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Why There is a Global Programmable Device Shortage

Why There is a Global Programmable Device Shortage

Part III

Why There is a Global Programmable Device Shortage

Top Reasons for Global Chip Shortages– Whose Fault is it Really?

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Overview

Causes for the Programmable Device Shortage

  • There’s never been a greater disruption for Automotive Manufacturers, except for the two World Wars
  • Covid-19 restrictions are the major cause of global supply chain shortages, especially for programmable chips
  • Other factors include:

• Just in time inventory management
• Redundancy gap for critical parts
• Increased demand from consumer electronics verticles, such as laptops and gaming systems
• Because programmable devices require value-added services, which include programming, it can take longer for finished components

There’s never been anything close to the disruption to the Automotive industry (World Wars excluded), but there have been regional shortages in the recent past. A tsunami off the coast of Japan flooded Renesas Electronics in March of 2011– the same tsunami that caused the nuclear power plant in Fukushima to fail. While the world was focused on Fukushima, the auto industry in Japan was focused on Renesas, a major programmable device supplier of everything from transmissions to touchscreen information systems. The big three Japanese automakers, Toyota, Nissan, and Honda, were forced to slow or stop output for several weeks.

Fast forward to March of 2020– just nine years later, the entire planet was shutting down over the coronavirus pandemic (see article) which disrupted the delicate global supply chain, causing a programmable device shortage. Semiconductor manufacturers were caught in the crosshairs of canceled orders and business restrictions. Automakers closed factories as demand plummeted. Consumers were on lock-down for weeks, and in some cases, months.

By late summer, demand for trucks and SUVs surged, in large part due to pent-up demand, but also as people shifted away from mass transit for health reasons. However, demand was even higher for laptops and advanced gaming systems for the newly work-from-home employees and others cooped up looking for something fun (and safe) to do.

Who’s to Blame

If you want to pick the number one cause, COVID-19 wins in a landslide. When the new coronavirus started to spread, there was no way to know how bad it was going to be, so governments and businesses took a very conservative approach; many areas experimented with lockdowns and social distancing in an attempt to stop the spread. As scientists and doctors began to understand the disease better, we began to develop ways to deal with this “new reality.” But the disruption was devastating in every way imaginable: many people lost their jobs, many businesses closed, and those that didn’t have to figure out how to keep going under serious constraints.

COVID-19 is a new disease, caused by a novel (or new) coronavirus that has not previously been seen in humans. Because it is a new virus, scientists are learning more each day. Although most people who have COVID-19 have mild symptoms, COVID-19 can also cause severe illness and even death. Some groups, including older adults and people who have certain underlying medical conditions, are at increased risk of severe illness. On February 11, 2020 the World Health Organization announced an official name for the disease that is causing the 2019 novel coronavirus outbreak, first identified in Wuhan China. The new name of this disease is coronavirus disease 2019, abbreviated as COVID-19. In COVID-19, “CO” stands for corona, “VI” for virus, and ”D” for disease. (from CDC.gov)

When everything “closed” in March/April 2020, many automakers canceled orders for parts and components that automotive OEMs provide; this caused a cascade of cancellations that eventually made it back to the semiconductor manufacturers. While orders for automotive chips were cool, the demand for laptops, game consoles, and other consumer electronics became white-hot. Semiconductor manufacturers shifted production to high-demand inventory, and in many cases were at capacity.

Just-in-Time

Just-in-time inventory management is also a major cause of the worldwide dilemma. Automobiles are a low-margin business, so shaving costs with lean manufacturing makes sense. However, when demand rebounded and inventory of programmed devices fell behind, they were quick to point fingers at their vendors who supply finished components for their lines. The chipmakers and vendors blame the automotive industry for canceling orders, keeping their inventory low, and not preparing in advance for when things rebound, contributing to the programmable chip shortage.

Redundancy Gap

Lack of redundancy is another culprit. For instance, 56% of global chip manufacturing revenue originate from one company: Taiwan Semiconductor Manufacturing Co. (TSMC). TSMC supplies the suppliers. Similarly, new and intricate microcontrollers often have their own issues– complex chip designs are often from a sole source, and it takes years to qualify a second supplier. (Source: Bloomberg)

Squeaky Wheel

As large as the global automotive industry is, they are relatively small in comparison to consumer electronics megacorporations, such as Apple, Sony, and Samsung. Consumer electronics typically are a higher margin than automotive devices, and the electronics giants are willing to pay a little more to ensure on-time delivery.

