Ray, congratulations on your pending retirement. Can you talk about how the industry has evolved during your career?
Over the last 35 plus years, I have seen massive change in the electronics supply chain. We have experienced the rapid transfer of production and product from North America and Europe to Asia. Today, the market is truly global and requires both global and local solutions. We have seen innovation move at rapid pace from mainframes to PC's to mobility. The need for speed, cost and reliability have never been more important than today. Investment in development is the key to survival, which is why Isola has consistently increased our investment in R&D.
Can you tell us about the history of Isola and how it was started?
Isola has operated within diverse cultures and international markets for more than 100 years. Our history dates back to the founding of Continentale Isola Werke AG in Germany in 1912. In the 1950s, we began production of paper phenolic copper-clad laminates. A decade later, we began production of copper-clad epoxy laminates, which are the direct predecessors of today’s PCB laminate products.
We have grown globally through ongoing product development efforts as well as through a series of acquisitions, including Allied Signal’s laminate business, which included its prior acquisitions of the laminate businesses of Westinghouse and Fortin. The Company was acquired by private equity investors in 2004. In 2006 we acquired the Polyclad business from Cookson. We have expanded our product portfolio and services to support the evolving needs of PCB fabricators around the world.
We put together this video (https://www.youtube.com/watch?v=zQRSWnvy_WU) for our centennial celebration that provides a more in-depth look at our history.
What is the breakdown in sales of the markets you service (percentages) such as RF/microwave, high-speed digital, services, etc.?
Currently we cover the broadest range of market segments, including FR-4, FR-4 high-Tg, FR-4 halogen- free, high-speed digital, RF/microwave, and high-performance specialty products such as Polyimides, BT and controlled rheology products for military and aerospace segments.
Regarding RF, we have developed a leading presence with our IS680 products in LNB applications used for direct broadcast systems. In the last few years, we have expanded our RF offerings by developing novel products for wireless infrastructure, 24 GHz automotive radar and mm-wave applications, including the emerging applications in the 76-81 GHz range for advanced automotive driver-assist systems. Isola’s I-Tera® MT and Astra® MT products are gaining widespread acceptance as the materials of choice due to their unique technical attributes and low cost of ownership.
High-speed digital is a very successful segment for us and comprises more than 30 percent of our recent revenue base. We believe we have the leading market share in this space with such products as FR408HR, FR408 and IS415. We have also recently launched some groundbreaking products such as Tachyon® and Tachyon® 100G that have enabled designers to obtain channel speeds in the 28-56 Gbps range.
The high reliability segment has been our forte, and we continue to maintain a strong presence in this segment with our flagship 370HR product line. Overall, high performance products represent more than 85 percent of our current revenue.
Isola continues to focus on all core segments, in addition to developing enabling technologies particularly in high-speed digital and RF/microwave materials.
Isola has worldwide operations – how is global R&D coordinated and what benefits does it have for the company?
R&D is headquartered in the U.S. We do have smaller satellite operations in Singapore and Germany to serve local market requirements. Isola, as a material sciences company, is committed to being the leader in the development of advanced products for the PCB/electronics market. We have more than 200 patents and continue to drive innovation for the benefit of our customers. Our global operations, combined with our state-of-the-art R&D facilities in Chandler, Arizona, allow us to respond quickly to our customers’ needs
How about global manufacturing – how does that insure a continuous supply and reduced lead times?
We are strategically located in the key regions for PCB manufacturing. This proximity to our customers allows for rapid deployment of new technologies, shorter lead times and improved service. We have a dedicated engineering team that approves all manufacturing processes at each facility to ensure consistency of quality.
Additionally, Isola’s Lean Six Sigma culture creates a shared responsibility among our employees for quality control and continuous improvement, while at the same time driving down costs. Isola services a very competitive industry, and we need to be best in class in every facet.
Have there been any issues with counterfeit materials – how do you deal with those issues?
We have not had a problem with counterfeit materials; however, we have had issues with patent infringement, and we have vigorously defended our IP. I firmly believe that if you invest R&D resources to develop a product, or process that is patentable, then you must defend your investment. We have also licensed several of our patents to competitors and suppliers, which benefits the industry as a whole.
Isola was featured in Microwave Journal for its new thermoset PCB material for mmWave applications – how has that been received in the marketplace?
The reception in the market has been outstanding. We have been able to generate a lot of excitement by demonstrating improved product performance, while offering a lower total cost of ownership. The microwave industry is changing, and we believe that Isola’s innovative solutions have positioned us to lead the microwave industry in meeting the challenges presented by these changes.
Isola also offers testing and measurement services – can you tell us about your strategy and offerings in the service and customization areas?
We have invested heavily in test equipment and in developing advanced simulation and modeling capabilities. We have the capability to test material properties all the way up to 124 GHz. We have also developed close partnerships and working relationships with some research institutes that extend our ability to test material properties up to 220 GHz. Additionally, our advanced measurement equipment allows us fully to characterize the mechanical and thermo-mechanical properties of materials. We also have a complete suite of tools for computational electromagnetic and computational mechanic characterizations.
Our design-assist and conversion services use a combination of test and simulation data to help our customers select the appropriate materials for their particular applications. The use of the Isola test and design services eliminates a lot of guesswork and design iterations. Designers can use our measurements backed by simulations, and vice versa, with a high degree of confidence. We also take the conversion services a step further by engineering the product attributes either to fit a legacy application or to customize the product to meet a unique requirement. We can cite several examples where we have met the customer’s requirement in a single material-design iteration.
Isola is known for high reliability – what quality and reliability programs and certifications does Isola have in place?
Reliability is built into our products at the design stage. Products such as 370HR, FR408HR, and IS400 demonstrate high reliability as a result of their design attributes. Similarly, the RF-suite of products, such as Astra® MT, I-Tera® MT, are very robust and demonstrate very little change in dielectric, thermal and mechanical properties over broad ranges of frequency, temperature and humidity. Our products are tested using very demanding test vehicles for thermal, mechanical, electrochemical and electrical reliability. Quality is built into every product design and manufacturing process to ensure conformance with our customers’ requirements. To accomplish this, we implemented three quality strategies: planning, quality control and continuous improvement.
We have manufacturing facilities in Europe, Asia and the United States. Each manufacturing plant is certified at a minimum to the ISO 9000, and many facilities are certified to TS 16949 for their quality management systems and to ISO standards for the Environment and Energy. We have dedicated Global Lean and Quality Teams staffed in every region and facility. These teams focus on enhancing value to our customers through eliminating waste, standardizing processes standardization and reducing product variation using Lean Manufacturing and Six Sigma disciplines.
What are your major growth markets and regions for the next couple of years?
Major growth markets for Isola are for RF/microwave materials for automotive radar and telecommunications, halogen-free materials for mobile devices, and materials allowing very fast data rates for high-speed digital applications. While our major growth focus continues to be Asia, we are seeing excellent opportunities in Europe for advanced automotive applications and in North America for high-speed digital applications.
Where are your major investments going for R&D?
Our major investments in R&D have been in North America, where our main facility is located. Over the last several years, we have dedicated a substantial portion of our investments to develop materials for RF and microwave applications.
Additionally, we are developing new manufacturing processes that can be transferred to our global manufacturing facilities. We are also investing in the development of new raw materials, including the synthesis of proprietary resin systems and low-Dk glass fabrics. Our investment thesis is all about leading and being the “base for innovation” in our market.