Four Pi Could See Success With Electronic Eyes

Automated inspection devices were heralded in the early 1980s as the technology that would catapult modern factories into the future by allowing manufacturers to use machines in place of the human eye to inspect everything from auto parts to french fries.

The new generation of inspection equipment would be intelligent enough to find flaws in products as they rolled off assembly lines. They would “see” things that human eyes would miss and would never tire of the repetition of their task, proponents said. Eventually, the machines would cost a lot less than human labor.

Expecting to strike it rich, dozens of companies, including a handful of San Diego firms, entered the marketplace touting a variety of so-called “robotic vision” techniques.

The problem, however, was that most of the inspection systems that came to market were extremely costly, operated at a snail’s pace and could only see the surface of objects. By the mid 1980s, the entire industry was stigmatized by the failures of several automated inspection companies, some of which were backed by such giants as General Motors.

Four Pi Systems in San Diego is yet another automated inspection company trying its hand in what historically has proved to be a very difficult industry. The company’s managers bristle under comparisons with its precursors, insisting its technology and marketing plan will allow them to succeed where others have failed.

“Of course we don’t like being billed as an automated inspection company,” acknowledged Four Pi Systems Senior Vice President Bruce Baker. “But a few things set us apart from other companies, the most important being our new exciting technology.”

Unlike other automated inspection companies that have tried to tackle a number of manufacturing problems, Four Pi Systems has devoted its resources to the inspection of a single segment of the electronics industry: the solder joints that connect integrated circuits to circuit boards.

A lead-based alloy that was used by ancient Egyptians to connect handles to tin cups, solder is still the best way of fusing together metal parts and has evolved with the times to occupy a significant role in modern technology.

But poorly applied solder can lead to a variety of problems for circuit board manufacturers, accounting for half of all defects. As circuit boards have become smaller and more complex, those solder joints, which can number more than 100,000 on a single board, have become increasingly difficult to see.

Four Pi Systems’ solution to this manufacturing problem is its 3DX Series 2000 machine that uses an X-ray technique called scanned-beam laminography to check the integrity of microscopic solder joints, even those that are covered by layers of circuitry and other components.

Although Four Pi Systems is not the only company on the market using X-ray technology--IRT Corp. in San Diego is a direct competitor--it is the only one whose machine can get clear three-dimensional images of individual solder joints, industry observers say.

In an X-ray process that resembles CAT scans, the 3-D technology employs a rotating beam which excludes unwanted clutter from the image, allowing the machine’s electronic eye to see cross sections of hidden solder joints.

Perched on a 3,500-pound block of granite, the 6-by-7-foot machine has five computers which together can inspect a 12-by-15-inch circuit board with 2,000 solder joints in about two minutes. The machine can catch 98% of all solder defects, a significant improvement over competing products, Four Pi Systems officials say.

“It has a lot of potential,” said Mike Nevares, manager of Texas Instruments’ micro-electronic packaging systems department, which acquired a Four Pi Systems machine in January. “Not only can it be used in surface-mount solder joints, but also in next-generation flip-chip packaging. But the ultimate use of this machine is going to be statistical process control.”

Statistical process control is a production method whereby manufacturers determine the ideal temperature, pressure and other conditions to manufacture their products and then just periodically test their process to make sure everything is working correctly. The method is generally considered a cost-effective alternative to inspecting every unit that rolls over an assembly line.

Technology analyst Carolyn Rogers with San Francisco-based Hambrecht & Quist investment banking firm praised Four Pi’s product as “revolutionary” but was cautious in her appraisal of the product’s market prospects.

“I don’t think everybody is going to rush out and buy one of these first thing, and I don’t think (manufacturers) have to have one to be competitive,” Rogers said. “We’ll have to wait and see how the market develops and if the product can really generate some performance.

“There isn’t a market, there’s a lot of market potential,” Rogers added. “It’s going to be a very missionary market for them. They have to go in and sell it to the natives.”

