By Sharon Starr, director, IPC market research The North American electronics manufacturing services (EMS) industry continued to enjoy positive year-to-date growth in the first quarter of 2019, but growth rates for both sales and orders are slowing, according to IPC’s first-quarter 2019 North American EMS Market Report. Order growth contrasts sharply with last year’s business results. EMS orders in 2018 were 13.5 percent above the previous year. In Q1 2019, orders were up just 1.0 percent year over year. Rapidly slowing growth is also in the forecasts for the industry in 2019 and 2020. The report contains IPC’s own four-quarter sales forecast and a North American market forecast from New Venture Research, and their prognoses as of Q1 2019 are consistent. The first-quarter data showed some interesting differences between markets. First-quarter sales growth was strong for box build and other production, but modest for PCB assembly. Among the industry’s vertical markets, first-quarter sales to the military and aerospace market was up 25 percent this year to date. Sales growth to the lighting and medical/instrumentation markets was also strong. This year the IPC North American EMS Statistical Program began collecting data on sales and orders of wire harness and cable assemblies by EMS companies. Although growth data from this new segment will not be available until next year, we noted with interest that this type of business is heavily concentrated in the smallest company size tier. Among the EMS companies in IPC’s survey sample, wire harness and cable assemblies accounted for nearly 14 percent of the quarter’s sales for companies with annual sales of less than $10 million. No revenue from this type of production was reported by the largest-company size tier in Q1 2019. The quarterly North American EMS Market Report is available free to participants in IPC’s EMS Statistical Program. It is available to others by subscription in IPC’s online store. We welcome your feedback and insights about what may be driving the industry’s business results. Is box-build becoming a larger part of your business? What about vertical markets? Last year, automotive grew the most. This year, mil/aero is off to a roaring start. Are more military equipment makers outsourcing assembly? There is always lots to discuss in this ever-changing industry. For more information on IPC’s market research services, go to www.ipc.org/IndustryData, or contact the market research team at MarketResearch@ipc.org or +1 847-597-2868.

By Chris Mitchell, IPC vice president of global government relations [caption id="attachment_4678" align="alignleft" width="300"] IPC member company executives gathered in DC last week for a round of advocacy meetings.[/caption] Top executives from electronics companies across the United States were in Washington, D.C., last week to call on the Trump administration and Congress to support policies that will drive the electronics industry’s future growth in North America and worldwide. IPC’s government relations team works year-round to advance the industry’s interests in North America, Europe, and Asia. But policymakers are very interested in hearing directly from their constituents – the “real people” who are affected by their policy debates. That is why IPC convenes events like IMPACT Washington, D.C. 2019 and IMPACT Europe, where industry leaders to come together and make our united voice heard in the halls of government. One of the highlights of this year’s IMPACT Washington program was a new report – commissioned by IPC and written by noted economist Shawn DuBravac – which concluded that the USMCA would be a positive step for the electronics sector and should be approved by the U.S. Congress this year. Attendees had a chance to hear directly from the USMCA study author and share their own thoughts on U.S.-Mexico-Canada trade with senior congressional staff who handle trade matters, as well as Daniel Watson, the Deputy Assistant U.S. Trade Representative for North America and one of the chief negotiators for the USMCA. As a follow-up, the House Ways and Means Committee has asked that we recommend individuals from the business community who may want to participate in hearings on USMCA. If such an opportunity interests you, please contact me. That’s just one example of how IPC works with our members to bring our advocacy efforts to life and have a real impact; and there are many more. During the D.C. event, attendees also met with other leading policymakers to discuss the electronics supply chain, EPA regulations, and workforce education. As a group, the executives met with: • Eric Ueland, Deputy Director of the White House Domestic Policy Council, and Scott Stump, Assistant Secretary for Technical, Career and Adult Education at the U.S. Department of Education, both of whom are interested in IPC’s growing workforce education programs; • Mike Molnar, Director of the Office of Advanced Manufacturing (OAM) at the National Institute of Standards and Technology (NIST), who briefed us on the Trump administration’s Strategy for American Leadership in Advanced Manufacturing and our industry’s role in it; • Henry Darwin, Acting Deputy Administrator, U.S. Environmental Protection Agency (EPA), who is working to reduce regulatory burdens and implement leaner, more efficient operations at the EPA; • Majority and Minority staff of both the Senate Finance Committee and House Ways and Means Committee, who will oversee congressional consideration of the USMCA; • Former Indiana senator Joe Donnelly, who has worked with IPC and DOD on defense supply chain issues; and • Former Virginia congressman Tom Davis, a consummate Washington insider. On Capitol Hill, members met with their own elected officials including Reps. Jack Bergman (R-MI) and Lance Gooden (R-TX), as well as influential staff members in the offices of Sens. Bob Casey (D-PA), John Cornyn (R-TX), Ted Cruz (R-TX), Dianne Feinstein (D-CA); Gary Peters (D-MI), Debbie Stabenow (D-MI), Pat Toomey (D-PA), and Reps. Lou Correa (D-CA); John Larson (D-CT), and Eric Swalwell (D-CA). Member executives also had the opportunity to hear from Indiana Senator Joe Donnelly, who praised electronics companies for helping to ensure the safety and success of U.S. military service members; and from former Virginia congressman Tom Davis, a consummate Washington insider, who delved into the forces shaping the politics of 2019 and 2020. Participating member companies included Calumet Electronics of Calumet, Mich.; Chemcut of State College, Penn.; Eagle Circuits of Dallas, Tex.; Juki Automation Systems of Fremont, Calif.; Heller Industries of Florham, N.J.; Lockheed Martin of Orlando, Fla.; Summit Interconnect of Anaheim, Calif.; STI Electronics of Madison, Ala.; TTM Technologies of Sterling, Va.; Uyemura International of Ontario, Calif.; VirTex Enterprises of Austin, Tex.; and Zentech Manufacturing of Windsor Mill, Md. To all who participated, thank you! Your active engagement has made a huge difference in advancing our industry’s future success. We’ll be in touch with follow-up activities. To those of you who missed this opportunity but want to be in the loop on IPC’s government relations efforts going forward, please check out these options and let us know your interests. We have a robust, year-round agenda of advocacy activities, and your participation in those efforts would be welcomed and valuable. VIEW PHOTO GALLERY

