Meeting the global challenge

It is a truism in the plastics industry that most electronics manufacturing and molding is done “offshore”. While offshore has come to imply Asia, to North American electronics OEMs the term is associated more specifically with the countries of Taiwan, China, Thailand, Singapore and a few others. According to U.S. Census Bureau figures, the U.S. consumes 22 percent of all goods (much of it consumer electronics) exported from Asian countries, excluding Japan. A survey of companies exhibiting at the recent Consumer Electronics Show (CES) in Las Vegas, confirmed the prominent position in electronics manufacturing commanded by these handful of Asian/ Pacific countries.

For example, EnGenius Technologies Inc.’s long-range cordless phone and two-way radio system with four times more transmission power than 2.4 GHz phones is produced in Taiwan. With transmission power up to 900 milliwatts, the phone is capable of covering up to 250,000 sq. ft. of floor space and penetrating up to 12 floors, making it is the longest-range cordless phone system on the market, according to the company. The phone is manufactured in Taipei, Taiwan at a facility owned by EnGenius Technologies’ parent company, Senao International. The phone’s housing is molded of ABS with a nominal wall thickness of 2.5 mm on a high-speed injection molding equipment, according to the plant’s production manager. The Taipei plant manufactures over 40 different types of phones.

Another company, California-based Aurora Corporation, introduced a line of Translucent Color Calculators that come in wide variety of bright colors designed to appeal to youth. The calculators are made in Shanghai, China at a company subsidiary.

Sunrise Mold & Plastic Co., Ltd., a Taiwanese injection molding operation, was an exhibitor at the CES show. David Tai, general manager at the company, says the company offers customers full-service capabilities, which include sub-assembly, painting, decorating and coating, as well as mold design and manufacturing. Tai singles out the company’s experience and strength in mold design and moldmaking as one of the keys to its success as a contract molder to major consumer electronics companies.

Sunrise produces about 140 new molds a year with an average lead-time of six weeks. It has three CNC milling machines and five EDMs. Tool design is carried out on Pro-E, AutoCAD or Solid Works; while Cimatron V.11 is used for CAM. The company has 34 injection molding machines ranging from 55 to 550 tons clamping force.

One of Sunrise’s specialties is housings for laptop computers. Tai says both tool design and injection molding of laptop housings are technically challenging. The housings are often made of glass-filled polycarbonate and designed with many through-holes and thin-wall sections. Tolerance for a typical laptop dimension is 0.001 in.

Cost isn’t only factor

Robert E. Johnstone, GE Plastics global manager, Visualfx, elaborates on Tai’s self-assessment, noting Asian molders provide customers with superior electronics and total system capabilities. When molding is the only consideration, however, Johnstone says the Asian advantage boils down to two main factors — cheaper cost and faster tooling. Johnstone, who once worked in Singapore as a GE Plastics application development manager, believes North American molders have especially underestimated the ability of Asian companies to build quality tools quickly, and the role this has played in the Asian dominance of the electronics.

“Fifteen years ago the quality of tools in Asia was inferior, but the Asia/Pacific tooling community has closed the gap to negligible. Some of the finest quality tools in the world today are built in Singapore.”

Raj Mathur, president and CEO of Ottawa-region electronics molder Komtech Inc., observes that much of the research and development work for consumer electronics OEMs is still done in North America. All things being equal however, he notes, cost is still the major factor determining who makes those products.

Johnstone agrees, up to a point: “The cheap cost of labor in Asia is a huge multiplier of cost savings.” With electronic product life cycles becoming shorter, Johnstone suggests, the cost-advantage multiplier diminishes. In this case, a company’s structure and strategic business alignment can form the basis of success in electronics manufacturing.

“Several U.S. contract electronics manufacturers that are heavily vertically integrated compete very well with the Asian manufacturing base by offering turn-key system solutions to their customers,” Johnstone says.

One noteworthy twist in the strategy of electronics OEMs to capture lower cost, says Johnstone, is the recent decision of many Asian OEMs to move their supplier base to Mexico. Several Japanese and Korean companies are now manufacturing high-volume items such TV and computer monitors in Mexico’s maquiladora zones.

Companies interested in seriously pursuing contract electronics manufacturing should expect to invest a lot of up-front effort in the design and development cycles, says Mathur.

One option, which has always been open, is to follow your customer, as many North American molders and moldmakers have already done, bringing back substantial business from Mexico and elsewhere.

Another is to make the long-term commitment to a market not traditionally associated with Canada. Times are changing. Panasonic has recently broken ground on a $13 million design centre located in Calgary’s Telecom Triangle. The Triangle, according to reports issued by Calgary Technologies Inc., is a hot bed of high-tech research, development, design and manufacturing.CPL

Electric materials

GE Plastics has responded to the growing demand for special visual effects in consumer electronics products by expanding the offerings in its Visualfx line of engineering resins. Diamond effect creates a glass-like glitter and is available in Lexan polycarbonate and Cycolac ABS resins. The Diamond effect line will initially include eight colors: clear, white, black, burgundy, blue, translucent blue, translucent green and translucent violet.

The metallic look is in for hand-held computers and other portable devices. According to Robert Johnstone, global manager of the Visualfx program, a new processing technology currently near commercialization will greatly expand the processing window of GE’s metal-looking resins and eliminate flow lines which sometimes appear in complex parts.

Explosive growth in cell phones is pushing design and processing parameters to new levels, says Bayer’s Roger Rumer, director of information technology. Makrolon polycarbonate and Bayblend PC/ABS blend can provide the combination of flow and physical properties needed for thin-wall sections of cell phones, says Rumer. Polycarbonate film is increasingly being used to creative economical decorative effects on phones.