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PCB Technologies Expands Capabilities

PCB Technologies Expands Capabilities

Nolan Johnson speaks with Arik Einhorn and Yaad Eliya of Israel-based PCB Technologies about how they’ve increased their capabilities down to 1 mil line and space to better support their customers from the military, aerospace, and medical markets. 

 

Nolan Johnson: Arik, let’s start by talking about the new 1-mil capabilities and how you got there. What was the trigger for PCB Technologies to decide to go to 1 mil? And what sort of resources did you have to invest?

Arik Einhorn: PCB Technologies’ goal is to be in front of the technology. Two years ago, we started to build our five-year technological roadmap and for that purpose, we put together a committee of market representatives, assembled from several of our high-end customers' R&D and innovation executives. We had representation for military, medical, communication and other markets and for different applications within these markets. We asked them: “What do you need that you currently don’t get?" And "what will you need down the road?” Our CTO, Yaad, was head of this discussion.

We have mapped the trends, the applications, where they want to be, what will help them better the performance of their products. From this, we got a wish list. The next thing was for Yaad and his team to translate the wish list into a roadmap and a good solid plan of how to get there—machinery, people, chemistries and processes, materials, functions, training. This 1-mil line/space, was one part of the complete roadmap, as we saw it popped up over and over again in many of the line items in the wish list.

 

Yaad Eliya: Across the roadmap, we saw a few motivations for miniaturization. When it comes to making things smaller, we always start with shrinking the line and space resolution. Then we deal with the diameter or the geometries of the via, lowering the dielectric thickness, lowering the copper thickness, etc.; that is our process for miniaturization. Generally speaking, more and more customers need to miniaturize their products and one of their constraints is the size of the electronics. A number of technologies and industries were developed in the last 10 to 15 years to "bridge the gaps" between the die, the chip, and the semiconductor and the PCB itself. When you think about it, the semiconductor industry follows Moore's law, making things smaller at an exponential pace whilst leaving the PCB behind. The first solution for this gap was the creation of the IC/substrates industry that took some processes from the semiconductors combined with processes and materials from the PCB production. 

What we figured out is that we can save many headaches for our customers by creating 1-mil line and space, and by that, simplify the design of the system along with promoting its miniaturization. For example, smaller sensors can help medical companies that work with us—especially ones that produce systems for surgery and other invasive devices; most of them are using FPC (ultra-flex PCB) which they design with us and buy from us. We also found out that the aerospace industry wants miniaturization to reduce the loss of signals in dB per mil. As long as the line and space is smaller and fine-shaped, then the loss will be lower. We understood that this 1-mil line/space capability will allow us not only to support customers who want to minimize their product, whether it’s in aerospace, medical, or military, but also improve the performance of their systems.

 

Johnson: As you made your roadmap, undoubtedly you found gaps between what you can do now and what you needed to achieve to be able to fulfill your customers’ requests. How did you invest? Was it equipment, staffing, facilities?

 

Eliya: Yes. First, it’s very easy to buy an off-the-shelf machine that was designed to make a particular product. It is more complicated when you need the machinery and processes that match the full range of your products, your R&D activity, plus future products. We already invested two, three years ago in a very special etching and developer system to create the dense and fine line. Our next gap was the lithography process, and without getting into everything we did to close this gap, I will say that we purchased an LDI with the wavelength to create 18 microns line and space. And when, in the future, customers will want a 20-micron line and space, it’s achievable. In fact, we are already running a product with 20-micron lines with this machinery.

 

To read this entire interview, which appeared in the April 2021 issue of PCB007 Magazine, click here.

Designated assembly line for Elbit systems

Designated assembly line for Elbit systems
We were honored to host Elbit Systems Ltd Aviation Division's COO, Mr. Avner Eshel, along with Elbit's distinguished Procurement team at our site at Migdal Ha'emek.

During the visit, Mr. Eshel inaugurated PCB Technologies' designated assembly line for Elbit systems and was briefed on the progress of the Elbit's various projects within PCBT.

Elbit System has been a strategic customer to us for years and we are excited with their recent decision to deepen the relationship between the companies and awarding us with significant EMS projects.

