David Raby, Surface Mount Technology Association (SMTA) interview

VentureOutsource.com talked with David Raby, president with the Surface Mount Technology Association (SMTA). Transcripts from that discussion follow.

VO: Besides RoHS, can you please share what you feel are two current challenges the electronics manufacturing industry is facing? What is the SMTA doing to help industry leaders address these challenges?

Raby: ince the beginning of the electronics industry, consumers have had a simple request. They want their electronics products to be smaller, more powerful, and less expensive. This trend continues as we see MEMS, SiP, PoP, imbedded passive and actives, and even nano technology being incorporated into designs to achieve the form fit needed for new products.

Manufacturing with these technologies is the new challenge.

Some of these products are being used in harsher environments than ever before so in addition to being smaller, more powerful, and less expensive, there are also requirements for electronics products to be more robust and be able to handle extreme thermal conditions and g-forces not previously required.

Several of the SMTA’s conferences and workshops specifically address these advancements in packaging as well as the associated manufacturing issues.

Another, ongoing challenge is the outsourcing of (US) domestic manufacturing around the world. The SMTA is helping industry leaders in a variety of ways with this challenge.

David Raby President Surface Mount Technology Association (SMTA)

First, through seminars and workshops, we attempt to educate industry leaders to the true costs of outsourcing and allow them to network with others in industry who have gone before in this endeavor. We also hold group discussion during our event regarding company IP (intellectual property) issues and cultural differences across regions of the globe, neither of which shows up directly on a company’s bottom line but both can have serious impacts on a business.

Second, both from the SMTA headquarters and at the local chapter-levels, the SMTA conducts carefully developed training programs around the world that help increase the level of electronics understanding and education in industry while also helping to improve the quality of products being built, wherever this might occur.

And finally, through local Chapters, SMTA seminars; workshops, and conferences, the SMTA is educating and encourages industry networking and technology sharing to raise the knowledge and skill level of domestic workers.

VO: How would you rate the electronics industry’s current progress in addressing RoHS deadline requirements? What do you think can be done to help companies unable to comply?

Raby: Slow but progressing.

For several years, the SMTA has been providing information on RoHS compliance issues in a variety of formats and venues. Some companies have worked hard to meet these requirements, some are just beginning to embrace the reality of RoHS compliance, and some are still in total denial.

Companies must first need to ‘want to comply’ in order to be able to properly learn how to build and deliver RoHS-compliant hardware.

I think in many instances, it is more of an attitude and decision than it is a regulatory mandate. Some companies have invested the resources to get it done and are successfully delivering RoHS-compliant hardware into the countries that require the mandate be met. Other companies are still in the questioning and implementation stage. Still, others are just pulling their heads out of the sand at this point and are looking for definitions and answers on RoHS compliance.

The potential for industry interpretations of the ‘how to’, ‘whys’ and ‘when to’ comply are better defined today more than ever. Companies that cannot get a waiver on the RoHS deadline are working hard to get their systems in place. Grace periods have been awarded on an individual basis and some categories defined in the RoHS mandate have been given exemption periods for compliance.

Additionally, companies that do have exemptions are also facing serious issues in being able to secure the components they require in order to build their products. The SMTA provides a working forum for companies that can accept RoHS issues are here for real, understand they need to comply, and are willing to learn from others.

VO: Please tell us about some of the new events and classes taking shape at SMTA. What are you most excited about for 2007?

Raby: There is a lot to be excited about at SMTA in 2007. SMTA Headquarters and the 42 domestic and international chapters conduct programs, workshops, and tutorials based on the needs of our association members.

We conduct the Wafer Level Packaging Conference, the Advanced Packaging Workshop, the Automotive, Industrial, Military & Space Harsh Environment Workshop, the Medical Electronics Symposium, and the Pan Pacific Microelectronics Conference to meet the needs of certain segments of our industry membership.

But, the event I am most excited about for 2007 is our SMTA International Conference and New Technology Showcase in Orlando, Florida, October 7-11. This event features our Association’s flagship conference, which draws attendees from all around the world and combines it with a high-focused trade show for the electronics assembly industry. The conference and trade show are each designed to maximize the time our attending members spend networking and ‘sharing the knowledge’.

VO: In speaking with industry executives regarding technical issues as these are related to the bottom-line, what general subjects / topics tend to surface the most during these business discussions? Are you finding executives to be confident they are addressing the issues discussed, effectively?

Raby: Warranty periods and reliability of fielded systems are big topics due to cost impacts on their P&L. RoHS-compliant systems do not have any track history for returns.

Also the responsibility of cradle-to-disposal responsibility is an unknown cost even though large companies are setting up reserves for these type of returns in the forecast years. How much can they charge customers today for returns for disposal in the future and, how much should one reserve for these types of future expenses and liabilities?

Many small companies do not have the cash flow, or the required discipline, to reserve and estimate the liabilities for future expenses. Meanwhile, large companies are looking to pass these costs onto the consumer but, again, estimating future liabilities is difficult.

Throw into the equation various policy interpretations by different countries on how they want disposal handled and the local and country-based charges become a tough issue to understand and cost-out accurately. Are the issues being addressed effectively? Yes and no. There are plenty of forums and opportunities to discuss the related problems but there are still too many unknowns for anyone to feel absolutely certain they have the correct answer.

VO: What are your thoughts on free trade and global competitiveness in the technology sector?

Raby: I am very much in favor of free trade and global competitiveness but fair trade and global fairness is the real question. There cannot be government subsidies by countries trying to buy their way in. Tariffs are not the answer and neither is import and export taxes and fees.

Free trade is good but there are always those who want to free load a system and thus manipulation is the rule of thumb and not the exception.

Level playing fields are hard to find and China is currently enjoying the growth of cheap labor and a plentiful labor force but their economic growth is also bringing inflation to labor rates and local infrastructure and thus the cost of producing in China is going up.

Already there are some large companies moving into to other countries, from China to obtain lower cost production. (Vietnam and India are two of the choices)

Again, free trade is hard to find, and define, because of the hidden tariffs and taxes and cost of logistics on the overall cost of a product. Meanwhile, things have a way of equalizing in time.

Remember, Japan was once the hot bed. To this point, Malaysia, Philippines, Thailand, Taiwan, and Mexico have all had their turn as well. Business models and economy of scale determine where a product can be built and the return on the investment. Economics always win in the end.

If you could have a dinner conversation with any one person (living, dead, or fictitious) whom would you dine with and what would you want to discuss?

Raby: It’s a tough choice but I would choose Benjamin Franklin. He was a man of many ideas and inventions. I would love to spend an evening with him listening to his stories and, especially, hearing about his ideas and inventions that didn’t quite come to fruition.

As one of the Founding Fathers and one of the authors of the Declaration of Independence and a delegate to the Constitutional Convention, I would love to hear how he envisioned the United States of today, 230+ years ago and, compare some of today’s interpretations of the Constitution with his interpretation at the time when it was written.

I would also love to show him my Blackberry and iPod and hear his thoughts on today’s technology and inventions.

VO: Thank you, David.

Raby: You’re welcome. Thank you.

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VentureOutsource.com, February 2007