Sanmina-SCI Corporation, one of the world’s premier electronics contract manufacturers (EMS), serves the fastest growing segments of the global EMS market. With a dedicated focus on high end technology, the company provides end-to-end manufacturing solutions to large original equipment manufacturers (OEMs), primarily in the automotive, communications, computing, defence and aerospace, industrial and semiconductor systems, medical systems, and multimedia markets. Its services include product design, engineering, testing, volume production of systems, components, and sub-assemblies, as well as logistics and repair services and support.
Naresh Nigam, chief technology officer, Sanmina-SCI, who has been with the company for more than seven years, has contributed to its growth with his technical expertise and experience in the field of design and technology. He spoke to Srabani Sen of Electronics Bazaar about the company’s commitment to India and its roadmap to success.
EB: According to Manufacturing Market Insider, Sanmina-SCI is the fifth largest EMS company in the world. How are you positioned in India?
We are one of the largest EMS companies in India and have achieved this position in quite a short span of time. A good portion of our current customers in India are non-Indian companies who are manufacturing for the Indian market. As we develop that base of customers, we have also been actively discussing manufacturing opportunities with local Indian companies. A trend that we are noticing is that large MNCs have started local engineering centres to develop products for the market in India. Most of these companies are looking for EMS companies with global presence who can help them produce products in India, and, at a later time, produce the same product in other developing countries such as Brazil.
EB: Which are the sectors that are creating demand for EMS companies?
Demand in India is growing in almost all sectors for EMS companies. We manufacture mission critical products and that is providing us high growth. In India, most of our products are targeted at the communications, high end computing, point of sale (POS) and medical devices markets, though we are increasing our presence in the semiconductor, industrial, defence, and automotive sectors as well. Even a few quarters ago, we did not expect that these sectors would create so much demand.
EB: What is Sanmina-SCI’s investment plan in India?
Sanmina-SCI is very committed to India and has made significant investments in India in the past. As new business grows we will continue to make investments to support that growth. Not only are we approached by domestic customers, we are attracting multinational customers across the globe who want the Indian facility to serve them, as many of them are looking for an alternative to China. We also see tremendous demand from tier 1 Indian companies who want a world class EMS company and its supply chain.
EB: Are there any plans to expand your facility in India?
Our India headquarters occupies over 100 acres of land in Oragadam (on the outskirts of Chennai), with a 22296.729 sq m (2,40,000 sq ft) building that has a manufacturing plant and office space. We already have 11 SMT lines and seven box build lines, besides data collection systems, pre-production and test development capabilities. Since the demand for our services is rising, we had to increase our capacity, which
“ Sanmina-SCI is very committed to India and has made significant investments in India in the past. As new business grows, we will continue to make investments to support that growth
is why we are coming up with a second building of over 9290.304 sq m (100,000 sq ft) in the same Oragadam campus. This building will increase our manufacturing capacity by approximately 50 per cent. The building is expected to be operational at the end of the year.
EB: Are you open to collaborations in India?
We are already collaborating with local companies, and are working with some multinational components companies operating locally. We are working with their supply chain partners to develop a complete ecosystem to be able to provide a total solution to customers in India.
EB: What is the formula behind your success in India?
Our success in India has been a direct result of our ability to meet our customers’ needs. Over the years, we have developed our own training and quality processes across our global locations, which are well proven. We have implemented the same processes in India. Our strength is that we deliver products on time and with the highest quality.
We offer our customers local capabilities such as engineering, R&D and new product introduction (NPI) services. In order to do that, you have to have the best people. We are proud of our extremely efficient management team in India.
Additionally, Sanmina-SCI’s fully integrated India Design Centre offers strategic benefits to OEMs that need end-to-end design and manufacturing capabilities, DFx requirements in early design phases, the ability to meet rigid environmental guidelines such as RoHS and a highly developed global supply chain.
EB: You have recently started the Design Centre in Chennai. How is it contributing to your EMS business?
India has a large number of design companies. Most of them focus on product design and don’t have manufacturing capabilities. Once a hardware design is complete, it must go through a transformation to include DFx by a manufacturing partner. This adds extra time and cost to hardware product development. Sanmina-SCI’s Design Centre provides significant advantages to OEM customers in this aspect. With a full service engineering operation for hardware and embedded software development, the Design Centre offers design to NPI to volume manufacturing services as one supplier.
