PCB Innovators

1. Innovation Among PCB Manufacturers Three Innovators Share Their Story 1

2. INTRODUCTION The printed circuit board industry has a long history of development and advancement. Since 1925 when Charles Ducas first filed a patent for creating an electrical path directly on an insulated surface, PCB manufacturers have risen to meet the challenges of supporting rapidly progressing industries. At every challenge, PCB industry leaders have risen to the occasion and ensured that the best possible solution was developed and implemented. Now, the demand for advanced PCBs has never been greater. Create double-sided PCBs (1947) Fabricate more than $10 billion in PCBs (2000) Ushered in by the Internet of Things revolution and an insatiable consumer appetite for all-things-connected, the PCB industry must once again embrace innovation as a means of meeting marketplace demands. Create multilayer PCBs (1960) Incorporate hot-soldering methods (1970) Develop HDI (High Density Interconnected) PCBs (1995) An overwhelming outcry from many PCB manufacturers is that the industry lacks innovation; that the commoditization of the industry has squashed invention and led to stagnation. At SQMedia, we heard this cry first-hand when we met with industry leaders. Release RS-247X data format (1986) Introduce Genesis 2000 software (1992) However, our experience working within other industries has shown us that commoditization is not a death sentence for innovation. On the contrary, it provides a second round of opportunity; one in which specialized providers that continue to innovate find unbarred success. This is true for both commoditized products such as smartphones and automobiles; and commoditized services such as data storage and air travel. In the industries that generate the highest revenues, commoditization is a common theme – but it has not robbed the best in their markets of the ability to innovate. This eBook is the result of some of those conversations we had with leaders in PCB manufacturing; those who want to see a culture of innovation revived within the industry and who are willing to lead the charge. 2

3. BRIAN PAPER BAY AREA CIRCUITS Bay Area Circuits is a printed circuit board manufacturer located in Silicon Valley. Its focus is prototype work, produced very fast. BAC offers traditional B2B sales as well as an e-commerce store to serve customers interested in smaller or less specialized orders. 3

4. KEY INNOVATIONS Equipment & automation Catering to students and hobbyists Bay Area Circuits has machines that trim hours off the production time, sometimes due to a new process and sometimes due to the accuracy of the machine – getting things done right the first time. They put a lot of emphasis on software and automation, eliminating human error, and supplying real time data to people on the floor. The real time data comes from the customization in the ERP/CRM system. Once the sales team collects information from the client it automatically filters to where it needs to go. This eliminates the human error from entering information multiple times. The same goes for online orders. A client can design a board using DipTrace enterprise software or the free lite version, PCB Creator. Once the design is ready to go, the client prices and orders the board electronically and the order funnels directly to be manufactured and shipped by Bay Area Circuits. This allows students and hobbyists the same speedy and accurate service as larger B2B clients. 4

5. RECOMMENDATIONS Recognize the opportunity presented by the maker movement. $30 “Students can download free PCB design software, design their own board and have it produced for as little as 30 dollars by placing an order on our website.” The company offers additional tools to make their products more accessible as well. They feature an InstantDFM tool on their website as well as blog posts catered to individuals with lower levels of technical knowledge and expertise, just trying to get their feet wet in PCB products. We’ve tried to create things, be it content or pricing, etc., that makes it easy to work with us, and I think these efforts will continue to pay off. Bay Area Circuits also sponsors robotics teams, solar car competitions and the like to promote their brand to STEM students. “We really try to expose the students to our services so that when those students move on and get into the workforce they think of us.” 5

6. CHETAN SHAH FLEX INTERCONNECT TECHNOLOGIES Flex Interconnect started in 1998 and built its reputation as “Solutions Provider” by helping customers with well-designed, highly reliable flex circuits. . The Silicon Valley-based company has experienced an aggregate of 28 percent growth year-over- year, retaining the same specialization for the past 18 years. Flex Interconnect currently focuses on five industries: 1 2 3 4 5 Medical Aerospace Military Industrial Wearable/Consumer Electronics 6

