ByÂ Dr. Phil Garrou, Contributing Editor
More on the ASE / SPIL â€śholding companyâ€ť
In IFTLE 289, I described the formation of a holding company to reach a peaceful merger of ASE and SPIL. After a week at the recent ECTC, I have concluded that maybe the merger will not be so peaceful after all. Rumors abound that SPIL is still not a happy camper.
While both sides are awaiting legal Oks, reportedly from Taiwan, China and the US, I hear that the holding company board will be composed of 14 members. 9 will be from ASE, 2 from SPIL and 3 from the outside. Hummmâ€¦â€¦.still sounds like an acquisition to me. Wonder who will be running the show in this operation? If anyone feels that is not correct, feel free to comment.
No Resisting Consolidation
My blogs on consolidation in the Microelectronics industry started way back in the predecessor to IFTLE, perspectives from the leading edge or PFTLE, which ran for > 3 years in Semiconductor International. When I saw AMAT making acquisitions of back end of line equipment companies it became clear that consolidation was underway.
In IFTLE 195 (June of 2014), I explained the 4 stages of a Business cycle as discussed thoroughly in the Harvard Business Review. These stages have held true throughout history for planes, trains and automobiles and every other industry that has ever existed on this planet. Microelectronics is no exception, it is not beyond the control of the basic laws of economics.
The best examples of this in our industry has been DRAM and hard disk drives. They have run their course and arrived at stage 4 of the business cycle where the top 3 companies claim 70-90% of the market. It was inevitable and it happened.
Our growth rate for many segments of the industry are now following the GDP (i.e we are a mature industry in stage 4 of the business cycle) as shown in the IC Insights slide presented at the recent IMAPS Device Packaging Conference. IC growth is now 96% in correlation with GDP.
The 4 stages of the business cycle notes that growth for stage 4 companies must come from spinning off new businesses or buying into aligned fields. In our case that may be the front end buying up the back end and/or foundries buying up the â€ślucrative segmentsâ€ť of the packaging industry. This will also hold true for materials and equipment suppliers, conferences and everything else in our microelectronics infrastructure.
Supplier consolidation was evident at the ECTC exhibits this past week. Going past the Dow Chemical, Dow Corning and HD Micro booths it struck me that next year there may be only be one booth and probably fewer attendees from the newly merged company (assuming the legal hurdles are met). While Dow Corning (the JV between Dow and Corning Glass) was included in this merger of equals, it is currently unclear what happens to HD Micro (the Hitachi Dupont PI JV) . While Dupont and Hitachi were never really competitors in the rest of their electronics business, Hitachi and Dow are (mainly through the R&H operation now part of Dow). So will Hitachi or Dow/Dupont buy out the HD JV ?? or will it just stay as it is?? No one seems to have that answer.
ECTC 2016 the 66th ECTC
AlanÂ Huffman of RTI Int. presided as the General Chair of the 66th ECTC Conference in Las Vegas week before last. The ECTC Conference is the flagship conference of the Components, Packaging and Manufacturing Technologies (CPMT) society of IEEE. That name is a mouthful that none but the members really understand. Many favor a simpler name like the â€śElectronics Packaging Societyâ€ť, which, at a high level, really fully describes what it is. This Conference is the undisputed leader in all things packaging. While most other conferences struggle to get the number of presentations necessary to put on their shows, ECTC routinely turns away > 50% of submissions. If you want to know whatâ€™s going on everywhere in the world, in electronic packaging, this is the place to be.
It was started the year after I was born and had been jointly owned by IEEE CPMT and the EIA (Electronic Industry Association) till Bill Chen and I, under our CPMT Presidencies bought out the EIA. Thatâ€™s was a deal that we both are very proud of. It is certainly our legacy to the organization.
Anyway, this years 36 sessions, courses and exhibits covered the entire Microelectronic packaging infrastructure. I will be sharing what I consider key presentations with you for the next few weeks.
2016 CPMT Field Award â€“ Michael Pecht UMD
The highest award honoring technical achievement in electronic packaging is the IEEE Components, Packaging and Manufacturing Technology Society Award – an IEEE Technical Field Award, sponsored by the CPMT Society and administered by the IEEE Awards Board. Past winners include Rao Tummala, CP Wong, John Lau, Herb Reichl, Avi Bar-Cohen, George Harman, Demitri Grabbe and Paul Totta. If you donâ€™t know who any of these leaders are, you need to do more reading in the area. This yearâ€™s winner is Michael Pecht from Univ. of Maryland where he runs the Center for Advanced Life Cycle Engineering and has been a leader in physics-of-failure based electronic reliability. IFTLE salutes Professor Pecht who truly belongs in this elite group.
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