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Dr. Sundar Kamath, Senior VP (Technology)
Sanmina Corp., San Jose CA
IESA Visions Summit – Feb 4 2014 Bangalore
Realizing the ESDM Potential in India (ESDM - Electronics System Design & Manufacturing)
2
Global Electronics HW Manufacturing
A Trillion$ Industry that keeps growing
Skamath02’14
$B 2013 2017 CAGR
Diagnostics 28.1 35.7 6.1%
Monitoring &
Surgical 20.6 23.7 4.6%
Therapeutics 12.8 14.5 4.0%
Total 61.59 73.9 5.1%
Electronics Manufacturing: 2013 - 2017 CAGR for Some Industry Verticals
$B 2013 2017 CAGR
Flight
Navigation 18.8 26.6 7.2%
C3 18.3 23.4 6.3%
Weapons 16.96 21.5 6.4%
In-Flight
Entertainment 10.2 13.3 6.9%
Total 64.3 84.9 6.7%
$B 2013 2017 CAGR
Servers 31.1 44.1 9.1%
Storage 12.7 17.8 8.8%
Workstations 9.1 11.5 6.2%
Total 52.9 73.5 8.5%
$B 2013 2017 CAGR
Cellular Handsets 143.6 190.6 7.6%
Cellular
Infrastructure
45.7 58.2 6.4%
Other Phones 9.5 11.8 5.9%
Enterprise LANs 19.8 24.4 5.8%
WLANs 4.8 6.1 6.5%
DSL/Cable Modems 6.6 8.7 7.2%
PBX/Other CPE 15.2 19.4 6.4%
Carrier-Class
Equipment
34.2 43.2 6.4%
Other 7.6 9.5 5.6%
Total 287.0 371.9 7.0%
3 Skamath02’14
OEM – EMS - ODM: who does what…
OEM ($700B)
Eg. IBM, GE, AMAT, NSN,….
Own the Design, IP, Brand & Product Liabilities
Market & Sell the product, carry product inventories
Highest margins
Often use outsourced manufacturing partners
ODM ($150B)
Eg. Quanta, Compal Wistron, Inventec, ….
Offer Design / IP / Product Roadmap for OEMs to pick from
OEMs will Brand & Sell,
ODMs Carry Inventory, TTM benefit to OEM
Generally better marg ins than EMS model; ODM owned by Taiwan Inc.
EMS ($250B)
Eg. Sanmina, Flextronics
Foxconn, Jabil, ….
May co-design with OEM
Manufacturing Services, Supply chain, Post-manf services , repair,…
Lowest margin, highly competitive, Outsourcing common in Comms, Computing, Consumer, Multimedia,….
4 Skamath02’14
Top 10 EMS Companies (2012)
CY 2012 Market Share
Foxconn
Flextronics
Jabil
Kinpo Group
Sanmina
Celestica
Kaifa Tech
Benchmark
Plexus
Universal Scientific
Foxconn $132B Flextronics $24.6B
Jabil $17.5B
Sanmina $6B
Celestica $6.5B
Kaifa Technology $2.6B
Plexus $2.3B
Universal Scientific $2.1B
China Singapore USA China USA Canada China USA USA China
Top 10 Worldwide $202.7B China 71% N America 17% Singapore 12%
Kinpo Group $6.6B
Benchmark $2.5B
Source: MMI March 2013
5 China rules the EMS market Skamath02’14
Sanmina Overview
from Silicon Valley startup in 1980
to $6B global company today
25 countries, 44K employees
Integrated Manufacturing Services
Logistics & Repair Services
Design Engineering Services
Component Technologies
Products
6 Skamath02’14
Key Markets: Long-term Focus
Complete Design, Technology & Services Solutions
50% sales #1 EMS SCI Technology
7 Skamath02’14
Sanmina: Diversified, Strong Customer Base
8 8 Skamath02’14
Logistics and Direct Order Fulfillment
Manufacturing Services (EMS)
Optical , RF Components
Collaborative Design and Engineering
Interconnect Mechanical Systems
Products and Services
Sanmina: Focus on Technologies, Products & Services
Design &
Engineering
Services
Interconnect
Systems (Printed
Circuit Boards,
Backplanes,
Cables)
Mechanical
Systems (Sheet
metal, Precision
Machining, Die
Castings, Plastics)
Optical
Components,
RF & Micro-
Electronics
SCI
Technology
(Defense &
Aerospace)
Newisys Data
Storage
(JDM / ODM)
Viking
Technology (DRAM, Flash,
SSD Solutions)
Sanmina Global
Services (Repair
& Logistics)
PRODUCT
TECHNOLOGY
PRODUCT
TECHNOLOGY
PRODUCT
TECHNOLOGY
COMPONENT
TECHNOLOGY
COMPONENT
TECHNOLOGY
COMPONENT
TECHNOLOGY
9 Skamath02’14