IPC’s Emerging Engineer program provides mentoring and training to assist engineers early in their careers. John Mitchell, IPC president and CEO, explains the benefits in this new video. https://youtu.be/QqdtqkPfDU8

By Denny Fritz, Fritz Consulting We keep hearing that Asia is all consumer and automotive electronics and North America and Europe are all high reliability/long life. The findings in IPC’s PCB Technology Trends 2018 study show that these regions are not as different as expected, and the differences we do see are interesting. There are small differences in rigid board layers, line widths and materials. A bigger difference shows up in flexible circuits where there is more low-layer count flex going into consumer electronics. True, North America and Europe have more rigid construction boards going into long-life (11 to 25+ years) products, pushing reliability. HDI construction is larger in Asia, as expected, but certainly not unknown in North America and Europe. North American and European OEMs specified significantly more buried vias than Asia. This could reflect either better acceptance of sub-laminations or more “any layer via” construction(not needing sub-laminations) in Asia. But, as Asia produces eight times as many boards as North America and Europe, Asian fabrication is quite capable of meeting the buried via needs of the other regions. The study also shows that investment in direct imaging and AOI are the top two capital equipment investment priorities of the industry in both regions for the next two years. Likewise, reliability and cost were the top two technical challenges for the industry in both regions. Are these findings consistent with your experiences of making or specifying PCBs in different regions? Do you think the regional differences are getting smaller? We welcome your comments.      