Cost of Capacity

Semiconductor manufacturers are running at capacity to try to meet demand. Similarly, many have plans to expand fabrication capacity in 2021, but won’t impact supply for years, at a cost of billions. (See Semiconductor Factory list)

Value-add Adds Time

Finished components, such as transmissions, engines, entertainment systems, etc. are usually built by contract manufacturers, such as Continental and Bosch. A shortage of chips causes a cascade of issues. Unlike a simple transistor, before many microprocessors can be soldered to the board, they go through programming and testing. Depending on the complexity of the data and/or the volume, programming times can be quite long.

Automated programming systems use advanced robotics to pick, place, program, test, and finally load to trays or tape. If additional processes are needed, such as laser marking for lot and piece numbers, or 3D inspection for bent pins, this can add to the time required. Once programming is completed, the chip can be soldered to the board (which usually will undergo further testing). In conclusion, finished boards can be added to the final assembly, tested, packaged, and shipped to the end-customer. (Read more on offline in-house programming)

Who’s to blame?

Ultimately, it doesn’t really matter. Hopefully, lessons can be learned, and adjustments can be made. Eventually, automakers may be faced with the dilemma of whether to continue playing “chicken” with vendors as their finished product inventories dwindle. One thing for sure: the complexity and reliance on programmed devices will only keep growing, especially as Electric Vehicles (EV) and Autonomous Driving Systems become more prevalent.

Intrigued?

Learn more about BPM Microsystem’s Automated Programming Systems Deliver ROI

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Business Insider

The global chip shortage is hurting businesses and could be a national security issue

The semiconductor industry is facing serious supply issues as global demand spikes. The modern world relies on semiconductors for everything from working at home to military applicationsSee More

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Bloomberg

Carmakers Face $61 Billion Sales Hit From Pandemic Chip Shortage

When buyers came back, the auto industry didn’t have enough semiconductors. Chip foundries were busy supplying gadget makers… See More

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Motortrend

Ford Cuts F-150 Production Due to Semiconductor Chip Shortage

Ford is not alone in suffering from a chip shortage that is crippling the auto industry… See More

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Bloomberg

Chip Shortages Force More Cuts at North American Auto Plants

Companies eliminate shifts, temporarily close factories; Semiconductor shortage shows no sign of slowing down in 2021See More

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Auto Evolution

Carmakers Hit Hard by Chip Shortage And Suspending Production Is the Only Option

The chip shortage hitting the automotive industry doesn’t seem to come to an end, and more carmakers are now impacted, with a temporary halt of the production at certain facilities becoming the only solution some can turn to… See More

Programmable Device Shortage Spreads to Consumer Electronics

Programmable Device Shortage Spreads to Consumer Electronics

Part II

Programmable Device Shortage Spreads to Consumer Electronics

No shutdowns reported in consumer electronics plants; Chip Shortage Demand driving up prices and lead-times

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Overview

  • Shortages are causing ripple effects in other electronics products, such as NextGen Gaming Systems, Laptop Computers, Cloud Computing, Artificial Intelligence systems, and Smart Phones.
  • There have been no reports of plants or lines shutting down because of the chip shortage.
  • Many Semi houses are investing in capital equipment in an attempt to meet the demand
  • Complicating the supply chain issue, programmable devices can’t be used without value-added services: programming, inspection, soldering, and test
  • In a break from “just-in-time” inventory, executives are contemplating higher-than-normal stock, as chips don’t take up much space compared to other components
  • Chinese New Year celebrations could cause some short-term logistical headaches starting this week

Programmable device shortages are causing many automakers to reduce forecasts, or in some cases, to close plants. For instance, shortages are causing ripple effects in other electronics industries, such as NextGen Gaming Systems, Laptop Computers, Cloud Computing, Artificial Intelligence systems, and Smart Phones. The good news is that, as of now, there have been no reports of plants or lines shutting down because of the chip shortage.

Circuit boards traveling down the SMT line at BPM Microsystems manufacturing facility in Houston Texas.

