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Publisher's Executive Council Interview
December 31, 1969 |Estimated reading time: 7 minutes
SMT Magazine's Publisher's Executive Council consists of 38 electronics industry executives hand-picked by publisher Jim Collins. They share their expertise and insights with our editorial staff and act as a sounding board for new editorial concepts and projects. These individuals also contribute much to the industry in general, working as leaders within their companies. This month's Publisher's Executive Council Interview features one of the industry's leading innovators: AIM Solder's Rick Black.
SMT: To begin, please explain your company's position within the surface mount industry.
BLACK: AIM is a full-line, global provider of leading-edge attachment materials to the electronics industry. We are a fast growing company in our field, and have arrived here by staying focused on what we understand: metallurgy, chemistry and materials processing.
SMT: What is AIM's fundamental business strategy?
BLACK: We concentrate on doing the "routine" things better. Our rapid delivery lead times and unparalleled technical support are examples of value-added services that instill and preserve loyalty among our customer base. AIM wants to be regarded as a supplier that is easy to do business with.
SMT: How has the globalization of surface mount markets affected your technology and business decisions?
BLACK: Since 1996, we have set up localized manufacturing sites for our value-added materials. We currently manufacture in Canada, the United States, Mexico, Brazil, Hungary, Scotland, Spain, Belgium, Italy, Australia and South Africa. We are in the midst of setting blending operations in South Korea, and expect to have two more Asian manufacturing sites operational by the first quarter of 2001. From a technical viewpoint, we understand that our customers work with different equipment types, in different environments and with varying degrees of process expertise. In terms of new product development, we always try to create the widest possible operating window for the customer.
SMT: What is the most critical issue for solder materials suppliers today?
BLACK: The ability to service large multinational customers with high quality, consistently manufactured, competitive products on a global, localized basis. Those who cannot eventually will be forced out of business or relegated to the sidelines.
SMT: What has driven recent developments in surface mount soldering materials?
BLACK: The push for lead-free solders from Japan and Europe has pressured the industry to take this issue more seriously than ever. That certainly is where most of the "buzz" is today. Additionally, more stringent performance demands constantly are being placed on SMT materials, due in part to ongoing advances in our customers' products, as in the case of fiber-optic telecom networking gear. Miniaturization, new chip package types and high Gigahertz radio frequency (RF) product developments are just a few issues that materials suppliers must deal with if they want to stay competitive.
SMT: How have your customers' needs/demands changed over the past five years?
BLACK: Today's customers are better informed about what they need and expect, and how much they are willing to pay for it. This is an outgrowth of information spread through the Internet, as well as increasing competition among materials suppliers. Almost all of our large and mid-sized customers have global supply and support needs, and they expect suppliers to handle more of the relationship logistics than they have in the past. AIM now offers in-house engineering support, material handling training courses for line personnel, vendor managed inventory systems and waste reclaim programs to customers of all sizes. In the past, services of this nature generally were only offered to the largest clients.
SMT: How has AIM responded to manufacturers outsourcing printed circuit board (PCB) assembly? How are the demands from electronics manufacturing services (EMS) companies different than from OEMs?
BLACK: One aspect of our response has been to set up manufacturing operations worldwide, enabling us to better service the top tier EMS suppliers that continually acquire our OEM customer base. Our big-picture sales management strategy is geared toward dealing with the outsourcing trend and understanding how we can benefit from it.
EMS providers typically run lean and generally do not want to be treated as a testing lab by materials suppliers. Unlike the typical OEM customer, many EMS companies expect vendors to assume the lead in terms of product education and process optimization on the production line. In a way, EMS providers are contracting out some of those requirements to their suppliers, something that makes perfect sense from their perspective. EMS customers operate in a competitive market, and are focused on getting product out the door. As a supplier, if you respect the customer's time, and add value to your products and services, you benefit in the long run. Any selling price reductions will be more than offset by significant volume gains and the security of a long-term partnership with your customer.
SMT: Who is responsible for research and development (R&D) efforts in this equation? What is the supplier's role in the OEM/EMS partnership?
BLACK: R&D normally is the supplier's responsibility but as the EMS industry continuously evolves from its "board-stuffing" roots and adds design and test capabilities, joint work at the development level becomes critical. Design for manufacturability is the key here. The feedback and cooperation developed with customers is valued. The depth and quality of this shared experience with our client base enables us to improve our product offering, and exceed our customer's expectations.
As a supplier, it is incumbent upon us to act as a link between the EMS provider and the customer we both share, namely the OEM. Input is essential at all stages of manufacturing: design, product qualification, assembly, test and final build. Each of the three parties must communicate well for the process to flow smoothly.
SMT: How does lead-free SMT assembly affect solder materials suppliers?
BLACK: Unlike the situation today, where most SMT assembly is done with two main alloys (Sn63/Pb37 and Sn62/Pb36/Ag2), the lead-free technology evolution likely will result in a plethora of alloys used at the consumer level. Full-line solder materials suppliers will need to offer all these alloys in all their various forms bars, wires, pastes and preforms. Additionally, more demanding assembly requirements, such as different melting temperatures and reflow profiles, will force solder suppliers to develop chemistries that can withstand a range of process conditions.
SMT: What steps has AIM implemented to address environmental issues that affect the global PCB industry?
BLACK: In 1991, AIM was one of the first companies to develop a true no-clean solder paste. In 1992, we were the first to come out with lead-free recyclable metallic jars and tubes for solder paste. In 1994, we developed the CASTIN alloy, which has been acknowledged by the industry as one of the premier products on the market, and since has been licensed to five other solder companies. This alloy is available in all common solder forms and can be used at the component, bare board and assembly levels, resulting in a true lead-free end product. We also have offered volatile organic compound (VOC)-free liquid fluxes since the early 1990s. AIM is fully licensed to collect, transport, store and handle solder-related waste generated by our customers, and we currently are in the process of becoming ISO14000 certified.
SMT: Does AIM participate in industry standards development through consortiums or associations?
BLACK: We always have participated actively in organizations dedicated to improving the electronics industry. AIM was a key member of the Solder Alloy Task Group in the late 1980s, which developed the original IPC-J-STD-006, specifying the requirements for electronic grade solder alloys. More recently, we have participated in the IPC's Lead-free Roadmap Committee, as well as with organizations such as HUG, the EMPF and the SMTA on various projects, to name a few.
SMT: How would you characterize business today?
BLACK: We are having our best year ever in 2000. Volumes are up significantly across our entire product line. We continue to exceed the growth of the underlying SMT industry, and I would attribute this to the quality, dedication and performance of our people. As long as the general economy stays healthy, we expect continued strong growth in the future.
SMT: Where is the surface mount industry headed over the next few years?
BLACK: From a technical perspective, the continued push toward smaller, faster, more reliable hardware will require ongoing improvements in product and performance from all suppliers.
From a commercial viewpoint, the consolidation seen in other sectors over the past 10 years is evident in our industry on a daily basis, as OEMs turn over the business of building product to EMS providers. We believe that this trend will continue unabated for at least another five years, with the next major push coming in Asia. For every supplier to the SMT industry, the challenge is to manage a global build-out of key capabilities on a consistent basis, while at the same time controlling costs, as this remains a very competitive industry from any vantage point.