Since last May, Four Pi Systems has delivered six machines to customers including Hewlett-Packard and Boeing and has a backlog of 11 sales. Three of the six machines, which sell for an average $450,000 each, operate as “beta sites.” Although beta site machines were sold at full cost, the distinction represents an agreement that the customers will put up with potential bugs in the new technology and that the company will do whatever it can to work out any problems.

Currently, automated inspection companies competing for printed circuit board business employ a variety of techniques including X-ray and ultrasound. By most estimates, this market will top $200 million by 1992.

Such figures are meaningless, however, unless automated inspection companies like Four Pi Systems can persuade manufacturers who have mostly relied on human inspectors that an automated system will work and is cost-effective.

Automated inspection devices “have never achieved acceptance as something you have to have when you put in a production line,” said Lawrence Goshorn, former president of Carlsbad-based International Robomation/Intelligence, a defunct vision inspection company that finally closed shop in December.

“Everyone has high hopes (that their manufacturing processes are) going to be perfect,” said Goshorn, who now heads IRI Vision, another Four Pi Systems competitor, “so inspection is . . . the same as (admitting) failure.” Thus, sales depend on strong management advocacy of the technology’s value, he said.

Four Pi Systems was founded in 1986 by Robert Corey and Bruce Baker, both former executives of IRT Corp. in San Diego. Corey, who headed IRT Corp.’s automated X-ray inspection division for more than six years, said he decided to leave because he became frustrated with some of the company’s strategic decisions.

Baker, who was Corey’s product development manager, immediately followed him and proposed the two men start their own business.

“We knew we made a good team but we didn’t know yet what we wanted to do,” Corey recalled. “We talked about all kinds of things. We looked into Burger Kings. We even considered becoming the Laundromat kings of San Diego because it has lots of cash flow.”

A week later, Corey was struck with the idea of taking visual slices out of hidden solder joints, a technique he believed would solve the tricky problem of inspecting surface-mounted circuit boards, an increasingly popular format. Baker later came up with the idea of using scanned-beam laminography to do it.

They named the company Four Pi after four pi steradian, a unit of measure used in physics to denote three-dimensional space.

In March, 1987, after several months of living off their savings and donations from friends and relatives, Corey and Baker garnered $3.6 million in venture capital from a syndicate of investors including Paragon Partners in San Jose and Weiss, Peck & Greer in Palo Alto.

The company, all told, has raised about $10 million in venture capital and now employs some 80 people. Revenue for the fiscal year ending this month will come in at $5 million, and could reach $10 million next year, Baker said. He expects the company to become profitable by the end of this year.

A patent infringement lawsuit filed in July 1989 by IRT was settled last September after Four Pi Systems agreed to pay IRT $900,000.

The company passed a milestone in June, 1989, when it struck a unique deal with Japanese distributor Kanematsu Electronics Ltd., a subsidiary of trading company giant Kanematsu, in which the Japanese company paid Four Pi Systems $2 million for the exclusive right to market the X-ray device in Japan.

“Right from the start, we knew we needed to be an international company to dominate this market,” Baker said. “Otherwise we’d be opening ourselves up to a giant Japanese company copying our technology . . . and competing with us on our home turf.”

To avoid that, Four Pi Systems has adopted an aggressive patent strategy in both the U.S. and Japan, in which they have been filing for patent protection on seemingly minor, peripheral technology.

Alexander Cilento, vice president of 3i Ventures in Newport Beach, which has invested $1.25 million in Four Pi Systems and which holds 12% of its shares, said such foresight is what attracted him to the company in the first place.

“There’s a huge number of people who assemble electronics,” Cilento said. “As the price of the machine gets to lower levels, the number of customers who could economically justify using Four Pi’s machine gets larger. We hope to build Four Pi into a $100 million company in four years, and we believe the price (per machine) has to be well below the $250,000 to be at those levels.”

Whether Four Pi Systems will be able to cut the price of its machine in half, however, remains to be seen.