Moving closer to the end of 2014 raises the question of what 2015 may hold for the industry. At the same time, we can also look back at the major themes and demand trends that shaped this past year.
From the perspective of global distributors, we have seen a steady increase in demand for supporting electronics manufacturers and OEMs confronted with rapid market diversification; the need for dedicated, customized inventory management solutions; and international logistics solutions with careful attention to best-in-class, anti-counterfeiting, and functional testing performed in accredited, quality control laboratories.
Global services increase
Electronics manufacturers demand that their global suppliers support inventory movement to and from their increasingly far-flung factories and service centers. Agility and secured supply chains are key for any supplier to meet these demands. Today's global service providers are the industry's leading distributors because of their core strength in moving product around the world and managing the potential for delays, disruptions, and damage. Speed, agility, and quality control are essential capabilities. These form the core capabilities to execute opportune inventory purchases or sales that meet manufacturers' and OEMs' defined goals. Global service means more than just renting warehouse space and hiring operations staff in different regions — it means developing state-of-the-art facilities and supporting needs anywhere in the world.
The increase in demand for global services stems from the current cycle of increased outsourcing in order to meet the demands of rapid market diversification and intensifying competition. Semiconductor and electronics demand continues to grow steadily and extend into once niche markets and regions. These extensions present new challenges requiring support along the supply chain. In particular, the demand includes support for remarketing of products, whether components, assemblies, or IT equipment that might need refurbishing, updating, or reworking, for example. Distributors with deep logistical capabilities and sophisticated ISO 17025 laboratories are in prime positions to integrate the services they provide vertically into a more encompassing, aligned, value-added, global service.
In-house ISO 17025 labs hold the line
One of the most recognized quality standards that an electronics laboratory can be accredited to is ISO/IEC 17025. It specifies general, cross-industry requirements for competency in testing and calibration that provide laboratories a guideline for managing their quality, administrative, and technical operations. Leading global service providers and distributors see accreditation as a key tool in demonstrating the true underlying quality of their analytical testing programs. ISO/IEC 17025 verifies that an electronics testing laboratory has the formal processes in place to guarantee accuracy and reliability, and that its inspectors are skilled and follow formalized processes and procedures. Accredited laboratories can be found by searching the ANSI-ASQ National Accreditation Board or similar accreditation board listings.
Quality is always important, and it is part and parcel of what we see in demand today from electronics manufacturers and OEMs. At the forefront is the demand to ensure that only quality product is delivered, and that extra attention is paid to preventing counterfeit and substandard parts. To provide this level of quality control, in-house anti-counterfeiting, quality inspections, and functional testing are essential capabilities, but they require significant investments in equipment and training. As outsourcing increases, the demand for ensuring quality is underscored, because companies are handing over sensitive and critical inventory management to partners. Trusted partners have the in-house capabilities to meet these needs and provide the immediate, customized solutions to extend manufacturers' and OEMs' market opportunities.
Smith has two such accredited labs. One is at our Hong Kong hub, the first facility in Asia to be accredited to the ISO 17025 standard. The other is our global hub in Houston. It recently moved into a new, 57,199-square-foot facility and is poised to meet the growth in demand for global services and customized inventory management. Equipment, electronic component inspectors, best-in-class processes and procedures, and customized services combine to identify global facilities capable of providing in-house support for the industry.
The sophisticated equipment housed in the labs and the certified experts determine the scope of services that can be offered. To give a concrete example of what leading labs offer, the following is an overview of some of the equipment housed and the services supported in Smith's accredited, global hubs.
Jet etch decapsulation
- Verify die size and manufacturers' logos
- Confirm part numbers
- Inspect die architecture
FocalSpot x-ray machines
- Anti-counterfeit measures
- Verify no voids formed
- Confirm leads and bond wires
- Compare OEM parts to X-ray images
- Microscopic examination of parts
- Detect blacktopping, sanding, oxidation, and retinning
C-SAM acoustic microscope
- Used in non-destructive evaluation and failure analysis
- Collect pulse echo images
- Detect voids, cracks, and delaminations
- Penetrate blacktopping to expose markings
- Instantly capture any area in complete focus
- Extremely high depth-of-field view
- Easy-to-operate integrated 2D/3D measurement system
- X-ray fluorescence spectrometer with a polycapillary x-ray optic
- Automated measurements
- Analysis of coating thickness and composition
- Reproduces view as extremely sharp HD image 40-92X
- Unsurpassed color rendition
- No distortion, delay, or interference
Dynasolve chemical testing
- Identify blacktopping
- Detect sand marks and texture differences
- Expose signs of counterfeiting
- Innov-X Systems x-ray florescence RoHS analyses
- Verify material content
- Detect substances of concern
Bond/shear strength tester
- Measure bond strengths and distributions
- Verified bond strength compliance
- Tests integrity of materials used to attach die or surface mounted passive elements
Solderability test system
- Verify solderability of component leads
- Determine coating durability
- Check usability/aging of product (corrosion/oxidation)
- CPU, memory, hard drives, LCDs, board level, peripheral, and other capabilities
Manufacturer, customized and full-functionality and diagnostic testing value-added services
- Dry packing and packaging
- Tape and reeling
- Barcode labeling
- Hard drive wiping and/or shredding
Beyond visual and physical inspections, global service providers conduct functionality tests to confirm that tolerance levels and specifications match and/or meet manufacturer and customer requirements. Functionality tests are also part of the anti-counterfeiting testing conducted, because these functional tests also reveal whether a legitimate component is being illegitimately substituted for a similar part that has different fault tolerances. For example, industrial parts commonly require tighter tolerance levels and greater operating ranges than consumer parts, because of the different physical demands of the component under more extreme use situations.
Quality is the difference
Quality sourcing extends companies' ability to navigate the global supply chain safely and quickly. This agility provides opportune market positions to secure parts at the best prices, and to process orders through an in-house laboratory testing for quality, functionality, and anti-counterfeiting. Counterfeiters are quick to adapt and change, and they continuously become more sophisticated in how they introduce illegal and substandard parts. Sophisticated in-house labs staffed by trained and certified quality inspectors and engineers who use the latest equipment and following industry-recognized and proven QMS are the best defense against counterfeit parts.
Quality relates both to product and to processes and procedures. Outsourcing will continue to grow, because of the ability for electronics manufacturers and OEMs to extend their market capabilities while maintaining their internal focus on their core. We see many companies contending with how to increase market agility, maintain quality, and keep up with thinning margins from shorter cycles. We see that today's complex market is pushing a return to outsourcing. Companies are looking for support to access inventory management and ERP, competitive sources, and quality networks in order to improve their competitive positions in the market. Providing global services that are backed by certified, in-house laboratory facilities with certified inspectors and industry-recognized quality expertise is proving to be a leading demand as companies reach farther into expanding supply chains and diversifying markets.