Semiconductor shortages are expected to last for the foreseeable future; many Semi houses are investing in capital equipment in an attempt to meet the demand. TSMC in Taiwan plans to increase CapX by 54% in 2021, with additional plans for new factories in the US (source). 

Supply Chain Issues

Rising demand is causing price pressure on raw materials used in semiconductor manufacturing. In addition, there are only a handful of advanced foundries capable of producing advanced chips required for video processing, advanced gaming systems, computing, and 5G phones.

For instance, programmable devices can’t be used without value-added services: programming, inspection, soldering, and test. Therefore, without uploading the code to the device for a specific application, a chip is just a small, fairly expensive, and not very useful paperweight.

See “Six Ways to Program Devices” article here 

Auto Production Update

Automotive and industrial equipment manufacturers will continue to experience programmable device shortages at least through mid-2021. Microchip, NXP Semiconductors, and Silicon Labs are among suppliers that have raised prices, in addition to warning of shortages throughout this year.

As of the first week in February, General Motors is the latest automaker to report they’re “trimming output” in four factories (source). Thus far, Volkswagen has been among the hardest hit; VW is considering purchasing critical chips directly from manufacturers for the first time (source). In a break from “just-in-time” inventory, executives are contemplating higher-than-normal stock, as chips don’t take up much space compared to other components.

See article “Programmable Device Shortage causes Auto Makers to Cut Output, Idle Plants”

Other Headaches

Chinese New Year celebrations could cause some short-term logistical headaches starting this week. All offices and factories close for about 3 weeks, allowing workers time to travel home and back. Therefore, if you were counting on ordering/receiving inventory from warehouses in China next week, you’ll have to wait.

For more information on Chinese New Year and some tips on planning ahead, please visit https://www.ewmfg.com/chinese-new-year/

Jon Bondurant is the Chief Operating Officer of BPM Microsystems. He says, “We keep a minimum of six months inventory of critical  electronic components of our programmers and accessories.” In addition, when quantities fall below thresholds, they show up on weekly reports. In conclusion, this helps to ensure that BPM won’t get caught up in supply chain issues, or has some time to find an alternative source.

Intrigued?

Learn more about BPM Microsystem’s Automated Programming Systems Deliver ROI

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Wall Street Journal

Chip Shortage Hits General Motors, Leads to Production Cuts

Detroit automaker plans to trim output at four factories amid limited semiconductor supplies. See More

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US Tech

A Shortage We Can’t Afford: Mission-Critical Rad-Hard (Radiation-Hardened) FPGA Components

What if a sudden global shortage of a critical electronic component were to occur, one that could cripple the entire defense and aerospace industry? See More

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Automotive News Europe

VW looks at direct buying to secure scarce chips, report says

Volkswagen AG, the largest automaker in the world, which warned as early as Dec. 4 about the problem, currently sources chips via major suppliers and has no direct contractual or supply agreements with semiconductor makers. See More

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Investor's Business Daily

Chip Shortages Hinder Automobile, PC, Consumer Electronics Production

Semiconductor shortages are hindering the production of everything from personal computers and consumer electronics to automobiles. And some shortages are likely to linger throughout 2021, which is mixed news for semiconductor stocks. See More

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Seeking Alpha

Auto chip shortage could continue until third quarter – IHS Markit

The global automotive chip shortage could impact 672,000 light vehicle production units in Q1, according to new IHS Markit data. See More

Programmable Device Shortage causes Auto Makers to Cut Output, Idle Plants

Programmable Device Shortage causes Auto Makers to Cut Output, Idle Plants

Part I

Programmable Device Shortage causes Auto Makers to Cut Output, Idle Plants

Canceled orders and lack of a backup plan leads to $61 Billion in losses so far in global programmable device shortage

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Overview

  • Affecting Ford, Fiat Chrysler, Honda, Volkswagen AG, Toyota, Nissan
  • Supply chain disruptions started with canceled orders for chips when automakers closed plants due to Covid
  • Over 100 different chips used in an average car, helping to control everything from infotainment systems to anti-lock brakes
  • Semiconductor manufacturers shifted inventories to consumer products in high demand during the automotive lull, such as gaming systems and laptop computers
  • 280,000 fewer vehicles produced than forecast and may balloon to over 500K (AutoForecast)
  • Other verticals are beginning to be affected: Smart Phones, Laptops

It’s being called “Chipageddon” as Automotive Plants around the world deal with programmable device shortages due to Covid-related shutdowns in the spring of 2020. Now automakers around the world are idling lines as they scramble for critical components to meet the market demand.

