Article

Disruptive technology will transform electronic products with or without EMS

It’s pretty clear that when disruptive technology enters a market the market leaders tend to have the hardest time letting go of what they know while scrappy up-start companies embrace the change, seize the opportunity, and eventually take over the industry. History’s junk heap is full of topline companies and executives who went down with the ship. Change is hard. It requires new thinking and it’s uncomfortable. Having introduced the Occam Process to several major EMS providers, it has now become apparent: they seem to be experiencing a “Kodak Moment.” More on this in a minute.

We first began introducing the Occam Process to EMS providers. It seemed that they were best positioned to take full advantage of the Occam opportunity. We were somewhat surprised by their responses. The first comment was from a consultant who used to be CTO of a major EMS. Right off the bat he said, “it’s too expensive and EMS have very thin margins and wouldn’t be interested.” Next, another major technology exec at a huge EMS said that “Occam was too risky.” Both of these guys knew of Occam and its inventor Joe Fjelstad. They knew Occam was credible. Still, they gave it short shrift. 

In their defense, disruptions are difficult to recognize especially from a comfortable market position. All is well so don’t rock the boat. The more cozy they are, the harder it is to see what’s coming, and there are a ton of rational arguments as to why the status quo is the right thing. Still, there are many folks, like those mentioned, who only see Occam as a new process and an alternative to solder, but they miss the opportunity. They fail to see the bigger picture. It’s not their fault. They haven't been trained properly so they don’t know what to look for. 

If you’re not clear what a market or industry disruption is, certainly the Kodak story is a great example. They invented the digital camera for goodness sake! They could have owned the entire market and thensome. The problem was they made too much money on film. Then there’s Nokia and Motorola who were so focused on building millions of flip phones that they had no idea what was about to be unleashed by the iPhone. Apple as a potential competitor wasn’t even on their radar. Even after the iPhone was launched, they still defended their position stating that the iPhone was nice but it would only have limited appeal. Intel is also famous for dismissing the iPhone and the whole mobile revolution. Crazy!  “There was nothing to worry about,” they all said. “It’s a fad.” How many industries did that one product disrupt and how many companies struggled or went out of business as a result? Intel is still trying to recover.

A big problem with many of these market-leading companies is that their leadership is not being paid to reinvent things. They get rewarded by staying the course, making some incremental improvements and by not taking too many chances. As a result they get their nice salaries and bonuses and then retire, leaving things for the next guy to worry about. The problem is there won’t be anything left for the next guy or gal. Disruptions start slow, under the radar. As the disruptors begin to pick up steam, the incumbents downplay the technology or strategy, defending their position. It’s a classic response. The thing about marker or technology disruptions is that by the time the incumbents come around, it’s usually too late. 

It’s been quite interesting to watch the transportation industry as it struggles to make the shift from gas to electric and how those “incumbents” have, for years, downplayed the threat electric cars posed to their businesses. “This crazy guy, Elon Musk, will never be able to pull this off. He can’t manufacture cars. The market isn’t interested, nobody will buy what he’s selling.” There are a ton of real quotes like this from the ICE (internal combustion engine) company CEOs out there. Now, it’s not that Musk discovered something new. He didn’t. But not having a legacy business to hold him back certainly was an advantage. He also had a very good understanding of what was possible and, putting the pieces together, he changed the world.  Today, we find all major car companies scrambling to catch up. There is a real concern that many won’t make it. Even their newest electric car or truck offerings are years behind the leading edge technology. And, guess what? Those EV market leaders aren’t standing still, either. The legacy guys are in a tough spot. But, it’s of their own making. They did it to themselves! There’s a lesson here.

Disruptions are unforgiving. You either join the revolution or you become a footnote. There is no defense. It’s impossible to compete against disruptive technology. Do your own homework and you’ll see. 

What’s interesting is that just about every technical expert Occam has been introduced to gets it. It makes sense. The problem is, they don’t run the companies. As a result, The Occam Group (OTG) has had to make a stronger business case for Occam, focusing more on reaching out to company leaders. We have to spend quite a bit of time helping them move beyond the process and into the promise: the opportunity to change everything! Still, finding someone adventurous or courageous enough with vision is quite difficult. The entire industry is about to change and few get it. 

Not just a process

When we first started thinking about the Occam Process, we saw it as a much better way to assemble components. And getting rid of solder would be a huge benefit to the industry. That approach was similar to Kodak's understanding of digital pictures. Digital was just another way to take a picture. Kodak didn’t look beyond the photo and missed the opportunity. Now, we’ve come to realize that Occam is not just a solder replacement. It will change the way electronic products are designed and built, not just component assembly. As we looked at the very long list of Occam benefits, it became clear that Occam is about to disrupt the industry.

There might be some confusion as to the difference between a process improvement and a market or technology disruption. A disruptive technology is one which provides a 10x improvement over the existing system. Occam does that! Occam is not just disruptive for component assembly which is where many EMS get hung up. It is disruptive across the board. It changes everything!

Here are a few of Occam’s advantages:

• Solderless - eliminating all the associated defects
• Reverse Order Processing - No pcb, no solder, circuits are integral
• Less expensive - less test, no rework, no pcb
• More reliable - fewer thermal excursions, less heat, no solder, encapsulated, no pcb
• Built in thermal management - metal substrates
• Simpler designs - common grid, fewer circuit layers, superior chiplet solution
• Smaller product designs - 30-50% smaller component assemblies
• Smaller factory process footprint - no soldering, cleaning, rework, no pcb
• Encapsulated - hermetic, solid block
• EMI/ESD mitigation - metal jacket
• New product design opportunities - smaller, lighter, more reliable, less waste
• Security - teardown resistant, EMI/ESD
• Component assemblies in 3D possible

And, this is just the beginning. There is much more to come!

There’s a huge opportunity for those companies and individuals willing to step out of their comfort zone. If you want to join the revolution or learn more, please contact us. If not, we understand, it’s hard. Just remember that within a couple years after its introduction, iPhones took more pictures than all film cameras combined since the invention of the camera in 1816! This is the industry’s Kodak moment.

Ray Rasmussen

Managing Partner

The Occam Group