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Impacts Of Tariffs Against China For Electronics Manufacturers

The trade war was triggered when Trump unilaterally announced 25% tariffs on steel imports and 10% tariffs on imports of aluminum. While the tariffs were broad-based, the real target was always China. That is hardly surprising considering that the US has a trade deficit of $376 billion with China.

Beyond that, according to Trump, America has been short-changed by China in two ways.  Firstly, the Chinese government gives its domestic producers enormous subsidies, which enables these producers to supply goods at rates that other countries are not able to match, giving China an unfair advantage when it comes to global trade. The second complaint is that China has been misusing intellectual property (IP) and has been using reverse engineering to build its own domestic industry in high technology areas.

 

Tariff Impacts on U.S Electronics Manufacturing

Now that the tariffs against China have been implemented by the Trump administration, the question is what the impact is on US electronic goods? In effect from July 6, 2018, the higher tariffs have become effective on Chinese imports into the US worth $34 billion. China reacted as they warned and has enacted tariffs on $50 billion worth of US imports. The direct impact of tariffs will be on goods worth more than $100 billion and the downstream and collateral effects will be much larger.

The list of impacted items leans away from consumer goods and towards components of consumer goods and ready-to-purchase capital goods. Capital goods are the equipment, machinery, and products that companies purchase to expand operations and infrastructure and are part of longer-term investment objectives.  

It is clear, from this perspective, that the initial goals are to shift the cost differentials between both US and Chinese suppliers for common heavy equipment, with an eye to shift the balance of favor to US-based heavy equipment suppliers without having short-term impacts on consumer pricing.

Overview of Tariffs on Electronics Components

The interest in electronic manufacturers, however, lies in the items that are going to impact the electronics industry. Overall, they are not heavily concerned about the tariffs on pick-and-place machines, soldering irons, or inspection equipment.

There are two reasons for this: one is that capital investments in equipment for businesses are made based on multi-year plans; and secondarily, their highest-ticket capital expenditures are typically sourced from the EU and US, based on the brands of equipment they buy, which they feel are best suited to production loads here in the US.

The tariffs that affect electronic manufacturers and their customers really begin around section 8532. These tariffs cover a wide range of products used in printed circuit board assemblies, including:

  • Capacitors (all including tantalum, aluminum electrolytic, and ceramic)
  • Resistors (all including thin/thick film, radial, potentiometers, and rheostats)
  • Fuses
  • Relays
  • Switches (all, of any kind)
  • Connectors and terminals of any kind for making electrical connections
  • Transistors
  • Thyristors
  • LEDs
  • Any printed circuit assembly covered by two catch-all sections.

The second set of tariffs that have been suggested but have not yet rolled out include the following impacted items as well:

  • Diodes
  • Integrated circuits (all including processors, controllers, memory, amplifiers, other)
  • Low-voltage Insulated wiring

Impacts of Tariffs on Component Shortages

One of the largest factors currently affecting electronics production is a severe under-supply of passives, like resistors and capacitors. In general, any expected increase in cost would be expected to reduce demand, but in this case, higher prices are not expected.

That is because:

Passives are not discretionary.

Companies need to build their products to sell them and increasing the price of individual components would increase the costs of those products. Only if the end product costs were to substantially increase would that reduce demand. Years of haggling on passive component prices reduced their value so significantly that little new production capacity has been brought to market. The net result of this is that passives are a minimal driver on overall product cost for many items, meaning these tariffs alone would have little impact on the final product price to reduce demand sufficiently to overcome the market shortage.

Also, most passive consumption does not happen in the US.

The vast majority of the passive demand these days goes into portable electronics and electronics for automobiles. The bulk of portable electronics (cell phones, tablets) are produced in Asia, and as such, these tariffs would have little impact on their prices.  While there is substantial automotive electronics production in the US, overall production is well spread worldwide, with significant capacity in Mexico, Eastern Europe, Japan, Korea, and China.

The primary impact these tariffs will have on US electronics production will be to drive the cost of these components higher, while providing little relief in a tight supply market. Competition for supply in high volume production will get more expensive in the coming months and may result in some orders seeing a substantial Bill of Materials increase to ensure supply in the hundreds of thousands.

