Estimated reading time: 6 minutes

EPTE Newsletter from Japan--KPCA Show 2008, Supplemental

In an earlier newsletter, I wrote about the turmoil at the executive level within the Samsung Group. The chairman of the company, and his son, announced their resignations, effective April 22, 2008(the day before the KPCA Show 2008 in Seoul), shouldering the blame for political and financial scandals within the company. Many conversations and speculation about the scandal took place during the show; however, representatives from the Samsung Group remained reticent. Many within the industry were not so reluctant or restrained to comment on the situation, and felt this latest development was just the tip of the iceberg. Most expect restructuring within the Samsung Group in the near future and, possibly, more dismissals as additional facts about the scandal come to light.

After the exhibition, the Japanese and Korean media provided more details. The public prosecutors office reported that over US $4 billion was illegally funneled for personal and political gains. More than fifty people from Samsung's management team were indicted without arrests. One newspaper reported that several attorneys, citizens and members of Catholic churches condemned the scandal, viewing it as a political deal between the government and the economic giant in Korea.

Unfortunately, dirty dealings inside Far East countries including Japan, Korea, Taiwan and China are commonplace. Many view bribes and "entertainment" as the cost of doing business with some governments or public organizations.

This fact was especially true many years ago in Japan. The business climate has improved over the last twenty years relative to "greasing everyone's palms," especially within the consumer or electronics industries. The margins in these industries are so tight, and international competition is so abundant, that there is not enough profitability to create a slush fund earmarked for politicians or government officials on the take. Many Japanese citizens remain skeptical and still believe bribes are paid at construction or government projects; especially when the tax consequences from these projects reach lucrative levels.

Personally, the Samsung scandal caught me off guard. I perceived their management team as having the highest standards in the industry. Several years ago, I had a face-to-face meeting with a technical auditor for vendors from Samsung. Once the audit meeting concluded, I invited him to have a dinner, but he refused, explaining it was Samsung's policy that employees cannot accept anything of value from their business associates--including golf outings, dinner engagements or other goods that could compromise business ethics. He was proud of the company and compared their qualities to other Korean companies not so highly respected. I was very impressed and believed Samsung did maintain a high level of standards. Unfortunately, many employees, as well as I, feel victimized from the unscrupulous behavior of Samsung's executives.

The Korean electronics industry has evolved over the last twenty years, and is now a significant player in the global electronics market. In my opinion, Korean companies must maintain a high level of integrity to continue their climb and become global business leaders.

I have had a few bad experiences with other Korean companies, yet Samsung remains one of the better companies with which to have a business association.

I provide consulting services to many Chinese companies, and advise them to learn from the mistakes of companies from Japan and Korea--to not let history repeat relative to their global business quests. Most agree with my logic, but do not really listen to what I say. Unfortunately, many of these Chinese companies are heading down the same rocky road as their Korean and Japanese peers did many years ago, but the situation looks far worse in China.

Dominique K. Numakura

DKN Research, http://www.dknresearch.com/.

Headlines of the Week

(Please contact haverhill@dknreseach.com for further information on the news.)

1. Elner (Major PWB manufacturer in Japan) 5/7The company will invest 4 billion yen to enlarge the manufacturing capacity of build-up processes in its Shirakawa plant up to 500% in the next three years.

2. Mitsubishi Gas Chemical (Major PWB laminate supplier in Japan) 5/14The company will commercialize its new laminate series of BT resin for flip-chip substrates in memory devices.

3. Sanyo Semiconductors (Device supplier in Japan) 5/14The supplier has commercialized "IMST Aluminum Base Substrates" for hybrid IC substrates in LED modules.

4. Sony Chemical (Major flex circuit supplier in Japan) 5/14The company has increased the manufacturing capacity of their advanced multi-layer rigid/flex facility to 11,000 square meters per month.

5. Hitachi Chemical (Major electronic material supplier in Japan) 5/14The supplier will commercialize more advance laminates for IC substrates, automobile circuits and multi-layer boards--encompassing more than 50% of the company's entire laminate business.

6. Ibiden (Major PWB manufacturer in Japan) 5/14The company will invest 20 billion yen to build a new plant for the build-up multi-layer board, "EVSS," in Malaysia. The new plant will begin operations in the summer of 2009.

