Signal Integrity Journal recently caught up with Jeff Waters to check in on his progress over the last two years since he took over as president and CEO of Isola Group discussing improvements in their operations and new products.
SIJ: You took over the helm at Isola a couple of years ago, what changes to the company’s strategy have you made during that time?
JW: When I started back in 2016, our push was much more about fixing the operational and structural issues that were dragging the company down. We focused first on bringing product development process and rigor to R&D, which I’m pleased to say two years later has led to competitive released products that are manufacturable and work as marketed, and new products in development that will excite the market and come on schedule. We also overhauled our regional structure to become a global one, making our customer support and relationships match our customers’ needs, as they continue to be increasingly trans-continental. Fixing our operations is very much a work in progress, as we use quality processes and Lean manufacturing techniques to get more competitive in costs, lead time and quality. And lastly, we cleaned up our balance sheet through a capital restructuring, and cleaned up our North American operation through what will be a significant upgrade of our Arizona manufacturing footprint.
With the company’s engine operationally stabilized, we’ve embarked on a market strategy that has us pursuing breakthrough technology to address the growing markets in cloud communications and automotive electrification and autonomy. We’ve got exciting plans that will unfold over the next few years.
SIJ: Isola recently sold their manufacturing facility in Chandler, AZ – what are your plans to transition to the new facility coming online in 2020 and motivations for making this move?
JW: Our factory in Arizona was built over four decades ago when the landscape of North American PCB manufacturing was geared toward volume. As the market shifted to prototyping and early volume, our factory wasn’t architected to meet the low-volume / high mix customer demands and under performed in both quality and lead times. The sale of that factory and the building of a new quick-turn facility will position us to be an even greater asset to our market leading OEM customers and their quick turn printed circuit board suppliers.
SIJ: You have previously mentioned the one strength of Isola being its global footprint – how is that footprint tailored for the major markets you serve?
JW: As I highlighted earlier, our major markets are automotive and communications, and for our customers, their winning in those markets is all about time to market with differentiated technology. So enabling that means our footprint is more than just factories, it’s also R&D and technical support being provided locally.
For manufacturing and support, it’s all about having local people and supply to get our customers from idea to shipping product in as little time as possible. That’s why, for example, you saw the push for us to change up our manufacturing in Arizona to service the quick-turn market. It’s also why you see us with such a commitment to Asia volume manufacturing with plants in China and Taiwan.
For product research and development, in Germany, our team partners with the leaders in automotive to drive our global strategy in high temperature materials. In North America, the focus is in cloud communications, and our teams there develop our high-speed digital materials to the latest and greatest products from the world leading OEMs in that space. Both North America and Europe partner in our RF materials give both automotive and communications requirements. And last but not least, our product development teams in Asia provide global leadership in leveraging a more cost competitive supply base to help us deliver the best technology at the lowest cost.
SIJ: What are the most common SI/PI applications questions or challenges that you are hearing from your customers?
JW: In RF, there is a very strong push for cost-effective solutions for 77 GHz radar applications for automotive. The solutions in place today are costly, yield poorly in the PCB shops, and have excessive lead times. Our AstraMT77 product is getting a lot of traction in this space and we will begin shipping in volume in 2019.
In communications, it’s all about better noise performance at more competitive costs. Our newly released 415HR material, a lower noise successor to our IS415 product, will see a lot of growth in 2019 and 2020 in the next generation of servers. Our Tachyon100G material is seeing dramatic growth in a variety of applications, led by high-speed backplanes, high performance computing, and development activity in 5G telecom infrastructure. I should add that in addition to noise performance, there is a very high bar set for CAF performance, especially with the leading communications customers.
SIJ: You mentioned growth with Tachyon 100G, what benefits does that material bring relative to the competing materials in the market?
JW: Earlier this year we were able to meet the stringent CAF performance targets set by the leading OEMs in the market – something that few have been able to achieve. Combining this with competitive pricing and better than average noise performance, Tachyon now meets the requirements of the most aggressive applications, leading to a dramatic increase in qualification activity with both OEMs and the board shops. As the customers have begun using the material, they’ve discovered its superior flow and fill properties as well as superior sequential lamination capabilities – all of this combines to make for a very attractive product in a very hot growth area.
SIJ: What kind of challenges are you facing in Asia versus the US?
JW: Given that we have a large local footprint in Asia, we tend to do well when we have competitive products. With the progress we’ve made in our transformation, this is coming together well and we’re seeing strong year-on-year growth in Asia. We do have a relatively lower market share in Asia as compared to North America and Europe, so we don’t benefit as much from incumbency.
SIJ: Could you give us a general roadmap of development for Isola over the next few years?
JW: We spent the better part of 2016 and 2017 cleaning up the new products to ensure they can be used in the most stringent of applications. With that progress, we’ve seen over 60% growth each of the last two years, with the same expected for 2019. We’re engaged closely with lead OEMs on the next generation “extremely low loss” material, and are in sync with their timing needs for their first evaluations. We’re also close to releasing halogen-free versions of our high-speed digital products, and are in research on a new material in the RF space to proceed Astra MT77.
SIJ: Any parting comments to potential customers?
JW: If it’s been a few years since you’ve last evaluated us as a strategic supplier, I ask you to consider us again. Our products now perform to the highest specifications, we’re delivering better quality with improved lead times, and we’re investing for an even higher performing engine going forward. We’d love to have you back.