that has not been completely proven.
New Venture Research continues to monitor the emerging electronics industries with reserve and hope. Please feel free to contact us concerning your concern.
 In 1931 the Department of Commerce assigned Edward Dewey the task of discovering the cause and underlying dynamics of the Great Depression. As Chief Economic Analyst for the Department, Dewey had unprecedented access to resources and information. Dewey’s work on understanding the Great Depression led him to his lifelong calling in cycles. He combined his enormous research in business cycles with research from leading biologists on cycles in nature and in wildlife. Dewey was astonished to discover that cycles of identical length were found in both disciplines and that similar cycles from different areas reached their peaks and troughs at the same time.
Although Dewey’s work was generally regarded as inconsistent with mainstream economists, his research has held great credibility amongst those searching for a new paradigm to understand the inter-relationship of all of life.