7. Panasonic F. S. (Assembling machine supplier in Japan) 5/19The supplier has commercialized a new series of insertion machines--AV131, JV131 and RL131--for components with wires, featuring a high speed of 0.08 seconds per component.

8. Casio Micronics (IC packaging company in Japan) 5/16The company will be a full subsidiary of Casio Corporation as of August 1, 2008. The company's tape circuit business was previously sold to Hitachi Cable.

9. Silver Seiko (Equipment supplier in Japan) 5/21The company has begun volume production of flexible circuits at its subsidiary Soken in Japan, Taiwan, Korea and China.

10. Kyoden (Major PWB supplier in Japan) 5/21The company will acquire the PWB business of Airex and create a new subsidiary, Kyoden Fine Tech.

11. Hitachi Chemical (Major electronic material supplier in Japan) 5/21The supplier will invest 3 billion yen to increase the manufacturing capacities of HDI PDB by 20% at its Singapore plant.

12. Hitachi Cable (Major tape circuit manufacturer in Japan) 5/21The manufacturer plans to reorganize its entire tape circuit business--utilizing facilities acquired from Casio Micronics and targeting surplus income in fiscal year 2009.

13. Yano Keizai (Market research firm in Japan) 5/21The firm estimates the market size of electronic paper in Japan will reach US $700 million in 2012.

14. JUKI (Assembly machine supplier in Japan) 5/21The supplier has rolled out a new set of high-speed mounting machines: "FX-3" and dispenser "KD-2077." The optimized mounting speed of the set is 74,000 chips per hour.

15. Seiko Epson (major electronics company in Japan) 5/21The company has unveiled a 13.4" size electronic paper with a high resolution of 385 ppi.

16. Idemitsu (Major petroleum chemical supplier in Japan) 5/22The supplier has co-developed a new blue organic LED device with the highest efficiency of 28.5% in conjunction with Sony.

17. Seiko Epson (major electronics company in Japan) 5/23The company has unveiled a new design concept for instrument panel displays for automobiles introducing OLED technologies.

Interesting Literature Concerning the Packaging Industry

Articles from DKN Research

1. "Screen Printing for High-Density Flexible Electronics," Robert Turunen, Masafumi Nakayama and Dominique Numakura, Printed Circuit FAB, October, 2007, http://pcdandm.com/cms/content/view/3846/95/.

2. "Total Process Solution for the High-Density Multi-layer Flexible Printable Electronic Circuits," (Japanese only) Dominique Numakura, Denshi Zairyo, October, 2007.

3. New "Roll to Roll Production of Flexible Circuits, Possibilities and Issues," Dominique Numakura, Joho Kiko, Tokyo, March 2008 (Japanese only).

4. "Coombs' Printed Circuits Handbook, 6th Edition, Part 15-Flexible Circuits," Dominique Numakura, McGraw Hill, New York, September, 2007.

5. New "Screen Printing Process for High Density Flexible Electronics," Robert Turunen, Dominique Numakura, Masafumi Nakayama and Hisayuki Kawasaki, IPC Printed Circuit Expo/APEX and the Designers Summit, April 2008.

6. New "Global Flexible Circuit Industry, Market Trends and Technology Trends by Applications," Dominique Numakura, International Symposium of KPCA Show, April, 2008 (English PowerPoint file is available).

From the Major Industry Magazines

1. "Using Statistical Tools in Electronics Manufacturing," Rob Emery and Craig Hamilton, CircuiTree, May 2008.

2. "Evaluating Manufacturability and Operational Costs for New Conformal Coating Processes," Jason Keeping, Circuits Assembly, May 2008.

3. "Working with Large, Thick PCBs," Jennifer Nguyen, Robert Thalhamer, et al, SMT, April, 2008.

4. "Don't Let Your Signals, STUB THEIR TOES," Eric Bogatin, Printed Circuit Design & FAB, May, 2008.

5. "DRIE for MEMS devices," Michel Puech, Jean-Marc Thevenoud, et al, Advanced Packaging, April, 2008.

7. "Process requirements for high density SMD placement," Sjef van Gastel, Global SMT & Packaging, March 2008.

8. "Microflex Circuit Applications for Medical Devices," Luke Volpe, MD & DI Magazine, January 2008.