The Near and Far Future for Orbotech and Inspection
March 23, 2017
Orbotech’s PCB Division President Arik Gordon and I spoke in detail about the company’s newest developments in automated optical shaping (AOS), Orbotech’s unique culture and commitment to R&D, and what he expects to see in the near future for the inspection industy.
Barry Matties: Arik, for those few who may not know, please tell us a little bit about what Orbotech does.
Arik Gordon: Orbotech is a global player in the production of electronic components, enabling their manufacture. We have three business divisions: FPD or flat panel display division which plays a major role in the production cycles of flat panels made for TVs, smartphones or any advanced electronic device with a screen including watches, cars and much more; SPTS, which we acquired in 2014 and is our semiconductor devices division or SDD and offers process equipment for the backend of the semiconductor manufacturing process, for example advanced packaging as well as MEMS, power devices and much more; and the PCB division that I head up, which focuses on developing advanced manufacturing solutions for the production of printed and flex circuit boards.
The three divisions are more or less the same size, each contributing between 25–35% of Orbotech's revenue, and today it's extremely hard to find an advanced electronic device that was not manufactured using Orbotech’s systems at one or more stages of production.
Matties: Orbotech is the giant in the industry for the inspection arena, but you have a lot of other technology. Let's focus on the PCB side. You have your automated optical repair or AOR, but you have also been describing a new process that does 3D modeling. Tell us a little bit about that process and the new solution.
Gordon: It is true that we started in inspection and yield enhancement. However, for more than 10 years now the main focus of our business has been production solutions such as direct imaging, which is our largest product and is clearly a production system, or what you referred to as AOR, which we have evolved into AOS or automated optical shaping.
Matties: Shaping—that's the word I was looking for. What is shaping and what’s the difference between shaping and repair?
Gordon: Shaping and repair are not the same thing. Not even close. The distinction between these two concepts is extremely important since shaping will play a key role in the future of electronics as technologies advance, functionality increases and devices become even smaller and lighter. The key distinction between repair and shaping is that repair is performed manually and is not suitable for the fine lines and high resolutions that we are seeing more and more these days, especially with advanced HDI and mSAP. With shaping we actually analyze the circuit using AOI technologies and make sure that the original CAM design is accurately produced. Where necessary, when there are shorts or opens of any type, we 3D shape or 2D shape the design, ensuring that the original CAM design is re-created.
Matties: Is shaping a new addition to the industry lexicon that you're trying to introduce?
Gordon: Yes, definitely.
Matties: Because you don't want to call it ‘repair’ due to connotations of poor quality, or some other issues that an OEM might reject the boards for?
Gordon: The repair process in the PCB industry is not a clean process that is well-controlled. What we do with shaping and the Precise™ 800 is well beyond it. It's more like plastic surgery. We work according to the CAM design, and there are multiple checks to ensure that the original design is properly produced.
The process starts by removing excess copper with a laser—an extremely complex and delicate process as the copper is on top of a laminate. You need a high powered laser to melt the copper, but you need to do it without damaging the substrate. With our 3D shaping, we actually add copper to the circuit and 3D shape opens. The amount of PCBs that this groundbreaking technology can save from the scrap heap is huge.
Matties: How many of these units have you placed now into the market?
Gordon: We launched the PerFix which removes excess copper a few years ago, and there are about 300 systems in the market so far.
Matties: And how many of your new shaping solution, the Precise 800?
Gordon: The Precise was launched at CTEX 2016 in May. I think it's fair to say that we have received tens of orders for this solution so far.
Matties: Nice, so it's well accepted.
Gordon: It's well accepted, yes.
Matties: Why do you think it’s been so well accepted so quickly?
Gordon: I think what is happening is that the complexity of the PCBs, especially in HDI, is getting to a level where the old style of repair is simply not possible—the lines are too thin, the laminate is too thin, and the only way to increase the yield is to use this new type of system.
Matties: Let’s talk about DI for a minute. There's a lot of new competition in the DI space.
Matties: How is that impacting what you do, or does it?