Vertically Integrated Manufacturing Services
One IT system worldwide
Manufacturing systems that drive quality and operational excellence
Design &
Engineering
New Production
Introduction Manufacturing Test Services
Logistics &
Repair
Cable
Assemblies
PCB & Backplane
Assembly & Test
Optical, RF
Microelectronics Printed Circuit Boards
Backplane Fabs
Precision
Machining
Enclosures
Racks, Chassis System Integration
BTO / CTO
Injection Molded Plastics
Aluminum die castings
10
Memory Modules
Storage Arrays
Global Operations: Built Around Our Customers
North America Austin, TX
Carrollton, TX
Costa Mesa, CA
El Paso, TX
Foothill Ranch, CA
Fort Mill, SC
Fremont, CA
Huntsville, AL
Kenosha, WI
Laredo, TX
Louisville, CO
Manchester, NH
Newark, CA
Ontario, Canada
Ottawa (Kanata), Canada
Owego, NY
Salt Lake City, UT
San Jose, CA
Toronto, Canada
Turtle Lake, WI
Asia Batam, Indonesia
Chai Chee, Singapore
Chennai, India
Depot Close, Singapore
Hong Kong, China
Kunshan, China
Melbourne, Australia
Pathum Thani, Thailand
Penang, Malaysia
Penjuru, Singapore
Shenzhen, China
Suzhou, China
Wuxi, China
Yasu, Japan
Europe Basingstoke, UK
Brno, Czech Republic
Fermoy, Ireland
Gunzenhausen, Germany
Haukipudas, Finland
Ma’alot, Israel
Miskolc, Hungary
Örnsköldsvik, Sweden
Port Glasgow, UK
Salo, Finland
Tatabánya, Hungary
Latin America Bogota, Colombia
Buenos Aires, Argentina
Campinas, Brazil
Guadalajara, Mexico
Juãrez, Mexico
Mexico City, Mexico
Monterrey, Mexico
São Paulo, Brazil
Close to our Customers: Engineering, Product Launch & Production
75 Sanmina Facilities Extend Your Global Reach
Africa Johannesburg, S. Africa
Skamath02’14 11
Communications Networks: End to end solution
Active
Components
Modules
Blades
Subsystems
Passive
Components
12
Leadership in Communications Equipment Manufacturing:
Wired, Optical, Wireless
Full system
Integration
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Ultrasound
Blood Glucose Meters
Portable
Monitoring
Dermatological
Laser Systems
Blood Separators
CT & Nuclear Medicine
Middle Ear
Infections
In Home
Monitoring Cosmetic &
Therapeutic
Respiration
Systems
Blood/Molecular
Diagnostics
Patient Tables
Medical Systems: Domain & Product Competencies
Mobile/Portable
“Core” Medical Large Systems Invasive, Implanted,
Disposable Products
• GERD Disposables
DEVICES AND DISPOSABLES • RF Urinary Incontinence
• RF Bowel Therapy
• Electronic Injectors
• Infusion Devices
• Components and CRM
13 Skamath02’14
Industrial, Capital Equipment, Cleantech
X-Ray Baggage Inspection
Industrial Printing
Semiconductor Fab
Planarization Tool
Gas Analyzer
Oil & Gas industry
Semiconductor Process
Chamber
Biotech Instrumentation
Wind Turbine Pitch Control
Solar Inverter Cabinets
LED Lighting
14 Skamath02’14
15
Broad Products Capabilities and Mix
Radiological Detection
Advanced radiation
Detection and monitoring
Aircraft Systems
Processors
Data concentrators
Communications
Tactical Communications
C4ISR
Fiber Optics
Dispensers
I/O bus technology
Defense & Aerospace Products
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Complete Storage Products
Enterprise, Cloud
datacenters - Backup and
High Performance Products
Turnkey Product Design
Complete Solutions
Racks and Enclosures
Product Certification
Functional Testers
BTO/CTO, Repair
Newisys: Computing & Storage
Power Supplies
Fan Trays, Cooling
Servers, Processors
PCBS & Backplanes
Rack Scale Computing & Storage
16 Skamath02’14
17
Non-Volatile memory, DRAM and
SSD technologies
Full Custom Design Solutions
Advanced Packaging Technology
Enterprise, Network
Infrastructure, Embedded, and
Defense & Aerospace markets.