 

Impacts of Tariffs on the Future of U.S. Electronics Manufacturing

Pricing increases on components have already started to affect prices on the tightest supply components like capacitors and resistors, while other component price increases will work their way into the overall US market over several months, as existing stock at distributors in their US warehouses is depleted. Component costs will largely stay fixed for a short period of time before rapidly raising.

If tariffs expand to integrated circuits, counterfeit materials will become a larger risk in the overall supply chain. Driven by high prices, the number of “too good to be true” deals are going to increase and desperate purchasing managers and EMS buyers will be tempted to take the offer.  Quality Contract Manufacturers (CMs) will continue to work only with authorized distributors as materials prices go up and availability goes down, as the risks for their customers will simply be too great.

We can expect further uncertainty from OEMs, startups, and small businesses with regards to international manufacturing. As trade issues continue to be front-and-center, we’ll see more low- to mid-volume electronics manufacturing either starting onshore in North America or moving back — even with elevated component prices, while large-volume electronics manufacturing will remain overseas for the near-term.

With longer-term tariffs on existing materials, we’ll see more and more US-based electronics manufacturing purchasing shifting to Mexico to take advantage of low tariffs between China and Mexico, along with low final-product tariffs via NAFTA, unless that is also affected by the plans of the Trump administration.

Overall, we can expect the impact on tariffs on any goods to result in more multi-sourcing, making the same product in multiple global regions, as the risk of retaliatory tariffs increases and OEMs optimize for taxes. For US-based customers, CMs who offer both US- and Mexico-based production capabilities will see a marked increase in demand as customers seek to locate production to lower duty regions as US/China friction heats up.

For more information call Circuits Central at (888) 602-7264 or contact us here.

Conformal Coating And Thermal Shock Resistance

Conformal Coatings

When electronics have to withstand harsh environments and impact, protection is provided with conformal coatings or potting compounds. Potting is the process of filling a complete electronic assembly with a solid or gelatinous compound for protection but is heavy in comparison to conformal coating and is harder to inspect, test, and repair.  

A conformal coating is a protective chemical coating or polymer film 25–75 micrometers thick (50 micrometers is typical) that conforms to the contours of a printed circuit board. It protects the board’s component from moisture, dust, chemicals, and temperature extremes that, if uncoated (non-protected), could result in damage or malfunction.

By providing electrical insulation, it maintains long-term surface insulation resistance (SIR) levels and ensures the operational integrity of the assembly. It also provides a barrier to airborne contaminants from the operating environment, such as salt spray, preventing corrosion.

Traditional Conformal Coating Materials

Conformal coatings are used across a diverse selection of electronics, from everyday household appliances and automotive to spacecraft applications, so selecting the correct conformal coating for the job is vital. Traditional coating materials include acrylic resin, silicone resin, and urethane (or polyurethane) resin.

Thermal Shock Testing

With the drive for increased functionality for end devices, and increased life cycles being placed on all electronic assemblies, the need to have materials endure more stringent testing becomes increasingly vital. Thermal shock testing is widely used as the most stringent indicator for qualification purposes of today’s most reliable printed circuit boards.

Standard technology conformal coatings are not designed to meet those needs and new technologies. Next generation systems, such as those found in the new synthetic rubber and UV offerings, are needed to assure success. These relatively new product technologies provide resistance to long-term thermal shock induced defects through improvements in the thermally stable physical properties such as CTE, Tg, elongation, and modulus.

Thermal shock testing has traditionally been used to allow OEMs to simulate long-term life cycle performance. These tests are widely used in various industries where the normal operating temperature can fluctuate greatly, such as automotive circuit boards, outdoor lighting, and agricultural applications. Standard testing involves chamber temperature fluctuations between 40C to 85C, with temperature change gradient of 20C per min. There are some thermal shock tests with greater and lesser temperature changes, however, the -40C to 85C seems to be most widely used.

Long-term thermal shock is considered to be greater than 1,000 cycles, with some reaching up to 3,000 cycles. Most existing chemistries will not pass such stringent test requirements, so next generation conformal coating technologies are needed.

