Shot down?

North America has made a hearty meal out of U.S. defense budgets over the past several years, but it wasn't always this way.

Back in the old days--the 1990s--manufacturers bolted from the military supplier ranks. Working as a DoD subcontractor was too onerous, too paperwork-laden, and, in the wake of utterly remarkable demand for telecom equipment, not profitable. In the wake of the recession, industry eyes turned back to the one market guaranteed not to go to Asia. Solid returns and the promise of future contracts led to a surge in interest not seen since the late 1980s. Building for the military metamorphosized from wallflower to belle of the ball. Companies hustled to obtain military certifications--and the contracts that followed. The current administration and Congress were eager enablers, funding staggering Defense budgets for everything from next-generation warfare systems to replacements for gear and munitions spent in Iraq and Afghanistan. Flush with new programs, military suppliers have enjoyed three straight years of double-digit growth.

The U.S. funds more than half--$522 billion--of global defense spending. National defense contracts are typically closed to foreign suppliers, making the U.S. a lucrative and virtually protected market for U.S. companies. But defense spending tends to be administration-dependent, and the tide may be turning. As reported on circuitsassembly.com in March, analyst Ed Henderson predicts military electronics growth will slow to 2.3% next year, down from 9.5% this year. This is a sharp drop from the 11.4% to 13.3% growth rates from 2004 to 2006.

In its latest proposal, the U.S. Defense Department asked Congress for more than $28.1 billion in funding for fiscal 2008. The monies would support electronics procurement and research for what is known in Washington parlance as CET & I, or communications, electronics, telecom and intelligence technologies. While $28 billion is a lot of government cheese, it's also a 4% drop from fiscal 2007, and many observers cite as reasons a changed climate in Washington, plus other fiscal priorities both chronic (retirement and medical programs) and acute (Hurricane Katrina aid).

And although the drop is not forecast for another year, in some quarters it's already being felt. As Joe O'Neil, president of Hunter Technology, told me in late March, "There's been a dramatic slowdown in contract flow, although not so much for proposals."

Curiously, even as new programs are slowing, the DoD appears more open than ever to new technologies. Says O'Neil, "They are going bonkers on technology. It's no longer, 'If it's not plated through-hole, we don't trust it.'" Kelly Flanders of EMS firm dataCon agrees, saying he sees the military becoming more receptive to commercial parts. "They're testing more COTS. They're forced to look at other technologies in order to get the costs down." But while Flanders and others say they haven't come across requests for lead-free technologies for military applications, a task group made up of Defense primes is investigating just that. The ongoing Joint Council on Aging Aircraft/Joint Group on Pollution Prevention (JCAA/JGPP) project aims to ensure effective repairs can be made to military aircraft assemblies regardless of the solder alloy used. So far, they've learned that solder joint reliability is "very different" for different parts, and that early life failures "may be dominated by special causes of variation" during initial runs. Given that most high-rel military products are built in modest volumes, the latter finding is somewhat worrisome.

The Lead-Free Electronics in Aerospace Project (appropriately nicknamed "LEAP"), a working group of all the major aerospace stakeholders, is going a step further, developing a group of standards that responds to the lead-free electronics wave. Keynoting at the Military Technologies Conference in March, Raytheon engineering fellow and LEAP team member Dr. Anthony Rafanelli asserted that industry needs to "rethink our definition of solder alloy: Does it need to take into consideration the surface finishes ...? Should we be thinking of [an] interconnection system?"

LEAP is asking the right questions and moving at the right pace. Warfighters aren't landfilled. Likewise, a missile, by definition, is bad for the environment; hence, there should be no rush to produce a lead-free version. That the technology works should be paramount, regardless of the DoD's push for lower costs.

Recall that the EMS industry has longstanding ties to military contracts. SCI, generally recognized as being a pioneer of outsourced assembly services, has its roots in building for the DoD. In the prime of the recovery, the trick now is to avoid getting shot down.

The following are clarifications to Phil Zarrow's March column:

* XRF analyzers that use the lower-energy region of the x-ray spectrum can quantify a greater range of elements, at lower detection limits, and serve multiple purposes, including tin-whisker screening and counterfeit product identification.

* Signal-to-noise ratios are worse in K-shell x-rays than in L-shell

for lead and mercury, and as such a "K-shell only" device may encounter difficulty proving something is not present, which is crucial for reliable RoHS screening.

* Certain XRF analyzers provide quantitative elemental composition at ppm levels.

* Using the lower-energy portion of the x-ray spectrum, it is possible not only to isolate individual small components, but also to set a thickness algorithm permitting greater accuracy on polymers as thin as 0.1 mm.

CIRCUITS ASSEMBLY regrets the confusion.

Mike Buetow, Editor-in-Chief

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