Santa Rosa company brings back manufacturing jobs
Published: Sunday, November 25, 2012 at 4:15 a.m.
Last Modified: Sunday, November 25, 2012 at 8:39 a.m.
The miniature assembly lines sit behind glass doors, where tiny bobbins are quickly wound with 2 meters of barely visible wire, and little sparks weld the copper ends in place.
Every day the new production facility in Santa Rosa can produce 90,000 magnetic sensors, each less than a quarter inch in length.
Such assemblage used to be done largely by hand in Asia, but the work returned to the United States last summer as the Santa Rosa company geared up production to supply key components in a new gaming system: the Nintendo Wii U.
The Wii U, released last week, utilizes the magnetic sensor and motion tracking technology of Santa Rosa's PNI Sensor Corp.
“No one's expecting us to be in this product,” said Becky Oh, PNI's president and CEO.
The motion sensor industry is dominated by companies that make even smaller devices for smartphones, Oh said. But PNI impressed Nintendo by demonstrating the superior accuracy of its system.
“They needed the performance,” Oh said. “They were really adamant about the performance. ... They wanted it to work everywhere and anywhere.”
While many U.S. companies have outsourced manufacturing overseas to cut costs, PNI decided to bring production back home. And while touting better quality control and more involvement between designers and producers, company officials said making sensors in Sonoma County also saves money.
Oh said that, in 2004, a sensor for a radar detector cost 50 cents in the U.S. but only 12 cents in China. Now, while declining to give the exact numbers, she said it cost less to build the devices in Santa Rosa.
PNI has 34 employees and has grown by 50 percent since last year to support the Nintendo initiative. The company had $8.9 million in revenue last year. Oh predicted that sales will climb 50 percent by the end of 2013.
PNI was founded in 1987 by a group of Stanford University students. The company moved to Santa Rosa in 1998.
Its first product was a digital compass for cars. Over the years the company has produced a radar detector/compass and a breathalizer, as well as a compass built into a Timex watch.
But in 2005, Oh said, the company's leaders decided to focus more on its core technology of magnetic sensors and motion tracking.
The sensors also are used in robotics, laser range finders and weather buoys. About 95 percent of today's car compasses use the company's technology, Oh said.
Dick Herman, president of 101 MFG, an alliance of manufacturing executives in Northern California, said PNI demonstrates the cost effectiveness of U.S.-based manufacturing when skilled workers use state-of-the-art production tools.
“It's a big success story,” Herman said.
Nintendo's original Wii had a motion sensing system that was “fairly imprecise” but still ushered in a whole new way of gaming, said Ari Greengart, research director for consumer devices at Current Analysis research group in Sterling, Va. It attracted a new group of casual players who took part in games like Wii tennis, golf and bowling.
“Motion gaming was a dramatic departure from what we had in the past,” Greengart said. “This actually got you off the couch.”
While increased motion accuracy will be appreciated by today's gamers, the Wii U is drawing attention for a different feature that Greengart characterized as “another conceptual leap in game playing.”
The new system offers “asymmetrical gaming,” where different players play the same game differently. An example from childhood is the game of tag, where one person is “it” and all the other players try to avoid getting tagged.
The new game system is selling out quickly in stores this holiday season, but Greengart said it's still too early to know how eagerly game makers and players will respond to the new Wii device.
For the new game system, PNI produces a tiny wafer-like module that provides what the industry calls “sensor fusion.”
It involves not only the geomagnetic sensor, but also a tiny gyroscope and an accelerometer, the latter two devices provided by Swiss companies. Accelerometers are sensors that detect sudden movement or tilting. One of its uses is to protect hard drives on falling laptops.
The multiple data points from the three sensors are “fused” using PNI's proprietary algorithm to provide accurate motion tracking. A company video shows a remote controller closely tracking the movement of a laser pointer across a TV screen.
PNI's staff was able to give such a demonstration to Nintendo officials and to let them use the controller.
“They tried to break it,” Oh recalled. But in the end they told her “this actually works.”
The motion tracking has a precision that would be useful in games that include shooting, but game makers targeting the Wii U may find other ways to take advantage of the technology, PNI officials said.
“We're going to start seeing the games that really benefit from it,” said Tom Byron, the company's marketing director.
PNI has three custom-built machines to assemble magnetic sensors in its facility in Santa Rosa, as well as three more in Fremont.
The Japanese-built machines each cost nearly $1 million and were purchased with a Small Business Administration loan. Next year the three Fremont units are slated to be moved to Santa Rosa.
The machines stand nearly 7 feet tall, 16 feet long and 5 feet wide. They run 24 hours a day, seven days a week with two shifts of workers each day.
For new workers, “the rite of passage” involves learning to correctly thread the copper wires — each one thinner than a human hair, said David Hanson, the company's manufacturing manager.
Some workers need an hour to get the practice down. But when breakage occurs in normal operations, the staff must be able to thread a new length of wire through the machine in less than a minute.
“They've got to be good at it,” Hanson said.
When the work was done mostly in China and South Korea, Oh recalled visiting a production facility where women wound the sensor wires by hand.
“It was almost like being in a sewing factory,” she recalled.
After the Lunar New Year, the factory often needed to bring in new workers to fill openings from those who didn't return after the holiday. PNI felt compelled to give extra attention to the quality of the sensors produced at that time, Oh said.
And when Oh inquired about significantly expanding production, the answer came back that such an increase would require building another factory to house all the extra workers needed.
Setting up the state-of-the-art assembly facility in Santa Rosa not only makes it much easier to increase the scale of production. It also allows the engineers who design products to be much closer to the manufacturing process.
The designers then can better learn how to make improvements to the current product versions and to future designs.
“It really sparks a lot of ideas,” Oh said.
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