Asteelflash on Mil/Aero Challenges, ITAR, and Opportunities

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Asteelflash is a Tier-2 EMS provider with 18 manufacturing sites worldwide, including three sites in North America: Fremont, California (AS9100 ongoing); Raleigh, North Carolina (AS9100 and ITAR certified); and Tijuana, Mexico (AS9100 certified)—with a workforce 5,200 employees.

Founded in 1999, it is one of the fastest growing Tier 2 players among the contract manufacturing industry, being ranked 17th in Manufacturing Market Insider's (MMI) 2015 list of top 50 EMS providers worldwide. The company provides a full turnkey solution from design and engineering services to direct fulfilment to numerous industries including defense, military and aerospace, but also automotive, energy management/smart home devices, industrial, telecommunications and medical, to name a few.

In an interview with SMT Magazine, Albert Yanez, corporate executive VP and president of Asteelflash, Americas, discusses the challenges in the military and aerospace industries, ITAR compliance, and the opportunities in these sectors.

Stephen Las Marias: What are your greatest challenges when it comes to electronics assembly for the military and aerospace markets?

Albert Yanez: Military and aerospace markets present many challenges from a manufacturing perspective and requires a solid quality management system in place with a specific emphasis on how to avoid counterfeit parts and quality issues. This is an area that many EMS providers have issues dealing with when getting ready to enter the mil/aero market.

From a technology standpoint, thermal management remains the most critical aspect of complex electronic assemblies in the mil/aero industry. Your product has to be war ready, and this is not just a play word. The electronic products targeted to the military and aerospace industry are often used in very different environments, and the inners of these products has to be as robust as the outside, making sure the performance is delivered no matter how harsh the conditions: snow, humidity, heat, extreme desert conditions, space, and pretty much everything else.

With the miniaturization of electronics nowadays, it is definitely a challenge to provide the perfect product in an optimized space without compromising on the thermal management systems. More of a design concern yet it can definitely have a huge impact on how hard it is to assemble a given product.

Las Marias: From your perspective, what are the greatest challenges that your customers face?

Yanez: Reliability and time to market. A lot of peers in the industry see the mil/aero industry as a headache because of very long gestation periods. Have you seen the time needed to fully manufacture and assemble an airplane? You can count on delays to be there. But the outcome is often very positive both in terms of experience and in terms of business.

Reliability is a must. And of course everybody will say that reliability is a must for any type of customer no matter which industry they play in, but in my opinion, mil/aero presents a higher level of requirements on that matter and therefore more resources in place to sustain this level of performance.

Las Marias: How does Asteelflash help customers address those challenges?

Yanez: Speedy time to market is one of our core strengths. Our ultimate objective is to make sure our customers are able to tackle the growth they expect with our support on overachieving on delivery dates, reactivity on design changes and proactivity on process improvements. Having a seasoned EMS partner is critical in the aerospace market. The certifications are one thing. The flexibility on the floor is another, one we are proud to put forward on a daily basis.

Las Marias: Are lead-free components still causing problems in the supply chain?

Yanez: I think it is safe to say that it was a challenge a few years back especially in the transition phase from leaded to lead-free components without compromising on the reliability of the products. Again, related to the challenges of field reliability and resistance to extreme conditions, the military/aerospace products require a level of reliability of more than 20 years, very different from the consumer electronics segment for instance. Lots of researches and tests have been conducted and specific groups and associations—such as the Aerospace Industries Association (AIA), the Avionics Maintenance Conference (AMC) or the Government Electronics and Information Technology Association (GEIA)—took leadership in making this transition easier and efficient. Some researchers even concluded that lead-free components and assemblies could provide better levels of reliability to a certain extent.

Las Marias: Your company is compliant with ITAR. What are the greatest challenges with ITAR?

Yanez: Our facility in Raleigh-Morrisville, North Carolina, is ITAR certified. Given the number of years of compliance and certification, it is no longer a challenge but has actually become a routine to sustain that level of compliance. Resources in place and integration of the ITAR restrictions into our business model were definitely a challenge in the early days but they've been overcome for several years now by maintaining discipline and keeping each and any of our employees focused and vigilant to the rules.

Las Marias: According to our survey, ongoing compliance with ITAR is a challenge. Do you agree?

Yanez: It definitely can be if you don’t create very solid procedures, commit to them—from top to bottom—and follow them on a daily basis. Without that level of commitment starting from the top management, it can be very difficult to stay ITAR compliant.

Las Marias: How do you ensure your company's continued compliance with ITAR?

Yanez: Putting the relevant resources in place is key. At Asteelflash, we have developed procedures that are directly based on ITAR requirements. We have also appointed a full time dedicated ITAR Officer at each plant who reports directly to our plant managers, conducting self-audits throughout the year to insure compliance at all times. This provides us confidence that the recertification process will always be a positive outcome.

Las Marias: What opportunities are you seeing in the military and aerospace sectors?

Yanez: In the military sub-segment, we see tremendous growth in drones, unmanned vehicles and man-portable electronics. The latter is actually set to reach $19.6 billion by 2019 and we already feel it with our existing customers, but also through ongoing NPIs currently taking place at our facilities now.

In the aerospace industry, all the products we often talk about are still up to date (beacons, radars, security portals, data processing and telecommunication products, seats electronics). But we definitely have seen an increasing demand for on-board infotainment/avionics products as well as electrical related assemblies (battery management systems, inverters, and power conversion systems) aimed at powering airplanes.

To read this entire article, which appeared in the September 2016 issue of SMT Magazine, click here.


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