Mr. Laminate Tells All: Good Morning, Vietnam!

Many electronics-based OEMs and their supply chains are looking for China alternatives in the current economic and political landscape. Of all the remaining locations possible in Southeast Asia, Vietnam is coming to the forefront as a viable choice for successful export manufacturing. Every day, we see evidence of large OEMs shifting their focus to Vietnam.

For example, VinGroup just announced that they plan to manufacture four smartphones from their new facility (VinSmart) in Haiphong with a capacity to produce 5 million phones a year in Phase 1. VinGroup also announced their plan to build their own brand of automobiles in Vietnam (VinFast). KeyTronic of Spokane Valley, Washington, plans to lease a plant in DaNang in the middle of Vietnam for PCBAs for production in June 2019. Meiko Electronics—one of the biggest PCB shops in the world—has a major plant near Hanoi to support the automotive industry. Vietnam is now a hotbed of plants to manufacture PCBs and PCBAs. The question now is, “Who will be the first base-materials supplier to build a plant in Vietnam to make copper-clad laminates and prepregs?”

There are a number of reasons why copper-clad laminate and prepreg manufacturing in Vietnam makes sense. The first is that Vietnam has a well-educated and motivated workforce. The literacy rate including the ability to do simple arithmetic in Vietnam was 94.5% according to UNESCO in 2015. This is due to an education system that requires children to attend elementary and secondary school, and are continually sorted based on the results of yearly standardized tests. Think of it as a real-life Hogwarts School sorting hat based on scholastic scores. Each year, students are assigned opportunities to attend schools based on their test scores. Children with the highest scores are afforded the best schools to further their advancement.

At the same time, parents push their children into taking extra courses to gain an advantage within the testing system and over other students. The school day typically begins at 7:00 a.m. for most children. The schools are generally within walking distance from their homes, making it possible to go home and have lunch as well as a quick nap. However, once the official school day is over, many children have extra classes in such topics as English, math, and music. Some do not return home until 8:00 or 9:00 p.m. Saturday is a normal school day, and many also have extra classes on Sunday. For this reason, children are primed for success and are not spoiled brats when entering the workforce, unlike the one-child system. Adults born before 1990 remember the hard times in Vietnam and are grateful for the opportunities that come their way.

Of course, the main objective in transplanting manufacturing facilities is to find cheaper places to operate. Vietnam makes every top-10 list of affordable countries in which to retire. From housing to taxes and food, Vietnam shines as a place where your money can go far. For example, the Hilton Hotel in Hanoi and the Rex Hotel in Ho Chi Minh City—both five-star properties—are less than $125 USD per night for two people. A bowl of pho noodle soup at a street vendor is about $2.50. The famous Banh Mi sandwich is $1.65. The public bus costs 30 cents no matter how far you ride it. Cheap taxis including GRAB taxis (and GRAB motorbikes for a single passenger) are everywhere. Of course, there is the normal cadre of “international cuisine” here including McDonald’s, Burger King, Pizza Hut, Dominos, Starbucks, KFC, and the Hard Rock Café.

Hourly wage rates are exceptionally low, but still provide an adequate standard of living for most people in the major cities and suburbs. Saturday is a normal workday in manufacturing facilities. The Vietnam government can provide the economic considerations for locating here, so I do not need to go into that part in detail. But I can assure you that the Vietnam numbers will look attractive if you are currently producing in China, Taiwan, or Singapore.

The culture is also conducive to a stable, productive workforce. The Vietnamese people work hard and seem to be quite happy at doing similar activities daily. They come to work every day and feel that it is their job is important to the overall production scheme. Many of the women are very conservative and have demonstrated to be first-class employees at all levels of an organization. Historically, men have been the traditional wage earner of the family, but in the last 20 years, Vietnamese women have become better equipped and many have founded their own companies. The business style in Vietnam is very direct and frank (think German), which also helps during negotiations.

Vietnam is a destination in Southeast Asia where foreigners feel comfortable. It is one thing to feel safe in a country, and although Vietnam is a communist country—and there is ample evidence of this every day—foreigners are made to feel comfortable. Hanoi, DaNang, and Ho Chi Minh City (among others) are tourist destinations for people all over the world. Therefore, the culture is welcoming to everyone. The cities are modern with all the amenities that westerners and Europeans appreciate. The countryside is beautiful, and the beaches and resorts rival any in the world today.

