Competition in electronics manufacturing is based on ability to deliver products that meet current market requirements. Requirements for electronic manufacturing are determined by (1) size and weight dimensions (millimeters and kilograms) of components and final products; (2) functionality and performance levels (number of functions, capacity and speed of operation, and energy consumption); (3) product shape (complex assembly using flexible or hard circuit boards to fit complex geometries), ergonomics, and aesthetics (use of precision plastics); and (4) cost of the final product (low-cost assembly and component sourcing).
Portability increasingly is driving product demand and technological developments. Portable audio components accounted for 310,000 of 410,000 total domestic mini-disk and compact disk player shipments in Japan in 1994. In 1995, of an estimated 860,000 total units, 640,000 were portable (Yano 1994, 732). Sony pioneered production of portable consumer products like the Walkman, Handycam, and Discman. Each succeeding product generation has been smaller and lighter in weight. For example, Sony's first model of Handycam, released in 1985, weighed 1,970 grams; the models of ten years later weighed under 800 grams, a 60% reduction (Kaneda 1994). The drive to miniaturize products has spread from consumer products like video recorders and electronic games, to computers and to telecommunications and industrial products. Evolution of all handheld products like PDAs, palmtop computers, cellular telephones, walkie-talkies, and electronic testing equipment is driven by requirements for reduced size and weight.
Portability requires miniaturization technologies. MiniDisc for audio, made by Sony in 1994, achieved 73.8% coverage of the printed circuit board. This was a 40% improvement in SMT placement efficiency. The smallest resistors and condensers in use are 1005 (1.0 mm by 0.5 mm) and 1008 (1.0 mm by 0.8 mm), respectively. The primary applications include Handycams, cellular telephones, minidisks for audio, cameras, prepaid cards, and pagers. Cellular telephones and personal communication systems are now driving ongoing miniaturization efforts. Cellular telephones, over 1,100 cm3 in 1985, have now reached 106 cm3 in volume. IC (integrated circuit) circuit integration and high-density PCB assembly are common methods used to meet product miniaturization requirements.
Key electronic components are those that impact miniaturization, power savings, improved reliability, and lower costs. For example, smaller and lighter products require multilayer passive components like voltage-controlled crystal oscillators (VCO) with monolithic multicomponent ceramic substrates, tape-carrier packages, low-profile or thin quad flat packages, and small-sized, high-energy-density lithium ion batteries for consumer electronics. TDK reduced the size of its VCO for use in cellular phones by 96% in seven years, down from 26 x 17 x 10 mm to 10 x 7 x 2.5 mm (Okamoto 1994). The move to miniaturized components has resulted in lower power consumption. Lower energy consumption in today's electronic packages allows for smaller batteries and/or extended battery life. The growing demand for portability has also stimulated the demand for lower energy-consuming components like liquid crystal displays (LCDs). LCD screens are being developed from plastic rather than glass to reduce weight. Japan is the world leader in production of LCDs for lightweight, portable products.
Miniaturization has pushed traditional process and component technologies to their physical limits, requiring new materials and processes to be developed to provide ultra-small and ultra-lightweight components. Both epoxy and ceramic materials have been developed for alternative semiconductor packages. "Clean pellet" molding materials offer less volatility and better moldability. With the move to fine-pitch lead packages, new solder pastes have been developed using fine spherical-grain metal powders rather than irregular-grain powders. New materials and laminates have been developed for use in thinner and multilayer PCBs.
In parallel with materials developments, new processes and equipment have been developed for the production of smaller and thinner IC packages and their downstream assembly. Today's assembly requirements increase demands for advanced equipment. For example, the laser diodes used in CD players (0.2 x 0.25 x 0.12 mm in size) require ultra-precise mounting equipment to place the laser chip on a silicon wafer. Sharp's PDA uses TCP assembly for the microprocessor and wire bonding to attach its chip set directly to the PCB. Miniaturized components require higher-precision assembly technologies. Need for improved soldering performance has driven firms to move from wave soldering to reflow soldering methods. BGA components are becoming popular because of their larger pitch, which is less demanding and more robust in final assembly but allows for further downsizing of SMT devices.