Innovation & IP:
ArxCis-NV™DIMM, DDR3; non
volatile, power fail safe
SATADIMM™, SSD in a DIMM.
Enterprise SSD with 75% of a
traditional 2.5-inch SSD
Network Switches
Viking: High Performance Memory Modules
Servers
Storage
Military Electronics, Flight Recorders
ATM’s, Kiosks
17 Skamath02’14
What we offer in India:
World class manufacturing
Product design services
Muthu Sivan, MD Sanmina India
Chennai Plant - Oragadam SEZ
18 Skamath02’14
Market Sectors
Medical
Communications
Aerospace & Defense
Automotive
Multimedia
Clean Tech
Industrial
Storage & Computing
Sanmina INDIA - An Overview
Manufacturing Capabilities
PCBA & Test
System Integration
Configure-to-Order (CTO)
Build-to-Order (BTO)
New Product Introduction (NPI)
Component Engineering
Supply Chain Localization
Repair and After Sales Service
Design & Engineering Services
Turnkey Product design
Electrical, Mechanical, Thermal
PCB Design, Signal Integrity
Software / Firmware
Test Engineering
Value Engineering
Regulatory Compliance
ISO 9001, AS9100, ISO 13485
Industry
Certifications EN ISO 13485 TL 9000 EN/AS 9100 ISO 9001 ISO 14001 ANSI/ESD -S20.20 OHSAS 18001
100 acres ORAGADAM SEZ CHENNAI MANUFACTURING CAMPUS
19 Skamath02’14
Sanmina India Design Center MEPZ Tambaram Chennai
Sanmina ESDM Model in India
Examples of Design projects from Chennai team for the Global market
Domain Customer Location
Design Project / Type of Engagement Sanmina Manuf. Plant
Networking USA Design & Manufacture of 100GigE-loop Back tester PCBA ,
& thin client PCBA
Shenzhen CHINA
Networking France Design & Manufacture of IP secure gateway product Patum Thani THAILAND
Networking USA Design & Manufacture of 10GigE Top of the rack SDN switch San Jose CA (NPI)
Singapore (PCB), Penang MAL
Telecom Italy Design & Manufacture of high speed 38 layer backplane Owego NY (PCB Fab)
Kunshan CHINA (BPA)
Storage USA Design & Manufacture of I-O module for Storage Appliance Guadalajara MEXICO
Aerospace France Reengineer & Manufacture of aircraft seat actuation controller Patum Thani THAILAND
Aerospace USA Redesign of in-flight entertainment media controller Patum Thani THAILAND
Medical USA Automatic Functional Tester for neonatal monitoring device Huntsville AL
Medical USA/INDIA Automatic Functional Tester for MRI system boards Chennai INDIA
Medical USA Automatic Functional Combo Tester for infant bed warmer Penang MALAYSIA
Multimedia USA Design and manufacture of Set top box (turnkey) Guadalajara MEXICO
Industrial Holland Design and manufacture of LED lighting product Guadalajara MEXICO
Industrial Austria Turnkey development of Digital Stamp (turnkey) Chennai INDIA
Semiconductors USA Chip testing & evaluation boards, reference designs (multiple) San Jose CA (Fab & Assembly)
20 Skamath02’14
Sanmina India Manufacturing: Product experience
Radio Front-end Filters
BTS Radios & System Modules for GSM/EDGE , WCDMA & LTE
Optical systems
High Performance Blade Servers
Storage systems
POS Terminals
PCBA’s for Biometric Scanners
Infant Care Products
PCBA for MRI Scanners
PCBA’s for Microwave Receivers
PCBA’s for Microwave Transceivers
In-Flight Entertainment Servers
In-Flight Passenger Units
Energy Meters
Equipment Efficiency Controllers
Elevator Controllers
PCBAs for Wind turbine Controllers
PCBA’s for Green Energy Generators
21
Connectors
Cables
Injection
Molding
Tools
Plastic
Components
Rubber
Parts
Keypads
Fasteners
Pallets
Cushions
& Foams
Labels
Machined
Components
Die Castings
Sheet Metal
Enclosures
22
Sanmina India: Supply Chain Localization
Skamath02’14
Chennai plant recognized by Indian Government & Customers
Receives national awards for excellence in electronics manufacturing - Export
Excellence & Quality Excellence (Golden Peacock, Rajiv Gandhi)
Receives Customer awards for Delivery & Quality Excellence
Recognition for Quality & Export Excellence
Mr. Sam Pitroda, Advisor to the Prime Minister of India, presents the Excellence in Export award to Mr. Muthu Sivan,
Managing Director of Sanmina India
23 Customer Award for Successful Launch
of HPC Servers Customer Award for POS Quality
performance (Zero returns)
Rajiv Gandhi National Quality Award, April 2013
Skamath02’14
Sanmina has demonstrated
world class ESDM
is possible in India
What’s needed to
Grow ESDM in India?