 

 

 

 

 

 

Breaking the Circle: The Potential of PCB Technologies

Breaking the Circle: The Potential of PCB Technologies

The shares of companies in the field of electrical components traded in the United States have yielded an average return of about 10% in the past year, compared to almost 50% in the NASDAQ index. The stock of the printed circuit board manufacturer, which is controlled by the FIMI Fund, is currently trading at an interesting price

 

 

 

If there is one business that has not only “hovered” over the corona crisis, but even enjoys the shake-up and forced change of habits, it is the technology sector. The fact that global and strict gathering and movement constraints have been placed, has led to a dramatic shortening of the development time for the use of technology that enables remote digital communication.


It is not that this technology did not exist before, but the Corona has given it a huge boost. In my opinion, this is more a social change than a technological improvement, and as such - which came much earlier than planned - it will not disappear with time. Therefore, it is not surprising that technology companies, especially those that are focused on digital communications and work using a cloud model, flourished during one of the most difficult periods.


That said, the intensity of the trend was not the same, as technology stocks that are perceived as less glamorous and are production heavy and labor-intensive, did indeed report a positive return - but significantly lower. If you look, for example, at the return recorded by the shares of companies in the field of electronic components (Electronic components) in the past year, you find that it amounted to an average of 10% - compared to the return of almost 50% recorded by the Nasdaq index at that time.

 

"If there is one business that has not only “hovered” over the corona crisis, but even enjoys the shake-up and forced change of habits, it is the technology sector."

 

 

Israeli Technology is a Market Leader

The point is that blind generalizations produce biases and distortions, since there are attractive technology companies even in the less glittering fields, and unlike "fashionable" companies, they are traded at interesting prices. Names? PCB Technologies, a manufacturer of printed circuit boards.


The transformation of the East Asian countries into the world's manufacturing house - a process that began with the textile industry, moved to metals, went on to consumer products and electronics, and also reached the field of printed circuit board manufacturing. PCBs are now available in the East in large series and at very competitive prices, but these do not entice customers looking for added value and complex products.


As a result, and in the face of mass production in Eastern countries, complex production capabilities have developed in Israel, which also require a high level of reliability. Some argue that the professionalism of the local industry was born out of the security needs, as the defense and military industries demand reliable and sophisticated products. 


Whatever the reason, the very fact that an industry with prominent and exceptional expertise has developed in Israel has given rise to another market that needs its printed circuits from local companies - the medical industry. Since medicine deals with human life, it is understandable that maintaining the reliability and quality of the equipment is imperative.


In this context, it is worth adding an important point: the printed circuit is the heart of the electronic product - its quality ensures the reliability of the device, while its price is a small contributor to the total product cost.

 

 

"PCBs are now available in the East in large series and at very competitive prices…"

 

 


Electronic Components Companies: A Clear Link between Research and Development Expenses and Profitability

According to the financial results of the last 12 months, as appeared in the reports of 116 companies in the field of electronic components traded on the US stock exchange.
Source: Bloomberg

 

 

PCB - thanks to the investment in development

What caught my attention at PCB Technologies is an accounting item in the financial statement. Until last year, the company's profit and loss statement did not contain a series of "research and development expenses", but in early 2020 that changed: PCB began reporting these expenses separately for the first time.

This is not a technical matter or form of presentation, as it indicates the management’s intentions; increasing investment in the development of new products, as well as in innovative production processes. In the case of PCB, this is doubly important, as the company's operating profitability is relatively low today, so the new products it develops will not only affect the growth rate – the end effect will be increased profitability.

The company's latest announcement that it has developed production capability of ultra-miniature printed circuits, with conductor width and conductor spacing of only 25 microns, is just one example of the trend. The positive relationship between research and development and profitability is not "shocking knowledge", so naturally, it also exists in the field of electronic components - a market in which PCB is active.

PCB's market capitalization is $115 million, with net cash in its balance sheet approaching $30 million. Besides the fact that it shrinks the net profit multiplier, the high liquidity also has a practical aspect; buying a company in the near future is a more than just a feasible option.

 

 

Bottom line:

PCB Technologies is controlled by the FIMI Investment Fund, and the fund's declared purposes are clear: acquisition at a comfortable price, orderly strategic thinking, changes and adjustments in management, identification and definition of growth engines - often through acquisitions outside Israel, strict implementation of the outlined business plan, and above all, longevity.
In this respect, PCB is no different from FIMI's other investments. Judging by the changes made in the company, along with the improvement in the results of the past year, this is just the beginning.

 

 

Published in Globes, the leading financial magazine in Israel >