What are the negatives about Vietnam? One, for example, is you cannot go around town criticizing the government (similar to China). Secondly, the frenetic scooter and motorbike traffic is a little hard to get used to, so crossing the street may be a little intimidating at first. Third, the weather is a lot like Miami or Houston—hot and muggy the year round. In terms of money, it is weird trying to get used to carrying 100,000–500,000 banknotes in your wallet as the exchange rate is about 23,500 Vietnamese dong to one USD. Finally, there are no suppliers of woven fiberglass, copper foil, or epoxy resin here. However, Taiwan is also limited with a lack of these major building blocks for copper-clad laminates, but the CCL suppliers seem to be doing just fine.

The bottom line is that if your company is looking for a cheaper place to manufacturer copper-clad laminates and prepregs and where your transplant employees would be happy, you cannot go wrong in Vietnam. 

Douglas J. Sober is the president of Essex Technologies Group.

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2019

Mr. Laminate Tells All: Good Morning, Vietnam!

01-25-2019

Many electronics-based OEMs and their supply chains are looking for China alternatives in the current economic and political landscape. Of all the remaining locations possible in Southeast Asia, Vietnam is coming to the forefront as a viable choice for successful export manufacturing. Every day, we see evidence of large OEMs shifting their focus to Vietnam.

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2018

Mr. Laminate Tells All: IPC-4101 Validation Services—The QPL Lives Again

04-24-2018

When the electronics industry transitioned from the military standard MIL-S-13949 to the industry standard IPC-4101 in 1997, the electronics supply chain lost something fundamental: the Qualified Products List (QPL) for all the laminate and prepreg materials.

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IEC TC111 and the Ban on PTFE: Update

01-18-2018

When Steve Tisdale and I last wrote about this subject, TC111 of the International Electrotechnical Commission (IEC) and the ad hoc group, PT63031, was preparing a draft of a standard that would effectively ban PTFE (polytetrafluoroethylene) materials from electronics.

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2017

PTFE is About to be Banned by IEC TC111

07-10-2017

There, I said it. Technical Committee 111 of the International Electrotechnical Commission (IEC) is preparing to effectively ban PTFE (polytetrafluoroethylene) materials from electronics. As history goes, the electronics industry has focused on only two of the four halogens (bromine and chlorine) to be limited in order to be called “halogen-free” or more accurately “low-halogen.” But now, fluorine is being dragged down too, just because of its location in the periodic table.

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2016

The Certification of IPC-4101D Polyimide Base Materials: Buyer Beware

11-22-2016

At one of the IPC meetings held in Rosemont, Illinois, one of the hot topics of discussion at the Laminate and Prepreg Subcommittee was the three polyimide specification sheets.

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CEM-3 Reinvents Itself (Again)—or, Atari Game Boards on eBay?

02-10-2016

CEM-3 was unusual as the reinforcement was a combination of woven fiber-glass fabric and fiber-glass paper. The resin system was a dicy-cured epoxy resin yielding a Tg the same as FR-4 at the time, of 110–120°C range. Because it was all epoxy and all fiberglass, the properties were electrically identical to those of FR-4.

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Who Would Like a Mil-Spec Audit?

01-05-2016

I remember when IPC-4101 was completed and released in December 1997 and the question came up “should IPC create a policeman program to enforce it?” To a person that helped create IPC-4101, absolutely no one wanted such an audit program ever again. Including me and the IPC staff liaisons. Maybe we should have rethought that position.

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2015

Mr. Laminate Tells All: Where in the Holy Halogens did 900, 900, 1500 Come From?

11-12-2015

The 900, 900, 1500 is not a combination to an enormous safe that contains the remains of Jimmy Hoffa, nor is it the weight of three elephants at the San Diego Zoo in kilograms. The 900, 900, 1500 is the maximum parts per million (ppm) of bromine and chlorine and the total bromine and chlorine in a material that can be defined as “halogen-free” in the electronics industry today. But where did these requirements come from? Clearly, 900 ppm of bromine or chlorine is obviously not halogen-free. Some would argue that it is not even low-halogen at all.

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