16

IEE

ES

PE

CT

RU

M•

Febr

uar

y 20

03N

ICH

OL

AS

EV

EL

EIG

H

Leaking Capacitors Muck up MotherboardsFinger-pointing and fury as manufacturers try to dodge blame

N EWS A N A LYS I S

FAULTS & FAILURES •It has all the elements of agood thriller: a stolen secretformula, bungled corporateespionage, untraceable goods,and lone wolves saving the lit-tle guy from the misdeeds ofmultinational corporations. In this case, a mistake in thestolen formulation of the elec-trolyte in a capacitor haswrecked hundreds of PCs andmay wreck still more in whatis an industrywide problem.

Aluminum electrolyticcapacitors with a low equiva-lent series resistance (ESR)are high-capacitance compo-nents that generally serve tosmooth out the power supplyto chips. Throughout 2002,they have been breaking open and failing in certain desktop PCs. Motherboardand PC makers contacted by IEEE Spectrum have stopped using the faulty parts, but because the parts can fail overa period of several months,more such failures are expected.

So far, the only motherboard maker toadmit to the problem is ABIT ComputerCorp. (Taipei), and the only major PC makerto acknowledge being affected is IBM Corp.But the problem is likely to be more wide-spread. Indeed, those who have repairedthe damaged boards say that they haveencountered crippled motherboards fromMicro-Star International, ASUSTek Com-puter, Gigabyte Technology, and others.

For Gary Headlee, who repairs elec-tronics in Midvale, Utah, the trouble sur-

faced at the end of 2001, when users ofPCs with ABIT motherboards began tocomplain of leaking capacitors. Headlee’ssolution was to replace all the low-ESRaluminum electrolytic capacitors of1000 microfarads or over. By last sum-mer he was receiving as many as 10 bro-ken boards through the mail every day,and he estimates he has fixed 1200 boardsso far. At about the same time, CareyHolzman, who builds and sells customPCs, noticed the identical problem innon-ABIT computers he had sold and

others he was asked to repair [see photosabove and on next page]. In 12 years of PCrepair, “I’ve never seen anything like it,”says Holzman, owner of Computer Per-formance Specialists (Glendale, Ariz.).

It is clear now that a faulty electrolyte isto blame for the burst capacitors. The mys-tery is: where did it come from and whichmanufacturers used it? Citing Japanesesources, initial reports claimed that majorTaiwanese capacitor firms, including theisland’s market leaders, Lelon ElectronicsCorp. and Luxon Electronics Corp., had

Busted caps: capacitors oozing a brownish crud as on this motherboard,

provided by custom computer builder Carey Holzman, have led to

the failure of hundreds of PCs. A faulty electrolyte formula is to blame.

17

IEE

ES

PE

CT

RU

M•

February 2003

turned out faulty products. But both com-panies have denied the accusations.

Most of the leaking capacitors pulledfrom bad boards in the United States,according to repair people, were labeledTayeh, not a brand affiliated withknown capacitor makers. Many otherswere unmarked.

Some, however, did bear the trade-marks of Taiwanese passive componentsfirms such as Jackcon Capacitor Elec-tronics Co. (Taipei). Jackcon claims that ithas been out of the motherboard marketfor two years but received some com-plaints from U.S. consumers in 2002.John Ko, its managing director, blamesthe motherboard design and remainsconfident in the quality of Jackcon prod-ucts. According to Ko, the company’s low-ESR capacitors passed quality tests at theIndustrial Technology Research Institute(Hsinchu, Taiwan), a nonprofit R&Dorganization partly funded by the Min-istry of Economic Affairs (Taipei), whichis also often the source of Taiwanesefirms’ electrolyte formulas.

What happened?

