Printed Circuit Design & Fab - August 2008 - (Page 4)

OUR LINE M&A: The Ultimate Partnership pcdandf.com Editorial Editor: Kathy Nargi-Toth, 678-589-8866, knargitoth@upmediagroup.com Editorial officE: 2400 Lake Park Drive, Suite 440, Smyrna, GA 30080 678-589-8800; fax 678-589-8850 Editorial advisory Board: Dr. Eric Bogatin, Be The Signal; Michael Carano, OM Group; George Dudnikov, Sanmina-SCI; Jack Fisher, Interconnect Technology Analysis; Happy Holden, Mentor Graphics; Istvan Novak, Sun Microsystems we know just how far the industry would take those words, leapfrogging partnerships by moving right to the main event – corporate consolidation – in a flurry of mergers and acquisitions. Industry watchdogs had predicted M&A activity would cool in 2008, KatHy based on weak support by private equity players, a sluggish economy and nargi-totH the sub-prime mortgage mess. On the contrary, the drive for companies to reinvent and transform themselves, shore up product lines and recession-proof their portfolio through collaboration and consolidation seems strong. In a move that reminded some of the hard-handed tactics of a certain Seattle-based software firm, Cadence went to the media to make its buyout overtures known to the world after Mentor rebuffed them behind closed doors. And Mentor, with acquisition plans of its own, finally brought Flomerics in the fold after fattening a standing offer. Not to be outdone by the EDA biggies, Dow Chemical announced a buyout of all outstanding Rohm and Haas stock for a whopping $15.3 billion in cash. This deal will be the second largest ever in the chemical industry. While Dow admitted a long interest in Rohm and Haas, the mammoth acquisition progressed both quickly and quietly, in stark contrast to the attempts in the EDA space. It might be because of the lengths Dow was willing to go to seal the deal, including a 74% stock price premium and provisions that will help keep the Rohm and Haas brand alive. Many of these marriages are arranged to plug technology holes or add new market opportunities. Both Dow and another recent buyer, Ashland Chemical (which just bought Hercules for some $2.6 billion), said the acquisitions would increase their respective presences in the specialty chemicals market, thus easing reliance on commodity products. (Specialty chemicals are seen as less cyclical than most other segments in the chemical industry.) In other cases, it is simply a way to buy market share, not such a bad idea in a stagnant or declining market, assuming integration goes smoothly. The types of benefits we should expect from consolidation are numerous. One that should leap to the forefront is the higher propensity for R&D. The additional R&D mass of the combined companies can enable product development synergies that would not have happened without the merger. This will allow the new company to improve existing products and technologies within a shortened development cycle. With time-to-market being the fundamental driver, larger and more diverse R&D teams can move new technology faster from the bench into the field with faster successful product development. In the case of Rohm and Haas, Dow’s polymer science expertise will most likely be leveraged in the electronics space. The electronics industry is very R&D dependent, and will certainly gain advantages by this acceleration of new product releases. The largest ROI for a corporation after an acquisition comes from improved operating efficiencies. These economies of scale provide the new, consolidated company with the ability to increase capacity and reduce cost through the resulting larger buying power. This, coupled with the potential for product introduction in new markets, geographic expansion and better representation across more diverse markets, gives the new entity the opportunity to operate at a higher level of efficiency. The new entity has the opportunity to take the best practices from each of the old companies and bring them forward to improve overall performance. And while we all know these ventures will most likely pay dividends in the long run for the companies involved and the stockholders, we should also expect that these newly minted 800-lb. gorillas will be in a better position to provide us – the customer – with products and services that not only get the job done, but delight us. If they fail to do this, their efforts to improve corporate profitability and expand sales will quickly be for naught as we search out others who stand in the wings waiting for the opportunity to prove that bigger isn’t always better. W e’ve been talking for months about collaboration. Little did contriButing Editor: Dr. Hayao Nakahara columnists: Bruce Archambeault, Peter Bigelow, Michael Carano, Dominique Numakura, Charles Pfeil, Dr. Abe Riazi, Susy Webb Production art dirEctor: Katherine Haddox, khaddox@upmediagroup.com production managEr: Javier Longoria, jlongoria@upmediagroup.com SalES salEs associatE: Kamden Robb, 678-589-8843, krobb@upmediagroup.com KorEa salEs: Young Media Inc., +82 2 2273 4818, fax +82 2 2273 4866, ymedia@ymedia.co.kr print rEprints: Edward Kane, FosteReprints, 866-879-9144 ext. 131, fax 219-561-2009, ekane@fostereprints.com ElEctronic rEprints: pcdf_reprints@upmediagroup.com list rEntal: Jennifer Schuler, 918-496-1476, fax 918-496-9465 EXHiBit salEs: Kamden Robb, 678-589-8843, krobb@upmediagroup.com; Frances Stewart, 678-817-1286, fstewart@upmediagroup.com WEBinars: Frances Stewart, 678-817-1286, fstewart@upmediagroup.com, pcbshows.com/webinars circulation dirEctor of audiEncE dEvElopmEnt: Jennifer Schuler circulation and suBscription inquiriEs/ addrEss cHangEs: fax 918-496-9465, jschuler@upmediagroup.com uP MEdia GrouP, inc. prEsidEnt: Pete Waddell vicE prEsidEnt, salEs and marKEting: Frances Stewart, fstewart@upmediagroup.com vicE prEsidEnt, Editorial and production: Mike Buetow, mbuetow@upmediagroup.com spEcial projEcts managEr: Ronda Faries, 678-589-8827, rfaries@upmediagroup.com Printed Circuit Design & Fab is distributed without charge to qualified subscribers. 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Table of Contents Feed for the Digital Edition of Printed Circuit Design & Fab - August 2008

Printed Circuit Design & Fab - July 2008 Contents Our Line Market Watch Around the World Happenings ROI Tip Jar Software Performance Interconnect Strategies Final Finish Forum Product Development Challenges in a Global Market Innovative Modeling Supports Co-Design of the Power Supply Chain, Part 2 Low-Loss Fluoropolymer Copper Clad Laminate Qualifying PCBs Outsourced in Asia Copper Plating and Microvia Fill for Advanced PCBs Off the Shelf Marketplace Ad Index BGA Bulletin

Printed Circuit Design & Fab - August 2008

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