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PCBD-July2017

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July 2017 • The PCB Design Magazine 17 "From the EMS perspective, there are really two interrelated challenges and a lot of it does relate to lead. One is that all DOD stuff has em- braced this concept of affordability and tried to drive affordability. I think some it's their own internal marketing to the government. But this concept of affordability falls down when you get to things like high reliability and leaded parts, where having new technology parts re- balled, re-dipped, and re-tinned adds cost and lead time to everything. And then you overlay that with an environment that is really IDIQ- driven [indefinite delivery/indefinite quantity] to where, even though everybody knows that the government's going to buy 200–400 units over X number of years, they will only buy 20, 40, or maybe 50 at a time because of the way the IDIQs work and other things. It leads to something compressed more than they need to be, and pricing that's higher than it otherwise should be," explained Turpin. "The other thing was obsolete components. Generally, it takes so long to bring something to market, particu- larly in the aerospace side that by the time it really starts to get past the IDIQ level into MRL level 4 [4] , a lot of the components are already becoming obsolete. That creates a whole new challenge in terms of building parts affordably, quickly, and in a way that the customer likes." "I would completely agree with that," said Lenthor's Rolle. "One thing that we see happen- ing as a result of that is you will have some prod- ucts with multiple plating finishes on them be- cause of the selections that are made upstream for all those reasons. And I sometimes see that drives complexity and makes manufacturing plans or parts more challenging if you're doing HASL, ENIG, or something like that. I've seen several instances where we really have to figure out if that's the way to make the part because of those types of decisions, or limits of those deci- sions that are made upstream as well." Business Expected to Increase With the new administration in office, there's been talk of additional military spend- ing. But has this translated to increase in busi- ness? Rolle said no, at least not yet. "I think you see election-year business cycles where in some cases the overall fear of spending, even for programs that are funded, gets people very tepid, reticent to go ahead and spur that funding. They kind of wait and see where the chips lay. I think this was already mentioned, that the proposal was for a 10% increase in the defense budget, but really what that means to this segment of the market is not clear yet. There's a lot of business for hardware that goes on a soldier or person, whether that be homeland defense, etc. Our customer base in the military market is expanding to police force, Homeland Security or ICE, things like that, whereas before it was traditionally just the Army, Navy and Marines," he explained. "I don't know that we've seen that come through yet. It looks like things are moving again, but I don't know if that's just because the calendar turned over and things are starting to pick up like normal or it's post-election." On the other hand, Turpin said they have seen an uptick since the election. "Almost twice the amount, I would say, in terms of what's been coming in, and it's all segments. Other people in our niche, EMS companies, are seeing similar things. I'd say, no question it's picked up. Now, that's just in terms of quotes. Last month was a really good month from a booking standpoint. It's probably too early to tell if they're turning into orders in a sustainable way, but from a quote activity, yes." Zentech's John Vaughan explained, "It has NEW CHALLENGES FACING MIL/AERO SEGMENT John Vaughan, Zentech.

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