24 Skamath02’14
Climate in Tamil Nadu for ESDM
• Good Logistics connectivity to Eastern Asia
• Effective Single Window Clearance for FDI’s
• Uninterrupted Power Supply Committed to Investors under MoU
• Support for Industry – Labor Relations
• Infrastructure improvement projects - Metro, Airport expansion etc.
• Excellent pool of Professional and Educational Institutes
• Surplus skilled, English speaking workforce with strong work ethics
25 Skamath02’14
Government Policies and Incentives for ESDM
National Policy on Electronics 2012
National Manufacturing policy
Modified Special Incentive Package Schemes (M-SIPS) for ESDM
Preferential Market Access for Domestically Manufactured Products
Setting up Electronic Development Fund to promote R&D
26 Skamath02’14
Stakeholders: Role of Government & Industry
27 Skamath02’14
• Simplify tax/duty and provide
incentives to local manufacturing
• Proactive Infrastructure
Development (roads, power, water,…)
• Promote “Brand INDIA”
• Accelerate Labor reforms
• Incentives for companies on skill
development / training expenditure
• Develop and Mandate standards to
curb inflow of sub-standard
and unsafe electronic products into
the country
Role of Government • Build Robust system for Quality and
Manufacturing Processes
• Reduce New Product Introduction
Time, & Time to Market
• Be highly cost conscious & competitive
• Deliver with world class precision,
timeliness AND Quality
• Enhance the competitiveness of local
suppliers
• Help customer to migrate into local supply
base
• Be socially responsible to boost Education,
Infrastructure, Technology, & Environment
Role of Industry
A MUST for ESDM success
Creating an Indian ODM Industry base:
A 7-Step Approach
28 Skamath02’14
Typical ODM Products – Top Markets
29
Markets Typical ODM Products
Computing & Storage Motherboards, Graphics & Networking cards, Laptops, Tablets, Servers
Printers, Peripherals, Displays Storage appliances
Communications (Telecom, Networking)
LAN switches, hubs, routers WLAN cards, access points
WiFi products NW security appliances
Consumer Handsets, Smartphones, Digital Cameras USB drives, Memory cards
POS terminals, Set top boxes
Components PCB, actives/passives, chipsets, HDD, SSD, memory modules, LEDs,
Chassis, connectors, power supplies, cabling
Skamath02’14
$B $B
Pegatron Quanta Compal Wistron Inventec Qisda Venture Kinpo
Electronics AmTRAN
Ability Enterprise
Total
23.0 20.5 16.8 16.2 11.0 2.9 1.3 1.1 .7 .6 94.1
Taiwan
Taiwan
Taiwan
Taiwan
Taiwan
Taiwan
Singapore
Taiwan
Taiwan
Taiwan
Source: MMI Newsletter Dec. 2013
Top Ten ODMs
$0
$5
$10
$15
$20
$25
Pegatron Quanta Compal Wintron Inventec Qisda Venture Kinpo Electronics
AmTRAN Ability Enterprise
Billions
Nine-Month 2013 Results
Taiwan totally dominates the ODM business, no competitors
30 Skamath02’14
31
STEP 1 – Learning from Taiwan’s success
Build a domestic ODM industry – become self reliant & self sufficient by 2025
Study Taiwan’s 30 year history in growing ODM
Takeaways / lessons for India model?
