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28 PCB007 MAGAZINE I MAY 2019 Feature Interview by Nolan Johnson I-CONNECT007 Tony Senese—manager, business develop- ment group, Panasonic EMBD—gives Nolan Johnson an overview of materials and compo- nents as well as changing business models and methods to make materials succeed and how to stay profitable. Nolan Johnson: Can you describe the changes you've seen in the cost and structure of mate- rials? Tony Senese: It's a lot easier for people to talk about cost than it is price because the price is considered to be negotiable. Forget inflation. Everybody wants to talk about all of the tech- nical integration that's required, but nobody understands the structural changes that we've gone through in the last 30–40 years. I'll start with a global overview of what ma- terials existed in terms of what people were us- ing, what materials exist now, and the chang- es. In 1980, about 90% of all materials used to make circuit boards were some form of FR-4. By now, about 60% of materials are some form of FR-4, meaning that the basic constituent is ep - oxy resin, E-glass fiberglass, and copper. There are differences that we could debate about, but the cost drivers are the same. The materials that everybody likes to talk about are 40% of everything else. Fabrica- tors, OEMs, and material suppliers like to talk about those because of the value that they offer to each, and they are all different. Lami- nators have been making low margins for so long that they've forgotten what it was like to make FR-4 in 1980, for example. Back then, FR-4 was a very profitable business. Gross margins without overhead were in the neigh - borhood of 70%. The three basic materials that we use are res- in, glass, and copper and are still the primary cost drivers in the materials business. But the big difference then and now is we were able Making Materials Succeed: Past, Present, and Future Trends