TTM President Thomas Edman on the Global PCB Market, Technology, and More

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The TTM and Viasystems merger put the PCB industry on notice last year when it created one of the biggest powerhouses in the world. At this year’s HKPCA and IPC show, Barry Matties met with TTM Technologies President and Chief Executive Officer, Thomas Edman to get his views on the market, technology, the culture of TTM and even the Trump effect.

Barry Matties: Thomas, please start with an overview view of TTM for our readers.

Thomas Edman: We are now the largest manufacturer of rigid printed circuit boards in the world and the second largest overall, and that's mainly due to the acquisition of Viasystems, which nearly doubled the company's size to about $2.5 billion in revenue. We have 25 production facilities worldwide, three of which are smaller assembly operations, and the rest focus on manufacturing printed circuit boards.

Matties: Great, how do you look at the markets?

Edman: When TTM looks at the markets we serve, we're very focused on what our end-markets are requiring and what our customers are requiring. If you look at technology trends in the industry today, a lot of focus is on miniaturization and really shrinking down the space and improving information content. A lot of emphasis is on speed, and sensing applications are becoming more critical as well, certainly in the automotive space.

So as we look at process technologies that we need to bring in, we're focused on reducing lines and spacing. That's a regular cadence of improvements that we're involved with. We're also very focused on continuing to improve our RF processing capability, both in the U.S. and Asia. Asia primarily for automotive and U.S. primarily for aerospace and defense.

Matties: Do you see different challenges between the regions?

Edman Of course, there are slight differences between the regions, but they deal with the same  trends. Rather than regions, you see greater differences between end markets. Overall, if you look at the industry, there is a push that starts with the smartphone area. There has been a lot of advancement in technology requirements coming from that end-market with a very rapid pace of development and  very short product life cycles. So this area  drives the pace of our technology development. Over time these developments  into our other markets such as automotive, networking communications and aerospace and defense.

Matties: When you look at challenges in the process, what about the actual manufacturing technology? We're seeing a lot more automation here and in China. Obviously there was a lot of labor thrown at manufacturing but now that's all changing.

Edman: That's absolutely right.

Matties: How has that impacted TTM?

Edman: Very similarly. As we look at our capital allocation, about four to five percent of our revenue is spent in capex, and as we look at that capex split, about a third of that capex will be spent on maintaining our factories including spending to meet  environmental requirements in our facilities.  About a third of it is going to be on capacity requirements, and then about a third will be spent on technology  requirements.

If you look at that third piece  that's where we're going to be driving process developments, some of which require automation.

Matties: When you look at the technology in the circuit board fabrication process, what do you think is the area that shops should really focus on? Areas with the greatest return?

Edman: I think there are big challenges around registration and so we're spending money on improving our registration capability. Plating technology always is an area of process development focus for us. Then I would say material characterization and material qualification, which is not core to the manufacturing process but is an important area where we bring  value to our customers.

Matties: When you look at delivering a board on-time to spec, is that just the ante to play the game?

Edman: Yes, but due to increasing complexity of boards combined with shortened product cycles, makes it a challenge for many except for a handful of suppliers. We, as a supplier, need to provide a high quality printed circuit board at a competitive price, and to stay on the technology treadmill to improve our boards. But it's the areas around the printed circuit board where we can also add value to the customer.

Matties: The self-awareness to do that, too—you don't always see that.

Edman: It's critical for us and for our business model. We have to be able to provide value to our customers up front. When our customers’ engineers are starting their design and looking at their design requirements, we want to engage so that we can add value to that process. This means interacting early at the engineering level and during  material qualification. We have the capability to provide this service out of both our North American and China operations. This allows our customers the option of ordering their prototypes out of the region that best meets their needs. We're doing the quick turns and NPI work, helping them to scale to the pilot manufacturing stage, no matter where this needs to be  done, and then we're able to transition into volume production in Asia. For us, that's the value proposition.

Matties: It's a value proposition that carries all the way through from engineering to volume.

Edman: Through to volume, and for our customers, we're trying to meet the customer's needs whether they're the engineer who is up front in that process or the sourcing organization so that the engineer knows that they can source from TTM and that the sourcing organization is comfortable with the eventual ability to carry  that product through to volume with TTM.

Matties: As we know, a lot of OEMs come in and say “we want this particular material,” but if they're coming to TTM, are you saying that they are surrendering some of that thought process to you?

Edman: That's correct. Of course we partner with the laminate  suppliers as well, and the goal is to be able to provide value to the customer as they make that decision. Now, the customer is going to do their own evaluation and then there's a sharing of data that goes on. We compare data  and then the customer makes a decision on what laminate they're going to go with. But certainly our goal is to be part of that decision, because the worst thing that happens to us as a printed circuit board manufacturer is when that decision gets handed to us and we are asked to process an unfamiliar material.

Matties: Is the reason OEMs went to the laminate suppliers because there was a void of knowledge from the fabricators to begin with?

Edman: I think that may have been part of the historical reason.

Matties: There's a marketing side to it as well.

Edman: If you're a laminate provider, it's in your interest to also go around the fabricator and be able to influence the buying decision of the OEM which is similar to our work with our EMS customers. We have excellent relationships with  our EMS customers, but we work directly with the OEMs so that they are spec'ing in our PCB as we ship to the EMS customers.


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