Users to Leverage on Efficiency of Assembléon’s Machines

Amid the issues that mired the U.S. economy in the past months, there are still good reasons why it is more advantageous for an electronic manufacturing company to maintain a production base in the country. Among the factors include the high protection for intellectual property (IP) and the wide presence of automotive assembly factories in the United States that require a strong supply base. Also, the introduction of highly efficient and high-performance machines can help manufacturers to be cost competitive as the machines can reduce the number of operators require to man the production process.

Leo van de Vall, President and Chief Executive Officer of Assembléon America, Inc.

At APEX 2008 in Las Vegas, Nevada, AEI interviewed Leo van de Vall, President and Chief Executive Officer of Assembléon America, Inc., and he discussed in detail these factors. He also introduced the company's strong lineup of machines that can support electronic manufacturers in the U.S. increase their competitiveness.

AEI: Despite the production shift to China and other Asian countries, why do you choose to stay in the U.S. market?

Van de Vall: Although a lot of electronic manufacturing (companies) in the past migrated to Asia, it has now stabilized, and there are a lot of good reasons for that. In fact, more and more are coming back to the Americas. I can mention several specific examples. First of all, number
of applications never left the U.S., like military, medical, controls, avionics. Also a number of products with high IP like high-end computers, high-end communication equipment, high-end memory products never left and would never leave because the IP is better protected in the U.S.

In the automotive industry, Japanese companies like Toyota, Honda and increasingly, Korean companies, have built car assembly factories and they have the just-in-time philosophy. Therefore, they demand their suppliers at close proximity, otherwise, they cannot implement the just-in-time philosophy. Because of the success of Toyota, Honda and Nissan, a lot of manufacturers have come along. Additionally, the electronics or the number of electronic content in cars is going up increasing the demand for electronics production. And therefore the Japanese companies have invested in car electronic manufacturing.

The weakening U.S. dollar also helps. Of course, there are a lot of negative aspects to that, from an American manufacturing perspective, it is good because it decreases the manufacturing costs in the U.S. and Mexico. So the competitive position of manufacturing companies in the U.S. and Mexico is improving every time the dollar weakens. Also, the competitive pressure of China and other countries have improved the efficiency of American manufacturing.

AEI: Right now, the U.S. economy has been experiencing some crisis especially coming from the subprime loan. In this situation,how do you expect your sales in U.S. to perform?

Van de Vall: In 2007, we had a very good year. But in hindsight if I look back to my sales numbers and in my interaction with customers, I think the slowdown had already started in October last year. But during that time, we did not realize that it already started in Q4 2007. I talked with a lot of industry peers, and it seems that Q1 is already slow because of concerns of the overall economy, the subprime or housing market but most especially the financial market. What is happening now is that customers are in wait and- see attitude because they constantly hear bad news… if they are concerned, then they will stop investing.

But here's the good news, and why this show is important. We have met with a lot of our customers and most of them tell me that they are busy. So the end-user demand is actually there. Customers said that they would like to wait a few weeks or a few months to make sure that the financial crisis will not deteriorate. Our industry, I think, as a whole is healthy. Sooner or later, when the customers become "comfortable" again with the current situation, they will resume buying equipment. In my opinion, that will probably happen in Q3 or Q4. Of course, that is, assuming that we won't have any more "Bear Stearns".

AEI: Which manufacturers or from which industries buy your equipment in the Americas?

Van de Vall: Automotive is the most important sector for us. The other category is EMS, especially the medium sized, enterpreneurial EMS companies. They are still very successful in the Americas. The smaller EMS companies need to be very flexible and react very fast to engineering changes. Our products are very well suited for such a flexible environment.

We also have many OEM customers. They are in military, medical, control automation, high-end computers, high-end memory products and high-end communication equipment. We used to have a number of customers in the cellular phone business in Mexico but they have been moved to China. A lot of consumer electronics customers also went to Asia. But we still have a number of customers that produce high-end consumer electronic applications and they continue to grow because they make highly sophisticated products.

Assembléon is successful in these companies because we do not only provide machines, we provide complete solutions. We have a excellent portfolio of SMT equipment, but we also provide a wide range of services. Our machines together with our software provide a very powerful solution to make our customers successful, we partner with them. Another reason that contributes to our success is our strong partnership with Yamaha Motor Corporation, IM Company. While we also produce our own machines, we have 20 years of strong partnership with Yamaha Motor Corporation.

AEI: What are the company's most important products in this show?

Van de Vall: We have introduced a new version of our fast and flexible AX machine with a new feeding capability that exemplifies the flexibility of this machine. Some competitors say that this is a very fast chip shooter but at the show we added the wafer feeder to it. The AX-501 machine can directly pick chips directly from a wafer and place them on the board, which indicates the flexibility of the machine. Aside from the wafer feeder, we also added a tray feeder where you can directly pick from the tray feeder using various alignment technologies and that is very suitable for memory applications. We have penetrated a number of very large memory houses both in the US and in Asia. In my opinion, the AX-501 machine is the best in the world for memory module production.

AX-501

Memory module production is booming, because of the proliferation of personal communications devices with a lot of memory requirements. Additionally, solid-state hard drives are increasingly replacing spinning hard discs in computers. The AX-501 can handle a large component range. The only imitation is placing large connectors. Only in this case the AX-501 needs an additional machine. For this we showcased, the AX-201 and MG-8R to place difficult connectors that customers typically place by hand. This results in a fully automated line. Therefore fewer operators are needed and the impact on labor less significant.

This brings us back to the original question that we need not produce electronics in China, you can manufacture in the U.S., Mexico or Japan for that matter because we are automating the whole process including placing very difficult connectors and other mechanical parts.

At this show we also have MG-1R and MG-8R. These are already existing models, but we added new features to these machines to make improved operating life by shielding the linear guides and ball screws, and taking other measures to allow optimal operation in dirty environments. We have also introduced the MG-3 chip shooter for automotive or memory applications, which nicely complements the MG-1R and MG-8R machines.

Assembléon’s MG-3 high-speed chip shooter featuring 105,000cph

We also added the YGP screen printer from Yamaha, which is ideal for short cycle time applications. This is not a general- use printer, but is a very fast printer with very good quality, and very ideal for short cycle time applications. Our customers are very happy with the performance of this machine and now we are introducing it in the American market. This is the first time that we exhibited it at this show. We also showed for the first time, Yamaha's I-CubeII die mounter, a very accurate machine with force control that can take many different wafers. This is a very good machine for semiconductor applications.

AEI May 2008 - Business Strategy