IPC announces the addition of Michael Stone as senior director of sales to its staff at IPC headquarters in Bannockburn (Chicago), Ill. As IPC’s senior director of sales, Stone is responsible for managing IPC’s sales efforts and growth goals. Essential functions of his role include planning, reporting, sales process optimization, sales training, sales program implementation, and recruiting and selection of IPC’s sales team talent. A seasoned leader with more than 25 years of experience in sales management, account development and building highly effective sales teams, Stone was most recently vice president, non-profit sales at Liturgical Publications Inc. where he was responsible for leading all facets of the non-profit sales department to promote revenue growth and account level profitability. “Mike is a passionate sales leader who has built and developed highly effective sales teams during the course of his career,” said Brian Knier, IPC vice president of member success and chief marketing officer. “Mike has embraced the successful sales leader philosophy of clearly understanding his organization’s mission, and dedication to providing the exceptional customer value with every interaction. We are thrilled to welcome Mike to the IPC team.” Stone can be reached at MikeStone@ipc.org or + 1 847-597-2866.

by Chris Mitchell, IPC vice president, global government relations The U.S. Trade Representative (USTR) has published the official Federal Register notice increasing tariffs from 10 percent to 25 percent on another $200 billion worth of Chinese products, effective at 12:01 a.m. on Friday. Meanwhile, the USTR also has added more products to the list of exclusions from the first round of tariffs. The list includes numerous codes for items used in manufacturing, including spools of aluminum and steel and coils; push-button switches; DC electric motors and AC electric motors. U.S. and Chinese officials have met regularly since January to resolve long-standing trade issues with the goal of de-escalating trade tensions and easing the tit-for-tat tariff increases that took effect last year. Officials from both countries have reported progress in negotiations over the past few months, but the U.S. posture changed abruptly last week. U.S. officials, according to news reports, felt that Chinese officials had “backtracked” on key commitments, including IP and technology transfer reforms. In response, President Trump personally decided to increase tariffs this week. Meetings between senior U.S. and Chinese trade officials are scheduled to resume today. We are unlikely to see an agreement this week, as had been the goal. President Trump has suggested that he may also impose new or increased tariffs on all Chinese products imported into the U.S., but a decision that bold would hinge on the President’s estimation of whether a deal can get done and what pressure is necessary to strike it. The Chinese have promised retaliatory tariffs. As always, please contact me if you have concerns, insights or questions.

By Ken Schramko, senior director, North American government relations U.S. export control rules have changed significantly over the last decade, and more changes are expected as policymakers tackle the treatment of new and foundational technologies and respond to geopolitical developments. To help electronics companies comply with these rules and stay abreast of developments, IPC recently held three training workshops in California, Illinois, and Virginia, with the California and Virginia workshops sponsored and hosted by TTM Technologies. Featured speaker Gary Stanley – president of Global Legal Services, PC, and one of the nation’s top legal experts on export controls – gave an in-depth presentation that covered the International Traffic in Arms Regulations (ITAR), Export Administration Regulations (EAR), and Defense Federal Acquisition Regulation Supplement (DFARS) cybersecurity, with a focus on printed circuit boards and electronics. Among the key points that Gary stressed were the following: • Correctly determining the commodity jurisdiction (State Dept./ITAR versus Commerce Dept./EAR) and the commodity classification (U.S. Munitions List versus Commerce Control List) is the most critical step in complying with U.S. export controls, because only then will you know what licensing requirements apply. • Communicate, communicate, communicate! Open lines of communication within your company's functional areas, e.g. legal, sales, procurement, IT, HR, as well as you’re your customers and suppliers, is essential to avoiding export control mistakes. • Measures relating to Trusted Suppliers, DFARS cybersecurity, and export controls certainly overlap, but each regulatory area has its own special requirements. • The most effective export control managers typically display intellectual curiosity, attention to detail, extroversion, and political skills. The last trait is important because export control managers must occasionally say “no” to their CEOs and colleagues, while maintaining their cooperation and support. The workshops also featured remarks by Special Agents from the U.S. Department of Commerce’s Bureau of Industry & Security, Office of Export Enforcement, who addressed, among other things, “red flags” to be aware of when approached by a potential customer, especially if that potential customer is new, foreign, and/or unknown to your company. Other speakers at the workshop presented on IPC-1791, Trusted Electronic Designer, Fabricator and Assembler Requirement; supply-chain risk management within the U.S. Department of Defense printed-circuit-board supply chain; and the DoD Executive Agent for Printed Circuit Board and Interconnect Technology. It is the responsibility of the company to understand all export control rules and regulations and ensure that they are in compliance. That’s why IPC will continue to make educational opportunities available on this topic, and why we encourage you to ensure that your company has solid export-control-compliance measures in place.