Gordon: Competition always impacts the business, and so I’ll divide my answer in two. Direct imaging is typically used in the advanced circuit board HDI and up. We have a unique technology called LSO or large scan optics, where we have typically one large lens or optical element as opposed to most of the competition which uses an area with many smaller lenses or optical elements. The main advantage of our technology is depth of focus, which is critical for production in terms of robustness. Both systems will perform well during a demonstration, however, in real-life scenarios when the panels are a little warped and you need day-in, day-out production, large scan optics is a core element and has a significant advantage.
And of course, the system is very fast. With real-time scaling and many other benefits, it has an edge over the competition. In the high-density boards, we estimate the market to be about 50% for many years now, thanks to the robustness and capabilities of the system.
Matties: You also have the ability of bundling because with your portfolio customers can come in and buy a universal package, which certainly gives you an advantage in the negotiating room.
Gordon: Definitely. If you look at the PCB production process in the context of Industry 4.0, you can see how many steps are covered by Orbotech equipment. We are also a major shareholder of Frontline which offers CAM solutions to most of the industries from CAM to inspection to direct imaging, inkjet, laser drilling and shaping. We have other offerings as well which support the direct imaging business.
Matties: What about solder mask? Is this also a big area now?
Gordon: Yes, there is a high demand for direct imaging of solder mask. The requirements are somewhat different than patterning. The most obvious is that we require very high energy to expose the solder mask material. For that, we launched a system called Diamond. To the best of our knowledge, it's the fastest system in the market. It's in penetration mode at the moment, and we believe that it will play a significant role in our business.
Matties: Is this solution capable of high-volume production? I know there are others out there that aren't quite so high volume.
Gordon: Our equipment is always designed for high-volume production.
Matties: So what hurdles did you have to overcome to gain speed? It's all about speed, right?
Gordon: Speed and power. Typical dry film resist in HDI and patterning can need 20 to 30 millijoule per cm2 of energy to expose it, and solder mask requires hundreds, if not sometimes thousands, of millijoules per cm2 to expose it. We had to come up with a system that has high power. Also, the solder mask is more sensitive to the spectrum of the light. The laser is typically a single wavelength but here we had to come up with a system that has multiple wavelengths, and that was a technological challenge, so it took us years to develop.
Matties: How has the market reacted to this product line?
Gordon: That product was also launched in 2016 and the business is growing. At the same time, we are continuing to address the key challenges, including the hundreds or even thousands of types of different solder mask materials out there which all interact differently with different sources of energy. We have to adapt the system to the needs of different solder mask materials. Of course it takes time, but it's gaining momentum and next year we hope to sell tens of systems.
Matties: You have solutions or products for just about every fabricator in the world really. There's not a fabricator that couldn't benefit by using one of your products, if not multiple.
Gordon: Yes. If you look at the top 50 PCB makers, the vast majority would already have a significant amount of Orbotech equipment and I think we are a major partner to our customers.
Matties: What impressed me is the amount of R&D and the commitment to R&D that Orbotech has. Can you talk about that? It's quite impressive.
Gordon: That’s very true and is one of our key differentiators. Orbotech is a highly technology-oriented company. It was founded that way and over the years, we’ve managed to keep our culture and spirit, but it also comes down to our investment in R&D. We keep the company R&D at quite a high level. In good years, it's between 12 and 14%, but the industry is cyclical and some years it rises much higher because we try to keep the investment in R&D level, even in a downturn. In general, that’s our culture: we're a long-term player and we are committed to investing in the future.
Matties: Now, I’m sure you've heard this, for some there's a love-hate relationship with Orbotech, and some people complain about the service fees, for instance. How do you deal with that? The second part to that question is, I think a lot of your competitors use that against you in many ways too. How do you deal with that? Are you familiar with those statements?
Gordon: I’m familiar with those statements, and I think it used to be true many years back. There are cases here and there where this is still the customer’s perception, but it’s the exception and not the rule. We are in a unique situation. We are a very significant player in the industry and there’s a very delicate balance involved in using that significance in a way that is perceived as partnership and not an organization that causes or forces others to buy equipment. Today, there is competition in each and every product line that we have, which in a way also helps to keep us humble. But also the culture and approach that we have been taking in recent years has definitely tackled that point. Today, I don’t believe that you will find many customers that still hold that view.
Matties: I think you're right that the volume has diminished, the decibels are lower, but we still do hear that, particularly when times are tough. Because they have to put out cash and their revenue is maybe not so good.