Commonly observed thermal shock defects include coating cracking, loss of adhesion, and blistering. These are caused by stresses that manifest as a result of the thermal excursions.   Plastic deformation progression and adhesion loss are exaggerated with the acceleration of temperature induced stresses. For example, blistering may start at a small localized point as particulate or residue on board which creates a lower point of adhesion. This small point is then stressed during the thermal cycle and becomes a blister.

New Coatings

New technology coatings counteract the stresses created by thermal shock by remaining more flexible and less susceptible to thermal stress induced defects. They include synthetic rubber, UV-curable and VOC free coatings, epoxy resins, parylene coating, and fluorocarbon (or ‘nano’) coatings.

Epoxy resins are available as a single part or two-part compound. Single part compounds are cured thermally or by UV exposure. Two-part compounds begin to cure as soon as they’re mixed together. Both systems provide the same benefits. They have good moisture and dielectric resistance. They also have excellent temperature and chemical resistance. Epoxy also has good resistance to abrasion and is rigid. However, it is nearly impossible to rework. As with acrylic, polyurethane, and silicone, epoxy can be applied by brush, spray, or dipping.

Fluoropolymer coatings are composed of polymers that contain fluorine. Fluoropolymer coatings are costly compared to analogous hydrocarbon acrylates, epoxies, silicones, and other coating types. In addition, special equipment is required to manufacture most of these fluorinated compounds. Fluoropolymer surface modifier coatings are used in environments that require high reliability, high water oil, and silicone resistance, high resistance to microbiological attack, a very low dielectric constant, a very low ion migration rate, and weatherability.

Parylene is considered by many to be the ultimate conformal coating for protection of devices, components and surfaces in electronics, instrumentation, aerospace, as well as medical and engineering industries. Parylene is unique in being created directly on the surface at room temperature, with no liquid phase. It is chemically stable and makes an excellent barrier material, has excellent thermal endurance, as well as excellent mechanical properties and high tensile strength. However, the material is expensive, has poor bonding characteristics with certain metals, and the process requires special equipment to produce and can be very time-intensive.

Synthetic rubber copolymers contain specifically formulated blocked alkenes. These materials are extremely flexible and yield under various temperatures. Additionally, they offer superior moisture protection. This translates to greater reliability testing performance as the material flexes and recovers under various stresses during thermal shock and thermal excursion testing.   Furthermore, susceptibility to dendritic growth is minimized with the use of synthetic rubbers due to superior Moisture Vapor Permeability (MVP) resistance performance. The combination of water vapor and ionic contamination leads to dendritic growth, and synthetic rubber conformal coatings provide the industry’s lowest moisture infiltration.

UV dual-cure elastomeric acrylate and acrylate polyurethane conformal coatings exhibit excellent flexibility, moisture resistance, and electrical insulation properties as well as good chemical resistance and give improved performance during thermal cycling tests.

Where most applications require a maximum constant operating temperature of 125°C, the solvent based acrylics and polyurethane technologies are well suited. The synthetic rubber constant operating temperature range varies greatly up to 150°C. These materials behave very well in a wide range of temperatures due to the unmatched thermo-mechanical properties.

Synthetic rubber materials are solvent based and they can be applied using the same process = as used with existing acrylic/polyurethane. Therefore, the upgrade to a higher performance material can be done without the need to change process equipment and, unlike UV curable conformal coatings, synthetic rubbers do not require capital investment in a UV oven, special handling requirements, or lighting.

With so many materials to choose from, it’s not easy to decide which route to take. It’s the interaction between multiple properties that create improvement in performance. The fact remains, though, that product selection is your first and most important step towards achieving maximum thermal shock resistance of your circuit board assembly.

 

For more information call Circuits Central at (888) 602-7264 or contact us here.

PCB CAD Design For Manufacturing Guidelines

When a printed circuit board is manufactured, it’s important that all the parts are executed perfectly. If even one part of the design is flawed, the entire thing will cease to function at best. At worst, the piece might pose a hazard to people. One bad solder can destroy an entire board. But you can adhere to design for manufacturing rules, otherwise known as DFM rules, to keep your solder joints uniform and efficient.

DFM rules cover obvious things like safe handling of your circuit boards and uniformity among your soldering. But there’s another place where they can help: the way you choose to route traces regarding your PCB directly affects potential solder problems, and DFM rules can give you guidance.