By Corey Lynn, Marketing Manager, Education As the IPC Education Foundation establishes student chapters, we have partnered with individuals in the electronics industry and academia. Sometimes we get lucky and find someone involved in both. Kris Moyer, lead engineer at Williams International, is an IPC veteran who chairs and participates in several IPC Standards Committees. Moyer is also a part-time professor focused on PCB design at Sacramento State. A chance encounter between Moyer and IPC President and CEO, John W. Mitchell led to a partnership in developing an online, instructor-led Introductory PCB Design course offered through IPC. The first class just ended. The next class starts on May 7 and is open for registration. The six-week online IPC PCB Design Fundamentals course utilizes interactive webinars, on-demand recorded class sessions, job-specific exercises, and team projects to facilitate mastery of the key concepts required by circuit board designers. IPCEF took the opportunity to ask Moyer about his experience teaching his first IPC class. Moyer responded, “It’s very rewarding to give back to the next generation of board designers by teaching PCB design both at the university level through Sacramento State University as well as through the new IPC EDGE training portal. I have been able to successfully design and build PWBs and CCAs for some of the most extreme environments and a lot of that knowledge flows directly from IPC’s standards and certification activities.” Moyer is also the faculty advisor of our first IPC Student Chapter at Sacramento State. He partnered with student Scott O’Hair, an IPC Emerging Engineer, to start the chapter with O’Hair as the first IPC student chapter president. Scott O’Hair added, “My experience as an IPC Emerging Engineer really expanded my knowledge of the electronics industry. I received a lot of insight from my mentors and attending IPC APEX EXPO give you the chance to see some impressive technology in action. The networking events can open up career opportunities as well and I wanted to share those benefits with my fellow students.” The Sacramento State IPC Student Chapter was the first of six chapters launched during IPC APEX EXPO 2019. Aaron Birney, IPC’s manager of education programs, describes IPC Student Chapters as “a way for students to engage IPC members and learn about real-world manufacturing processes, make connections within the industry, and lay the groundwork for internships.” The IPC Education Foundation, a 501©(3) organization, focuses on strengthening and shaping the emerging workforce by providing educational opportunities, connecting the emerging workforce with industry opportunities, improving the perception of the industry, and offering scholarships to deserving students. For more information on the IPC Education Foundation, contact Birney at AaronBirney@ipc.org or visit www.ipcef.org.

PCB Technology Trends 2018, a new global study published by IPC is now available. The survey-based study shows how printed circuit board (PCB) manufacturers are meeting today’s technology demands and looks at the changes expected by 2023 that will affect the whole industry. Based on data from 74 companies worldwide, the 213-page report presents data on PCB technology and OEMs’ PCB requirements as of 2018, as well as OEMs’ use of emerging technologies. Predictions from both industry segments indicate what these measurements are expected to be five years into the future. The data on OEMs’ use of emerging technologies showed that more than half of those surveyed are currently making products that communicate with the Internet of Things and three quarters make products that depend upon sensor inputs. By 2023, more than half of the reporting OEMs expect at least some of their products to incorporate artificial intelligence and more than one-third expect to make products that interface with humans via neural networks. Interesting regional differences emerged on the use of blind vias, which are more commonly specified by OEMs in North America and Europe than in Asia. The use of stacked vias by PCB fabricators is also more prevalent in Asia today, but fabricators in all regions expect the use of stacked vias to grow, displacing staggered vias. Asian PCB fabricators are also leading the way in the use of printed electronics, which is expected to grow in all regions by 2023. Data on board properties cover thickness, layer count, density, line width and spacing, via diameters, aspect ratios, I/O pitch, via design, blind and buried vias, and thermal properties. Use of materials looks at rigid, flexible, stretchable, metal core, loss characteristics and surface finishes. The PCB industry’s use of special structures covers embedded components and chip packages, and its use of printed electronics includes 3D printing and e-textiles. Survey participants’ comments on compliance and technical challenges and trends are included. In addition, the data in the report are segmented by two regions — North America and Europe in one segment, and Asia in another segment — and by two types of products — installed and mobile. PCB Technology Trends 2018 is available to IPC members for $675 and $1,350 for nonmembers. For more information or to purchase the report, visit IPC’s Online Store.