In addition to new product design services, our India Design Centre offers end-to-end testing, cost reductions and sustaining engineering services. Locally, we have a dedicated component engineering team to address EOL and component obsolescence.
EB: How many jobs do you plan to generate from your manufacturing and Design Centre?
The Design Centre is just a year old and already has 100 employees. We plan to double the figure within a year. The manufacturing facility haover 1500 employees, and new hiring will happen as new business dictates the need for it.
EB: Are there any plans of your R&D wing entering into partnerships with any educational institution?
We are in the early stages of setting up formal partnerships with Indian educational institutes. During my visit, I met key people at the All India Institute of Medical Sciences (AIIMS), New Delhi and IIT Madras. Both these institutes are part of Stanford University’s Stanford-India Biodesign, a collaboration to catalyse the Indian medical technology industry. Researchers at these institutes are developing some practical products for healthcare, and they want to work with the manufacturers, so that the manufacturer can help them produce a product based on their concepts. Additionally, we are engaged with other local engineering colleges where we provide internships to students and conduct on-campus recruiting.
EB: How do your designs help in cost reduction?
There are three different models of engagement to reduce cost. First, the customer looks for cost reduction without any design change. In that case, we do improvements where form, fit or function do not change. Sometimes we evaluate the characteristics of lower cost components and use them. Second, we redesign a product where there is limited or no software impact. For example, if a product uses multiple field programmable gate arrays (FPGAs), we may redesign it combining a number of FPGAs into a newer and larger FPGA, which may use a smaller PCB. In the third model, we completely redesign a product. Recently, we redesigned a chemical analysis product similar in size to a large photocopier that used 11 different PCBAs and multiple older microprocessors. We reduced the number of PCBAs to seven and reduced the size of the product to that of a desktop. This provided a 40 per cent cost reduction. The customer has continued to use the same software, but the new design gave the customer a new product with a new life span of 3-4 years. In these engagement models, better manufacturability, fewer components and newer technologies help achieve lower costs.
EB: How does engineering impact costs?
India has a very mature software and chip design services industry. However, there are few companies when it comes to system level product designs, and they do not have manufacturing knowledge or the infrastructure. When a customer is looking for a product, and from the beginning considers high volume manufacturing, that’s where our value comes in. Unless a product is designed with DFx requirements, it will most likely result in a re-spin of the PCBA after NPI, costing money and extending the schedule. Most multinational and large companies want design for manufacturing (DFM), design for assembly (DFA), design for test (DFT), etc, to be implemented right from the concept phase. This is where Sanmina-SCI can do a lot of value addition and cost reduction. If the firms work with Sanmina-SCI from the concept stage, it can help to reduce the cost by implementing test, manufacturing and assembly rules in the design.
Currently, we are working with some medical customers, designing high end products. We are involved with them in the concept phase. At this stage, we run their design through our proprietary, test strategy simulation tool to predict the total cost of end-to-end tests, based on the production volume. This helps in deciding the level of test coverage for the best ROI.
EB: Talking about technology, what is Sanmina-SCI’s contribution in this field, globally?
Sanmina-SCI has more than 100 patents in PCBs, storage, servers, high speed optical technologies, memory modules as well as in process technologies. A number of our patents are licensed by our competitors to provide technologically advanced products. Technology is our forte and keeps us competitive. We use our patented technologies to provide benefits to our customers.
EB: How is India positioned when we talk about technology?
India is quite advanced in technology and can compete globally. Many of our memory products are designed and developed in India. India has high design capability, and as proof, I can say that many of our patented products have been developed in India. India will play an extremely important role in technology, in the coming years.
EB: Do you see any limitations for the growth of the EMS business in India?
In the current scenario, India has a limited component manufacturing base. Components are imported from countries such as China, Taiwan and Korea. This creates the biggest challenge for EMS companies in India. The component supply chain has to execute flawlessly to meet product deliveries. However, cost wise, India is very competitive due to the skilled labour and technical talent available here.