This post will dissect the different ways that trace routing has the potential to cause problems so that you can avoid these scenarios in the future.

Acute Angle Traces

One potential problem lies in acute angle traces. This circumstance isn’t guaranteed to lead to solder problems, but it is noted in DFM guidelines.

In traces, an acute angle describes a trace whose corner is larger than 90 degrees. This corner causes the trace to angle back on itself. When a wedge is created, this wedge might trap acidic chemicals when the board is fabricated. The trapped chemicals aren’t always cleaned the way they should be, and they’ll continue to eat at the trace until it breaks or begins to cause sporadic connections.

Tombstoning

“Tombstoning” refers to the effect of a two-pin part being stood up on one of its pads when soldering occurs. This generally happens because the two pads have a heating imbalance when solder reflow occurs. When one side melts before the other, it pulls the piece toward that side instead of holding it flat, which causes the “tombstone” effect.

Heating imbalances can be caused by a myriad of different factors. One of these is the use of different trace sizes on the pads. When the trace is wider, the pad will take longer to heat. If one pad has a wide trace, and one pad has a narrow trace, there will be a heating imbalance during soldiering. You’ll then see the tombstone effect.

Sometimes electrical engineering plans require power traces that are too wide to be soldered by the manufacturer. Because of this, PCB guidelines recommend minimum and maximum widths for the traces used on different types of parts. However, this isn’t guaranteed to solve the problem. To fix the issue, you need to balance your manufacturing and electrical engineering requirements so that the two can work in harmony.

Cold Joints When Soldering

When you route thick traces, you might accidentally create a cold solder joint. This is a joint in which solder has not been correctly reflowed, and therefore the solder does not make an ideal connection. Alternatively, the solder might have pulled back from the connection entirely. This occurs when you route a thick trace with a pad, and the trace size pulls the solder from the pad when the solder needs to be placed on the pad to make connections.

The main solution to this problem is only to use trace widths that are smaller in size than the pad. Certain DFM guidelines make a recommendation that you don’t use a trace with a wider width than 0.010 mils. That said, you’ll need to balance the manufacturing and electrical engineering components of your design to find a harmony that works best for the project.

Use the PCB and DFM Guidelines

PCB guidelines encompass much more than trace routing guidelines. In the same vein, DFM guidelines can help you to use the correct placement techniques for your components, standardize your footprint sizes, and accurately render other pieces of the overall design. These guidelines are implemented to keep your design from being manufactured with errors.

When circuit boards are free of errors during the manufacturing process, this is a sign that the design is good and solid. You’ve taken care to put thought into the design components and the ways they work together.

You might use software for your PCB manufacturing designs. Design software has the kind of advanced routing capabilities that you’ll need to troubleshoot potential manufacturing problems. If you’re a designer, using PCB manufacturing software will help you deliver a sound and DFM compliant design to your manufacturer on the first try. It streamlines the process and helps with your overall efficiency.

Ensuring Your Manufacturing Process Is Compliant With DFM Regulations

Circuits Central is a company which provides solutions to electronics manufacturing problems. Our solutions can be applied to the pre-manufacturing design and refining process, the actual process of manufacturing, and the post-manufacturing distribution process.

Our team of designers and engineers can help you with your circuit board designs. If you’re stuck, a consultation can help you to troubleshoot the problems you’re having. Our engineers are also well versed in DFM and PCB compliance, and they can give you tips to help you streamline your process more efficiently.

When you’re troubleshooting your potential problems, Circuits Central provides the following services:

  • Designs made from scratch for electronic circuits and circuit boards, created with cutting-edge software and experienced methods
  • Huge amounts of detail throughout the entire design process
  • Engineering expertise provided by an engineering team with years of experience
  • Analysis of problematic designs and suggestions for solutions and upgrades
  • Custom creation of a components library
  • Firmware development
  • Digitization of designs
  • DFx consultations

If you’ve already completed your design, the following manufacturing services are available:

  • Twenty-four hour production services
  • Modification, upgrade, and rework services
  • PCB repairs
  • Supply chain planning
  • Rapid prototyping
  • Environmental stress tests
  • Documentation of production
  • Certifications of regulations

To get in touch and find out more about our solutions, call us today at 888-821-7746 or contact us here.


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