Business schools, Industry / Trade groups, Govt agencies
Work together on understanding the Taiwan success story
Skamath02’14
32
STEP 2 – Identify market needs
Build a domestic ODM industry – become self reliant & self sufficient by 2025
Identify Product & Technology areas
critical to India’s consumption needs
India’s domestic market needs are not same as ROW
Cost, function, geography, culture, usage trends all matter
(IESA Product Needs report – Dec 2013)
Skamath02’14
33
STEP 3 – The ODM Roadmap
Build a domestic ODM industry – become self reliant & self sufficient by 2025
Define a 10 year Roadmap for establishing
India’s world class ODM industry
Efficient collaboration & resource application, Market relevance,
Staying the course in reaching goals & achieving results
Review the roadmap on an annual basis
Skamath02’14
34
STEP 4 – Offer Incentives
Build a domestic ODM industry – become self reliant & self sufficient by 2025
Put in place a clear & simple set of incentives for
aggressively encouraging the ODM sector
Apply lessons from past incentive programs & policies
Keep it simple, non-bureaucratic, easy to understand & implement,
Motivation is to create a new industry, achieve measurable results,
With tangible rewards for the ODM stakeholders
Skamath02’14
35
STEP 5 – Bring in Successful Partners
Build a domestic ODM industry – become self reliant & self sufficient by 2025
Selectively partner with global ODMs who wish to
genuinely commit to creating this industry
Long term commitment is a pre-requisite
All participants must see financial gains – its not a charity drive
Large Industrial houses can take the lead in JVs, partnerships
Skamath02’14
36
STEP 6 – Develop the ODM Ecosystem
Build a domestic ODM industry – become self reliant & self sufficient by 2025
Create a large scale, well planned skills and
infrastructure ecosystem to support ODM
Focus on Design, Supply chain, Manufacturing, Quality
Component industry is critical: Semiconductor devices,
Materials, Substrates, PCBs, Packaging, Assembly & Test
Automation, Equipment, Spares, Maintenance…
Skamath02’14
World wide PCB Production: India needs to be a global player, to support ESDM infrastructure
37 Skamath02’14
38
STEP 7 – Create ODM campuses
Build a domestic ODM industry – become self reliant & self sufficient by 2025
Implement a national collaborative model:
create 6-8 ODM campuses across India
Each has a distinct specialty: avoid duplication & effort dilution
Promote best practices & healthy competition
Select locations purely on technical & business reasons
Infrastructure, access to trained skills, healthy industrial climate
Skamath02’14
39
A Seven Step Plan for India’s ODM future
Build a domestic ODM industry – become self reliant & self sufficient by 2025
It is as essential as defense or energy or steel or agriculture….
STEP 1
STEP 2
STEP 3
STEP 4
STEP 5
STEP 6
STEP 7
Learn from Taiwan’s 30 year path to total ODM dominance today.
Identify India’s consumption needs – products, applicable technologies
Define 10 year roadmap for establishing a world class ODM industry
Implement clear & simple incentives for aggressively encouraging ODM sector
Selectively partner with global ODMs who are genuinely interested in India
Create a large scale, well planned skills and infrastructure ecosystem for ODM
Create 6-8 ODM campuses across India, with distinct & complementary specialties
Skamath02’14
Design & Development processes
HW, SW/FW, Electrical, Test,
ID, Mechanical, Thermal, Power
Life Cycle Management (PLM)
Design for manufacturability
Value engineering
Prototyping, New Product Intro.
Validation & Verification
Reliability, Regulatory Compliance
Sustaining Engineering
Environmental/Sustainability, EOL
Supply Chain & Manufacturing
Component engineering
Manufacturing engineering
Process engineering
Test automation
Shop floor IT systems
Inventory management
Agility
Operations Excellence
Quality – Lean, six sigma
Logistics & Repair
40
Product Development Ecosystem Needs for System Design & Manufacturing
Create PD Ecosystem in campus like setting so design & manufacturing
engineers can co-exist >> include Training center with prototyping facility
Skamath02’14