Breaking the Bottleneck | Issue 35
[12/18/2023] DFM for Optical Devices, Toyota's Future of Production, Real-Time Payments in Manufacturing, & Optimus v2
Breaking the Bottleneck is a weekly manufacturing technology newsletter with perspectives, interviews, news, funding announcements, and a startup database. For a discrete and continuous manufacturing market map click the link here!
Content I Enjoyed This Week 🏭🗞️🔬
News:
Closing the DFM Gap for Optical Devices [MIT News]
Researchers from MIT and the Chinese University of Hong Kong have developed a machine learning-based digital simulator for photolithography, a process used to fabricate computer chips and optical devices. The simulator incorporates data gathered from photolithography with a digital simulator that emulates the performance of the fabricated device in downstream tasks to provide more accurate modeling of how the system would fabricate a design. This approach, called neural lithography, uses a neural network trained on real experimental data to compensate for specific deviations in the photolithography system. The technique aims to bridge the design-to-manufacturing gap and improve the accuracy and efficiency of optical device fabrication for applications such as mobile cameras, medical imaging, and telecommunications.
Clean Energy Factories, Get Boost From New Tax Credits [Canary Media]
The U.S. clean energy manufacturing sector is set for significant advancement following the release of tax credit rules by the Internal Revenue Service (IRS). The tax credits, extending through 2030 and gradually diminishing by 2033, outline specific credits for solar power manufacturing, wind power equipment, and domestic battery cells. The solar power manufacturing credits cover each step of the process, from polysilicon production to module assembly, with additional credits for related components such as backsheets, trackers, and inverters. Likewise, wind power equipment, including vessels for offshore wind installations, is subject to specific credits. Domestic battery cells are eligible for credits of $35 per kilowatt-hour, with an additional $10 per kilowatt-hour for battery modules. One of the most transformative aspects of the new rules is the extension of credits to "modules with no battery cells," a provision crafted to include flow batteries and thermal batteries. Flow batteries, a key player in the long-duration energy storage sector, could experience accelerated growth with the support of these credits.
Toyota Outlines Future Production Processes [Assembly]
Toyota is adapting its production strategy to embrace electric vehicles (EVs) by implementing various advanced technologies, including giga-cast modules, self-propelled assembly lines, and digital twin technology. In its recent workshop titled "Changing the Future of Carmaking," it outlined its approach to more human-centered manufacturing and greater integration of Industry 4.0 technology. The company's next-generation EVs will be built upon a new modular structure, dividing car bodies into three sections: front, center, and rear. This modular structure is designed to improve production efficiency, simplify designs and operations, and enhance flexibility. Toyota is also incorporating giga-casting technology, enabling the production of integrated cast parts with reduced cost and weight. The self-propelled assembly line, utilizing vehicle control and sensor technologies from autonomous driving development, eliminates conveyors and allows for more flexible factory layouts. Additionally, Toyota is leveraging digital twin technology to design two-way production processes, aiming to improve productivity and efficiency. The company seeks to transform the way employees work by incorporating 3D drawings and involving workers from later stages of production in the design process, reducing lead times and eliminating reworking.
Inside DXL’s Pivot to Central America [Supply Chain Dive]
Six years ago, DXL sourced over a third of its products from China, facing risks related to supply chain disruptions. In response, DXL diversified its sourcing to Southeast Asia and later moved towards the Western Hemisphere, particularly Central America. Currently, China's share of DXL's production is in single digits, and the company is exploring sourcing programs in the Dominican Republic and Guatemala. The move to Central America offers advantages such as shorter lead times and faster speed-to-market. However, there are challenges, including higher labor costs, the limited supply of fabrics, and the need for capital investments in fabric production. Adding further complexity is the "yarn-forward" standard in the Central America-Dominican Republic Free Trade Agreement, which requires garments to be made with fabrics produced in the U.S. or CAFTA-DR countries. It is yet to be determined if the prioritization of agility and quality will be worth dealing with the above challenges.
Inside Foxconn’s Struggle to Make iPhones in India [Rest of World]
Foxconn began making iPhones in Sunguvarchatram in 2019, and in September 2023, the Sunguvarchatram-produced iPhone 15s became the first made-in-India flagship iPhones available on launch day. However the article discusses the challenges faced by Foxconn in its iPhone manufacturing plant in Sunguvarchatram. These include difficulties in replicating the high efficiency of its Chinese manufacturing model, higher material costs, a greater percentage of defective phones, and the need to adapt to the Indian workforce's unfamiliarity with the intensity and intricacies of 21st-century electronics manufacturing. To improve production the company has dipatched more Chinese workers to the plant however even with this strategy the company has encountered challenges related to cultural differences, language barriers, and the need to navigate local labor laws and regulations, such as the debate over increasing workdays from eight to 12 hours.
Research:
Manufacturing Companies Embrace Real-Time Payments [PYMNTS]
The report focuses on the growing interest and adoption of real-time payments within the manufacturing sector. Based on a survey of 125 decision-makers from manufacturing firms in the United States, the study reveals that 96% of manufacturers expect real-time payments to replace traditional checks for making payments, and 87% anticipate the same for receiving payments. Additionally, the study suggests a decline in the importance of traditional payment methods such as automated clearing house (ACH) payments and debit cards. About 81% of firms expect real-time payments to replace standard ACH payments for making payments, and 84% predict the same for receiving payments. Similarly, 77% of respondents foresee real-time options replacing debit cards for making payments, while 86% anticipate the same for receiving payments. Finally, the study highlights that half of the manufacturing companies surveyed expect real-time payments to displace cash, and 32% foresee the method replacing credit cards for making payments. This suggests that, while real-time payments will revolutionize the industry, traditional payment methods will still play a role in financial transactions.
State of the Manufacturing + Distribution Vol 2 [Sikich]
A report from technology firm Sikich indicates a drop in optimism among manufacturing and distribution executives, with the average score falling from 6.88 to 6.76 out of 10 between March and August. Interest rates were cited as the biggest factor contributing to this decline, followed by poor economic conditions, labor costs, and increased labor shortages. Despite challenges, 92% of manufacturers successfully implemented at least one technology project in the last three years. Executives believe marketing and customer service would benefit most from artificial intelligence, with 19% already implementing AI in their daily operations. Finally, on cybersecurity, executives rated their efforts a seven out of 10 on average, but 34% experienced an information security breach in the last five years.
Podcasts:
The Capabilities of Volumetric Additive Manufacturing [TCT Additive Insight]
US Chip Industry Win Hinges on Lucrative Tax Credit [Talking Tax]
Manufacturing Deals
Allspice - An company building a hardware collaboration platform with Git-based revision control, a central hub for cross-team collaboration, workflow automation, and design analytics
$6 million [Venture] - From Root Ventures, Flybridge Capital Partners, Benchstrength, Bowery Capital and angels
Verve Motion - An company building a robotic “exosuit” designed to help workers complete physically demanding tasks in factories
$20 million [Series B] - From Cybernetix Ventures, Construct Capital, Pillar VC, and OUP
Actility - An company building low-power industrial IoT connectivity solutions
€16 million [Venture] - From Bpifrance, BNP Paribas, Bosch, Cisco, and Swisscom
Tacto - A company building AI-based software to streamline procurement workflows, ensure compliance, and enable efficient material sourcing
€50 million [Venture] - Led by Sequoia Capital and Index Ventures and joined by Visionaries Club, Cherry Ventures, and UVC Partners
Weekly Planned Downtime
Optimus Gen 2