  • San Antonio, Texas Toyota plant is only able to produce 60% of demand for the full-sized Tundra Pickup
  • Louisville, Kentucky Ford plant is idle for a week and has laid off almost 4,000 workers
  • Volkswagen AG is cutting production in the first quarter of 2021 in China, Europe, and North America
  • Fiat Chrysler is idling its Jeep plant in Toluca, Mexico, and its sedan plant in Brampton, Ontario (Canada) in an effort to shift production to higher selling models
  • It takes 6 to 9 months of lead time for the industry to get devices because of complex logistics and just-in-time inventory management

Pent-up demand for automobiles ramped up in the late 3rd Quarter of 2020, and automakers and OEMs were caught off-guard when they were told: “wait.” For instance, when they canceled their chip orders, Semi-houses shifted their production to consumer chips in the covid-driven stay-home new reality: new gaming systems from Microsoft and Sony and a huge uptick in laptop orders from stay-at-home employees and students.

Growth of Programmable Devices in Automobiles

On average, a modern car has over 100 chips on-board, and a programmable device shortage of any of the components will cause the production line to grind to a halt. In addition, most manufacturers utilize “just-in-time” inventory to save cost and space, but saving pennies has cost billions: $61 Billion so far.

However, for devices that require programming, this can result in an even greater bottleneck. Infotainment systems, with massive data demands, require up to 20 minutes to program a single device. Electric vehicles (EV) are the fastest-growing segment; while only constituting 3% of global sales, the onboard chips are about three times more valuable than gasoline cars.

Add to the complexity the fact that most of those chips require additional programming for their specific applications. Some lower density devices can be programmed in-circuit; high-density memory devices are usually programmed (either at a programming house or in-house) on an off-line Automated Programming System.  (See “What is the Best Way to Get Devices Programmed” Article)

Logistical Nightmare

With the complexity of the supply chain and the additional demand for consumer chips, automakers may face up to nine months lead time. Above all, in many cases, slower-selling vehicles can’t get parts, as pickups and SUVs take priority.

The global semiconductor market is paced to be valued at over $129 Billion in just 4 years, nearly triple 2019 (read more). Driving growth are infotainment systems, smart dashboards, self-driving technology, and green vehicles (many battery efficiencies have been led by programmable devices). See Automotive Programming

Automotive programmable device makers include STMicroelectronics, Nvidia, TSMC, Infineon Technologies, NXP Semiconductor, Texas Instruments, and Toshiba

China Hard-Hit

China has been especially hard hit by the chip shortage; it has the largest automotive market in the world but imports the vast majority of chips used to manufacture automobiles.

The components in a car require a more robust architecture than your smartphone: high temperatures, g-forces, etc. Therefore, autos have much longer lifespans than consumer-grade electronics, so the devices need to be durable and reliable and may take up to five years to design and develop.

As of publication, the worldwide shortage has not yet affected non-automotive chip inventories; while semiconductor manufacturers shift production to automotive customers, this may cause other inventories to shrink while they make up for demand.

In Conclusion

  • Just-in-time inventories need to be balanced against the prospect of line-down due to a lack of components. Manufacturers should inventory a minimum of six months of back-up devices to mitigate shutdowns
  • Canceled orders for chips have caused semiconductor manufacturers to shift to more profitable and/or more stable inventories
  • Chip shortages are causing strains on OEMs and programming houses to keep up with the demand for programmable devices
  • Manufacturers of other products should take heed now, or they may get caught in a logistical nightmare too
  • To ensure the most bullet-proof inventories for manufacturing lines, contact BPM about in-house solutions for programmable devices 
    • Output can pace with the production line by adding shifts and/or adding machines in combination with strategic outsourcing
    • In-house off-line programming provides unmatched efficiencies, producing a lower cost per device, and drastically lowering lead-times
    • Source Code can be updated daily, allowing the line to have the latest revision
    • Keeping your source code in-house makes your intellectual investment more secure from theft

Intrigued?