Gordon: One more point to mention in that context is most of the employees in the PCB division, which is about 750 employees overall, are customer support engineers. We continue to maintain systems that were launched 20 years ago and that operation includes powerful legacy systems as well as new systems. We sell to customers in Europe, U.S., England, China including Taiwan, Korea, Japan and many areas in Southeast Asia, both in centrally located and remote areas. To maintain a customer support organization that services all these types of equipment is a costly operation. We do charge our customers and in return, we try to deliver consistently high value.
We provide our customers with a complete safety net and a low level of risk. Yes, they have to pay for the service, but they also know that it's there. It may take one day more, one day less, but we are there for them and we are always working on improving that.
Matties: You mentioned culture. How would you describe the culture of Orbotech?
Gordon: That's a very tricky question. We’ve had many different sessions trying to define it. First of all, Orbotech does have a unique culture, it’s not just a slogan, and even in Israel it's perceived as a special company. There is something in the culture that keeps people in the company for a long term. The high tech industry is a very hectic one. People tend to move positions in companies every few years, but in Orbotech you'll find people such as myself who are still with the company after 10 years. Ten years is still considered a newcomer at Orbotech. There's something in the culture that attracts people to it for the long term, not only in terms of our investment strategy but also in terms of employee relationships and customer relationships.
Matties: When you joined Orbotech, what was so appealing that made you say "That's where I want to work"?
Gordon: Personally, I joined Orbotech in 2002 as VP of sales and marketing for the PCB division, and after four years I relocated to Taiwan, later to Tokyo and then to Hong Kong where I was managing Orbotech Pacific. Almost four years ago I came back home to Israel, but I had an amazing opportunity to travel the world and see very interesting and exciting things and cultures. When I joined Orbotech, we were doing mainly AOI and a little bit of direct imaging. When I reflect on what we've achieved in 15 years and the changes that have occurred, both for Orbotech and for the industry, it's a remarkable journey. To be part of the journey is simply exciting and now I go to work excited.
Matties: That leads me to my next question about the change or impact you have on the industry. Are you looking at industry needs, or do you create new capabilities by introducing technologies which allow a manufacturer to increase their offering?
Gordon: That's a very good question and talks to the basic philosophy about whether you need to ask your customers what they need, or show them what they need. It reminds me of the famous Henry Ford quote “If I had asked people what they wanted, they would have said faster horses.” I think we do both. We talk to the customers to understand their needs—many of the ideas come from the customers themselves—but we also try to think of ideas out of the box and develop technologies that one day may have value.
If you look at the AOS technology, especially the shaping of the opens, it originated in a project that started over 10 years ago. It was supposed to be launched many, many years back, but there were lots of technological challenges, but we kept investing. In the beginning we weren’t sure how the technology would be used, but it became clear to us once we saw how manual repair was insufficient for advanced technologies.
Very few companies have the capability to continue to invest in a project which is not meeting its business targets, just because we still have the vision that one day it will. So yes, we bring many solutions to the market, but of course we follow the customers, we talk to them about their needs, we make changes all the time and we make improvements to our product lines.
Matties: When you look at your resources, from Valor all the way through to final inspection, all the steps that you're integrated in, you must have an incredible bird’s-eye view of the manufacturing challenges that the world faces, globally and regionally. You could say, “This region is producing better that that region,” just based on the data that you have. That's got to be a huge advantage to you in your R&D and project planning.
Gordon: It's very true what you say, and the acquisition of SPTS gave us even more insight into the industry. When we acquired companies in the past, much of the interaction was done at the board level, but today there is a lot of cross-activity down at the division level, for example in the area of advanced packaging. And we do have a good view of that and, as a consequence, are able to offer better solutions to these two markets.
Matties: So, final thoughts here, where do you see the future five to 10 years from now in inspection? Here's one thought, while you're considering this. Do you see a need for point source inspection? Meaning, as it comes through the etcher, before it exits final that we have inline AOI at every step so that you don't produce a batch of scrap, you detect an error in one and you modify before the next one.
