Production equipment makers keep flag flying for industry

Production equipment makers keep flag flying for industry
The feeling at this year’s Nepcon Electronics Exhibition in Birmingham was one of confidence from the production equipment suppliers and ATE firms – but the mobile comms sector was not so sure. Richard Wilson reports British manufacturing may be teetering on the edge of a recession but the signs are that the electronics sector may have one or two new markets and technologies up its sleeve, to protect itself when the going gets tough. “This industry is certainly not going off the edge of a cliff,” was the comment from one production system supplier at the Nepcon Electronics Exhibition in Birmingham. This view was repeated again and again by PCB production system suppliers and automatic test equipment (ATE) firms alike. Government figures may warn of zero growth in manufacturing as a whole this year, but the commonly held view is that the electronics production equipment market, which is so dependent on the capital investment plans of OEMs and contract manufacturers, will grow at 10 per cent this year. The key factors seem to be the pressure on mobile phone manufacturiers to invest in new production technologies like chip-on-board component placement and automatic optical inspection systems. But there are already signs of the ramp up of production for digital TV set-top boxes and sets in readiness for the launch of digital television services at the year end. Keith Fairchild, north European operations manager at GenRad, is optimistic about the current level of capital investment by manufacturers, particularly in the contract manufacturing sector which is bouyant. “It is not slowing down this year,” said Fairchild. “Contract manufacturers are very strong, it is not uncommon for them to talk of 30 per cent growth.” At pick-and-place machine supplier Philips EMT, business development manager Peter Bayes said the UK business has seen a very good first quarter, which he attritubutes to strong demand from telecommunications OEMs, but there is also business from the digital TV sector. “We are starting to see the affects of the digital TV factor already,” said Bayes. Ian Henderson, European mangaing director of Quad, another pick-and-place specialist, makes the point that several large OEMs in the UK are also investing in new boarding building technologies which support techniques such as chip-on-board and multichip modules. In a sense manufacturers in the mobile phone sector or digital set-top box business have little choice but to invest in today’s state-of-the-art production machines if they are to bring the right products to market, in terms of size, performance and cost, next year. “People are not afraid to invest for the future,” said Fairchild. Manufacturers are being forced to invest in placement machines for fine pitch packages like micro ball grid array as well as X-ray and optical inspection systems. Bayes also said he had several people at last week’s Nepcon show looking for tiny 0201 surface mount component placement capability. So the UK electronics manufacturing sector is not about to fly off the edge of a recessional cliff if the confidence of the production equipment suppliers and ATE firms is anything to go by. But there are just one or two niggling signs that the all-important mobile communications market sector may be tightening its collective belt. One power supply manufacturer, which had a booming year in 1997 – helped by the UK mobile phone manufacturers, has seen a definite tightening of the market in the year’s first three months. This is the first evidence that the mobile phone makers are rescheduling orders as they use up expensive inventory. Next week’s Distribution Special Report in EW will also highlight the continuing weakness in parts of the UK semiconductor market.


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