Learn more about BPM Microsystem’s Automated Programming Systems Deliver ROI

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NBC News

Automakers idle more plants as chip shortage worsens; Samsung warns of spread to cellphone Production

Automakers idle more plants as chip shortage worsens; Samsung warns of spread to cellphone production.  See More

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Chicago Tribune/Associated Press

Global semiconductor shortage forcing automakers to cut production

A widening global shortage of semiconductors for auto parts is forcing major auto companies to halt or slow vehicle production just as they were recovering from pandemic-related factory shutdowns. See More

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Fitch Ratings

Semiconductor Shortage Delays Global Automotive Sector Recovery

The situation is particularly acute for automotive companies, which are experiencing a strong increase in electric vehicle demand, while chip-makers …   See More

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Times of India

Carmakers face $61 billion sales hit from pandemic chip shortage

Production at the swamped facilities ground to a halt—a major hit for Renesas, of course, but also a devastating blow to the Japanese car industry, which … See More

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Autoblog

Ford trims Explorer, Lincoln Aviator output due to ongoing chip shortage

Poor chip availability has plagued automakers since late fall due to increased demand and reduced supply of silicon across multiple industries… See More

Legacy Automated Programmers from BPM Microsystems

Legacy Automated Programmers from BPM Microsystems

Legacy Automated Programmers from BPM Microsystems

Hundreds Still Running

Several hundred of our legacy Automated Programming Systems (defined as machines we no longer offer for sale) are still in operation; many 15 years and older. There may be some compelling reasons to upgrade (such as capacity issues, or slower programming times for newer devices), but if it ain’t broke, why fix it? Many of these older machines have been paid off for years (other than spare parts and consumables), so as long as they are still productive, an older system is a pure profit center.

BPM still supports many systems (there are some exceptions, so please check the End of Life page). You can continue to get parts and support with a current hardware and/or software contract.

 

Upgrade

To find out more about upgrading your existing 3800MK2 or 3900 to make it faster and have greater, more accurate throughput, let us know!

Available Upgrades

APS legacy models 3800MK2 and 3900 use upward vision camera technology for component alignment. These APS can be upgraded to get new hardware and software for on-the-fly vision alignment and higher performance with a CyberOptics on-the-fly alignment camera and other improvements with the Z and Theta Axis.

Compelling Reasons to Upgrade

Performance: The 3800MK2 to 3810 upgrade combined with other hardware improvements will allow 800 DPH (3800MK2) to an impressive 1200 DPH. This is accomplished because of the sophisticated CyberOptic LNC-120 for on-the-fly vision alignment and improved pick and place movement using hardware/software advancements.

The 3900 to 3910 upgrade improves Devices Per Hour from 1100 DPH (3900) to an impressive 1432 DPH for the 3910.

Component Automeasure, supported with the CyberOptics alignment camera allows customers to set up jobs more quickly. WhisperTeach allows for faster job setups and changeovers.

CSP devices are supported. The LNC-120 is a sophisticated alignment camera capable of accurately and repeatedly aligning the smallest programmable devices presently on the market as of September 2019.

This is not simply a “camera change.” Upgrade include a new e-chain, improved hardware and performance improvements for the Z-Axis, plus faster, more accurate, and faster Theta performance (rotation alignment).

Legacy Machines Still In Operation

  APS Model Operating Machines by Generation
3000FS
3610 6th Gen

6th Gen launched in 2000 (20 years)
4610
3710-3710MK2

7th Gen

7th Gen launched in 2007 (13 years)

4710
3800 8th Gen

8th Gen launched in 2011 (8+ years)
3800MK2
3800W7-32
4800
4800W7-32

 

Windows 10

We’re pleased to announce that BPWin Windows 10 Compatible version went live with the launch of version 7.0.0. BPWin is currently compatible with Windows XP, Windows 7, and Windows 10, 64-Bit operating system; users can now take advantage of the newest Windows operating system with greater speed, security, and access to the latest OS updates (Microsoft announced it will cease support for legacy OS– see full info from Microsoft here).

Important: you’ll need a current Software Support Contract for all APS and 2XXX Manual Programmers. Contact Inside Sales for contract support.

If you’re interested in Windows 10 support on your current system, contact Technical Support for more information. You may need additional hardware to support Windows 10.

Upgrade

To find out more about upgrading your existing 3800MK2 or 3900 to make it faster and have greater, more accurate throughput, let us know!

