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November 2016 • SMT Magazine 89 nology bottlenecks in production. Material sta- bility will also face challenges. In addition, as multilayer boards are getting thicker and thick- er, and holes getting smaller and smaller, elec- troplating, filling, and high aspect ratio process- es are also facing challenges. In short, there are all kinds of different as- pects of circuit board production technolo- gy bottlenecks, and it is difficult to determine which area will make a breakthrough first, but I think material stability, mechanical properties and plating technology need to be further im- proved. Yu: What can you say about the current domes- tic PCB landscape, and your business development outlook in 2017? Chan: The domestic PCB industry is full of op- portunities and challenges. China's electronics design community continues to grow, engaging in product design and the development of stan- dards, such as mobile phones (Huawei), wire- less base stations (Huawei, ZTE, Datang), and automotive parts. The development of the de- sign segment is an opportunity. The challenges are coming from two drivers: The first is over- supply, which is causing great competitive pres- sure. In this case, prices go down and profits drop for domestic manufacturers. It could be a challenge, but it could also be an opportunity, because the cost of domestic manufacturing is relatively low. Technical requirements are also challenging, because PCBs, especially electronic assembly and applications, get more and more complex. The required value-add and capabilities of PCBs are increasing. For example, mobile phone de- sign is now more complex than ever; 5G tech- nology is moving into the high-frequency do- main; and routers and servers are getting even faster. Therefore, as domestic PCB production technology is relatively behind global technol- ogy levels, domestic PCB manufacturers need to catch up, narrow the gap, and work with other advanced countries with technology develop- ment, to have that innovative ability and meet the global market needs in the future. I am op- timistic about the development of the domes- tic PCB industry, where there is still a huge de- mand for PCBs. When local manufacturers im- prove their technology, they will be able to ex- pand their PCB business to the world, and solve technical problems that the domestic electron- ics industry is facing. Yu: Many PCB manufacturers are now building their own PCB design team, while some are intro- ducing SMT lines into the facility to expand their business. What do you think of this? Chan: This is the vertical integration of the whole industry, which goes from PCB produc- tion to SMT assembly and PCB design. Many of them are successful, such as Flextronics, Fox- conn, Celestica and some other big enterpris- es. Companies that want to implement vertical integration need to gather their own technical capacity, as the technology in PCB industry is basically different from electronic assembly and electronic product design industries. In general, PCB production is a mix of chem- ical, electronic, and physical engineering tech- nology industries. Electronic product design ba- sically belongs to the electronic engineering in- dustry, which includes mechanical engineering, industrial engineering, automation engineering and a small amount of chemical engineering. Overall, vertical integration is the right di- rection, which could control the whole chain better, but it is important that sufficient funds, personnel, and technical ability are provided to achieve the goal. Vertical integration also has its weak spot; it could lead to customer distrust, as customers would worry about their intellectual property leaking to the manufacturer's own de- sign center or electronic assembly center. There- fore, PCB manufacturers need to establish inde- pendent operations that are separate from their associated PCB design company and electron- ic assembly company; otherwise, it will have an impact on their PCB sales. So manufacturers should separate the corporate image from the actual operation, which will have a positive ef- fect on vertical integration development. Yu: Thank you for your time. Chan: Thank you. SMT HKPCA & IPC SHOW PREVIEW

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