Gordon: First of all the needs of inspection are changing. Today, customers are asking to inspect more and more features that were not inspected before. A very good example is via inspection. We can prosper only in a world that has changing needs, because otherwise competition catches up. Needs are constantly evolving and as they become more advanced, that's an opportunity. We know the needs and we have resources to invest in them. Specifically, the issue of inline is something which we have considered many times, and I think the issue of the whole yield management connects to the question of Industry 4.0 and the smart factory, which is a growing trend.
Matties: This fits right into that.
Gordon: It does, and it's emerging very rapidly. We are very committed to supporting that.
Matties: Is your R&D team working on these types of solutions?
Gordon: Definitely, yes. It's currently more in terms of understanding the needs, and like you asked before, coming up with ideas. It's forming right now. When people talk about the smart factory today they don't have a full picture of what they need or what they want. The requirements are evolving and we have to adapt as we go—not only inspection and imaging, but also work flow management, having an overall perspective of the manufacturing process, and probably also adding the inspection points to that big picture. It’s an opportunity for the makers and an opportunity for Orbotech. Our Orbotech Smart Factory™ will address these needs and provide a comprehensive solution.
Matties: The other thought that I have is that one of your neighbors, Nano Dimension, who I'm sure you know quite well, are producing circuit boards out of thin air, basically.
Matties: It's quite impressive what they're doing, and granted it is in its infancy, but 10 years down the road it looks like a very promising technology. What's your opinion about that?
Gordon: I think in general that additive manufacturing is a significant trend which is needed not in just our industry. At Orbotech, we have worked on additive manufacturing, and the Precise 800 is a form of low throughput additive manufacturing. Definitely our inkjet solutions are where we lead and we plan to cover more and more applications using these two different technologies—inkjet on one hand and then LIFT, which is the technology used in the shaping.
Matties: When I looked at the shaping technology at APEX last year, to me it looked like you were doing an additive manufacturing process right there, granted in small bits, but you have the basis for something there. So it will be interesting to see how that evolves.
Gordon: It’s definitely part of our plan.
Matties: Yes, no doubt you guys are always innovating and always leading. If a fabricator came up and said "Arik, what's the best advice you could give me?" What would that be?
Gordon: I think that many fabricators are still not taking advantage of the benefits of Industry 4.0. I see PCB factories with an extreme level of automation not only saving labor but with a more consistent and higher quality output. Many makers are still lagging behind and not yet using available automated solutions. If you look at the booth today, and we didn't have it in the past, we have two systems with automation. We don't sell our own automation but we work closely with others. Industry 4.0 as its most basic involves factories with less labor and more automation. The next step is to combine it with data analysis, which is getting closer to the real smart factory or Industry 4.0 vision. You don't have to wait for Industry 4.0 to have complete and defined specifications. You can do many elements of it already right now, and you should do it. You should embark on it.
Matties: You mentioned the automated factory, and I'm thinking of Alex Stepinski, one of your customers over at Whelen. In fact, we just last year created our "Good for the Industry" award, and we awarded Alex for his innovative thinking and probably that's one of the factories that come to mind when you're talking, right?
Gordon: Yes, I visited Alex's factory over a year ago and he's very innovative. Also, implementing a factory in North America is a significant achievement, so I think the award is well-deserved. And I agree with you, I think that automation is relevant not only for the mass production facilities that you find typically here in the Pacific or in China, but also very relevant to makers in the Western part of the world, or makers of smaller batches.
Matties: It’s funny, because we did a survey around this very topic with the shops around the world, and those in America were split on automation, and when I think about it, automation is one part, but process step elimination is probably a more significant part for North America. If you can take a traditional imaging process and turn it into a DI solution, you're taking a lot of steps out of your process. We need to see more thinking like that as well.
Gordon: I fully agree. I see makers that take the automation in the most basic sense. They simply connect automation to their existing machines.
Matties: A handler.
Gordon: It's handling, which has value, but not much. What you describe, designing an automated flow with less steps, controlled and managed by data, and using handling and automation is the right way to go. That's basically the number one advice I would give to a PCB maker today.
Matties: Arik, is there anything that we haven't talked about today that you think we should share with the industry?
Gordon: I think it's pretty comprehensive; you know your stuff!
Matties: Thank you very much. I appreciate you sitting down with us today. It's been very nice speaking with you.
Interviewer: Barry Matties
Interview with: Arik Gordon, PCB Division President, Orbotech
Published by: I-Connect007
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