Programming Devices— where no repairman has gone before

Programming Devices— where no repairman has gone before

How BPM’s device programmers master $100K antifuse FPGAs

The first few seconds are critical. There are a million things that have to go just right. If the rocket makes it to the second-stage burn, the engineers in mission control can begin to breathe again. For the payload specialists, the hard part is still hours, days, or even years to come. Where their satellite, probe, or manned mission is going, there are no service calls. Under the harshest conditions that are known to exist (extremes of heat/cold, g-forces, radiation, etc.) their payloads are expected to perform flawlessly well beyond what’s even realistic back on earth.

Whether it’s a sensor on an anti-lock brake assembly or a telemetry chip on a satellite, there are increasing numbers of programmed devices where failure isn’t an option; either it’s difficult or impossible to replace in the field, or failure means the potential loss of irreplaceable life and equipment (or both). When it comes to programming a mission-critical antifuse device, who is the only authorized vendor on which Microsemi relies? BPM Microsystems.

According to a Microsemi white paper, an antifuse-based FPGA is, “the most secure programmable device available.” Antifuse FPGAs are a one-time programmable non-volatile device that never uses a bitstream. Once programmed, it can’t be intercepted, copied, modified, or corrupted. They are also highly impervious to radiation (“Rad-Hard”). On the other hand, you’ve only got one shot to program the device, so it’s vital that it be programmed correctly.

Read More Here

Antifuse FPGAs have been around since the ‘90s, yet are still the most secure silicon devices available. From a practical perspective, antifuse devices are virtually impossible to reverse engineer. For instance, to determine the difference between programmed and unprogrammed fuses requires a scanning electron microscope, which when used, physically destroys the device in the process.

A single blank antifuse device can range in cost from a few thousand dollars to as much as $100,000! When a single device can cost as much as 50 times as much as the system that programs it, Microsemi has only licensed BPM to build their family of Silicon Sculptor programmers, now entering the 4th generation. The latest, the Silicon Sculptor 4 is built on the BPM 9th Generation site technology; 9th Gen programming sites are the most universal, most widely developed (35K+ devices and growing), fastest programming technology in the industry, and has been vetted by the most rigorous and demanding requirements in the business of programming. The underlying architecture was developed from the testing industry and is capable of generating the cleanest waveforms for the highest signal integrity, ensuring maximum trouble-free life in the field (even if that field is deep space).

When one chip costs more than some automated systems (such as BPM’s 3901 Automated Programming System that starts at just under $90K) and there is no “second chance,” it has to be perfect the first time. The Silicon Sculptor 4 continues the tradition of delivering consistent quality devices to places where repair trucks can’t go.

Hardly anyone has the same quality requirements as antifuse devices. It is comforting to know the same attention to clean waveforms that Microsemi relies on is available to everyone. Anyone can benefit from the design criteria that are built into BPM’s 9th Gen family of programmers.  Signal quality, power supply design, and system self-check ensure the highest level of quality for you.

3901 Virtual Demo

3901 Virtual Demo

3901 Virtual Demo

Live Webinar July 7, 2020

  • The 3901 APS – the affordable full-featured APS with Universal Programming Technology and On the fly vision alignment
  • Take a test drive with WhisperTeach which automates the Z-axis teach
  • We’ll talk about Scalability: Field Upgrade to 3928 (up to 7 sites, 1432 DPH)
  • Live 3901 Demo
    • Job changeover from TSOPs to BGA devices
    • Run a job
    • WhisperTeach Demo
  • Q&A

Your Hosts

Colin Harper

Colin Harper

Director of Sales and Product Management

BPM Microsystems
15000 Northwest Fwy,
Houston, TX 77040-3220
USA
Phone:  +1 713 351-5521
Cell: 1+ 832 358-1002

Colin has been at BPM for over 17 years. He’s been head of Engineering, Product Development, Sales and Marketing. Colin was instrumental in launching the 3901 and 3928 in 2019.

Scott Bronstad

Scott Bronstad

Marketing Guy

We want to help you be successful! Let us know how we can help
Office: +1 713-263-3776 x5464
Cell: +1 832-816-6579
email

Scott just celebrated (in May) 2 years at BPM. He has over 25 years of marketing experience, and has recently launched BPM’s Ecommerce store.