The limits to miniaturization are determined by the size of constraining component technology. For example, the Walkman's or Discman's size is based on the dimensions of the cassette tape or CD used, the size of sub-notebook computers is limited by keyboard and monitor dimensions, and pen-based PDAs are limited by the dimension of their input screens. New component form factors, such as mini-cassettes, mini-CDs, butterfly keyboards, or pen-based LCDs, allow for "next-generation" products and lead to further demands for miniaturization. In fact, space limitations in most countries generate greater demand for smaller products than is the case in the United States. Desktop computers are still in large demand in the United States, while smaller notebook formats are the best sellers in Japan. In the United States, on the other hand, portable weapons systems, cellular telephones, and pagers have driven size and weight reductions. However, the demand for miniaturization is spreading across industries as technologies become more integrated.
Advanced performance and function have historically been driven by products like supercomputers and satellites. New products include advanced technologies and performance, i.e., global positioning systems, mobile satellite communication equipment, high-definition TV, and fuzzy-logic-controlled microwave ovens. The move into multimedia products will demand ever increasing functionality with integrated multiple technologies. For example, CD players and mini disk (MD) player/recorders use optical pickups and get their digital signal from laser diodes (Kaneda 1994).
The simple integration of multimedia technologies into consumer products has begun to define Japan's future product strategy and is known as AVCCC -- the combination of audio, visual, computers, communication, and controllers. For example, Sharp Corporation had introduced a wide-screen TV with on-demand news reports. Sharp's ViewCam has been introduced with a teleport for sending still pictures over analog telephone lines to other ViewCams. Sharp's Zaurus uses infrared light to send facsimiles or to provide wireless communications between computers and printers. Next-generation products can be expected to integrate more combinations of technologies into single products, like the combination printer-scanner-copier-facsimile machines introduced over the past several years, or Sharp's combination TV/VCR sets. Once integration occurs, the process of miniaturization and weight reduction continues. Technologies like voice recognition, superconducting circuits, medical lasers, terrestrial satellite navigation, and advanced security systems are promising to lead to even more advanced product possibilities.
Final end-users require advanced styling, such as seen in today's cameras and electronic games. The Japanese dominance of the single-reflex and video camera markets has led to the development of advanced flexible circuit boards that mold around a shapely camera body. Canon, Minolta, and Nikon cameras all use complex flexible circuit boards. Firms are developing multilayer flexible printed wiring boards (PWBs) to accommodate advanced product form factors. The latest Sega and Nintendo electronic games include stylish joystick controllers. New stereos utilize the latest materials and modular designs for maximum aesthetics.
The United States has not been competitive in producing low-cost products like audio, video, or entertainment equipment. Advanced "Star Wars" technologies are typically expensive and seldom meet the cost requirements of high-volume, low-cost electronic products. Japan's leadership in low-cost consumer markets also has experienced some deterioration with the increasing value of the yen and rising cost structures. Products like personal computers and related components and products are highly cost-competitive. Sales of video players, electronic games, musical instruments, and home electronics rely on offering consumers ever increasing capabilities at continued low prices. Many Japanese firms now manufacture such products in China to stay competitive. Continued Japanese competitiveness is dependent on manufacturers being able to effectively redesign products and integrate components to reduce part counts in assembly. For example, Sony cut the number of parts in its optical pickup from 8 to 2, allowing drastic cuts in the unit's weight and cost. Innovative designs and high levels of electronic integration can typically cut costs from 30-70% (Kaneda 1994).
For labor-intensive electronics products requiring standard SMT assemblies, most Asian countries can now produce at lower cost than can Japan or the United States. The transfer of production from Japan or the United States to China allows for a further 30-70% in cost reductions derived from local parts sourcing and low-cost production. China is becoming the most competitive producer due to its extremely low labor costs combined with its access to advanced electronic manufacturing technologies. Over 8,000 foreign companies have already established facilities in China in an effort to stay competitive. Once a product begins production in China, market prices can be expected to rapidly decline, and, correspondingly, the profit margins of higher-cost producers can also be expected to decline.