7. KEY INNOVATIONS Increasing efficiencies Keeping up with market trends 1 Shah places a lot of focus on keeping his company lean, cutting down the cost of waste such as scrapped parts, by getting the parts built right the first time, and improving productivity. The company also minimizes operational cost by generating very little hazardous waste by simply using very minimal water in production. Low overhead equates to less risk in a competitive market. Says Shah, “Even when the market goes down, we have enough margin to break even or make a profit. When the market goes up, you’re going to grow rapidly and make a lot more money.” 7

8. 2 The second focus is on keeping current, not simply doing things they have always done, and capturing market share by offering unique solutions. “We have been quite innovative in technology and being able to produce a very broad spectrum of flex circuits that many of our competitors are not able to produce.” This includes working with startups that are innovative and exploring new areas of growth such as Internet of Things. “We have done work for a company that makes smart credit card, another company that makes this product called Vessyl, which helps you monitor how much liquid you are taking in every day. Other wearable electronics products that measure biometrics. We don’t know which of these products is going to eventually be an iPhone.” 8

9. RECOMMENDATIONS You have to be able to give your customer a great experience. Always be responsive to them and bring them valuable solutions. It’s big for a customer to believe in you and become a fan. China can come in with a lower price, but they are never going to be able to offer the upfront face-to- face solution that a local company can. Build relationship. If something isn’t currently buildable, a manufacturer can work with the customer on R&D basis to see what it takes to build it. “Often, the customers will work with us and pay for the development.” Invest in new technology. Flex Interconnect is the first company of its kind to build embedded capacitance in flex, has produced the thinnest rigid-flex in the world, and is the only one currently building stretchable hinged flex. Finding out which way the technology is going, or the next area the customer is moving towards, is key to capturing new market space. 9

10. MIKE VINSON AVERATEK Averatek is a spinout from SRI International and has been in the PCB market for about eight years. The company was founded on a proprietary ink technology and its primary focus is metal coatings for fine line circuitry – building up metal in a variety of thicknesses for conducive traces to be used for electrical circuits. 10

11. KEY INNOVATIONS Adapting to market trends Bringing innovative materials into the industry In 2012, Averatek began using its technology for fine line circuitry, hoping to grow its potential to serve that market. Using an in-house research and development team, it worked to modify its processes to fit the requirements of newer trends, such as flex circuitry. It works with licensees to adapt its technology to the new market, developing new processes to fit their applications, which they can then test out with their own customers. “I think that in terms of the R&D we see being conducted by the major manufacturers, it is not as significant as what we have been able to do with our very small company.” 11

12. RECOMMENDATIONS According to Vinson, the first step in keeping up with the market is recognizing trends, such as miniaturization, that are going to require new techniques and materials. These trends will require thinner and more high performance materials, he said, and “we base our business on the fact that we are bringing innovative materials into the industry.” He admits that the industry is very slow to change, due to the nature of the product. “No one wants to take the risk of damaging the value or reliability of a (PCB). I think it would be a good idea to get around that innovation shyness.” As things become more and more finite, it lends itself to more innovative approaches. This includes technology related to IOT. 12

13. ABOUT OMNI PCB Omni PCB, a technical manufacturer’s rep organization uniquely specialized in the printed circuit board industry, offers engineering support and technology ranging from standard designs to high-end HDI, including 1 mil line and space and stacked micro vias. Specialties include flex, rigid flex, RF microwave designs, and microelectronics with capabilities to the 5 micron level. Omni PCB is also a founding member of Geek-A-Palooza. These regional events provide all aspects of the local electronic industry with a unique networking experience focused on expanding resources and knowledge, building relationships and bringing the industry together in a social atmosphere. ABOUT SQMEDIA SQmedia is a global digital marketing and innovation agency based in Dallas, Texas since 2011. By developing systems that deliver powerful results while lowering marketing risk we effectively increase the overall marketing budget value of our clients. Our unique agency model and a proprietary marketing methodology/ philosophy are the foundation of our results-first, low-risk marketing platform. We work with B2B technology companies for whom our research has revealed a roadmap to a minimum 300% net ROI first year. Our platform is designed to lower the risk of digital marketing by: 1) lowering the cost of digital marketing overall, 2) increasing width and breadth of talent /collaboration and 3) enabling the prediction of minimum ROI prior to a twelve month engagement, then delivering like clockwork. We would love to learn about your business. 13