The origins of the mother-board malaise seem a les-son in how not to commitcorporate espionage. A well-placed source in Taiwan,who did not wish to be iden-tified, largely confirmed forSpectrum accounts published in the Unit-ed States that were based on sources inthe Japanese electronics industry. Accord-ing to the source, a scientist stole the for-mula for an electrolyte from his employ-er in Japan and began using it himself atthe Chinese branch of a Taiwanese elec-trolyte manufacturer. He or his col-leagues then sold the formula to an elec-trolyte maker in Taiwan, which beganproducing it for Taiwanese and possiblyother capacitor firms. Unfortunately, theformula as sold was incomplete.

“It didn’t have the right additives,” saysDennis Zogbi, publisher of Passive Com-ponent Industry magazine (Cary, N.C.),which broke the story last fall. Accordingto Zogbi’s sources, the capacitors madefrom the formula become unstable whencharged, generating hydrogen gas, burst-ing, and letting the electrolyte leak ontothe circuit board. Zogbi cites tests by

Japanese manufacturers that indicate thecapacitor’s lifetimes are half or less of the4000 hours of continuous ripple currentthey are rated for.

Electronics makers are ordinarilyvery careful about capacitor quality. “Thelarge volumes of passive content in anyelectronic device means that you havethat many more chances for a product tofail,” says Zogbi, who also runs The Pau-manok Group (Cary, N.C.), a marketanalysis firm focused on the passivecomponents industry. Electronics firmsgenerally supply their manufacturerswith a list of parts and materials theycan use from suppliers whose qualitythey trust. Zogbi suspects that, in aneffort to cut costs, contract manufactur-ers used dodgy component sources thatwere not on the approved list.

Major Taiwanese capacitor makershave vigorously denied having made anybad components, but the crisis has had achilling effect on the island’s whole indus-try, which produces 30 percent of theworld’s aluminum electrolytic capacitors.

“Many buyers refused to maintaintheir relationship with Taiwanese firms,”says Francis Tsai, spokesman for LuxonElectronics (Taipei), the second-largest alu-minum electrolytic capacitor maker in Tai-wan. ABIT, which is arguably the hardesthit, now is going to Japan for its capacitors.

The effect on Lien Yan (Taichung, Tai-wan), the company accused of buying thestolen formula and selling the faulty elec-trolyte, has been just as devastating. Thefirm has vehemently denied the accusa-tions, but it has lost 30 percent of its orderssince the problems came to light, says C.H.Lee, a manager at Lien Yan. The companynormally produces more than 60 tons ofelectrolyte monthly for customers in Tai-wan, China, and Japan. Currently, Lee says,orders are only from small local firms.

Lien Yan and Taiwanese capacitor mak-ers claim they are the victims of a smearcampaign by Japanese competitors whoC

AR

EY

HO

LZ

MA

N

are saying that all Taiwanese capacitor mak-ers are tainted. The price ratio of Japaneseproducts to Taiwanese was about four toone, according to Lee, and Japanese firmsmay be trying to win back lost market share.

Lien Yan’s Lee says that Japanese cus-tomers who stopped buying from hiscompany even showed the firm internaldocuments written in Japanese that statethat any relationship with Lien Yan wouldlead to boycotts on the part of the Japan-ese firm’s customers. (The notices oftenmisspelled Lien Yan as “Lein Yan” or“Lenyan.”) “After checking all names of[capacitor] companies accused by Japan-ese companies, we discovered that almostall had never purchased our products,”Lien Yan said in a statement.

Soldering in silence

While Taiwanese passives makers are try-ing to shore up relations with their cus-tomers, some of the computer firms affect-ed are doing the same. ABIT says it willreplace or fix defective boards its customerssend it. IBM says it alerted those customers

it believes are most likely to be affected andis handling repairs under warranty.

Other manufacturers have been lesshelpful. As Gary Headlee’s capacitor re-placement side business grew, he beganreceiving damaged boards built by othercompanies besides ABIT. But when heposted the list of other boards on his Website, he received letters from lawyers rep-resenting two manufacturers, promptinghim to pull the posting.

Carey Holzman, as a builder of customPCs, has been trying to raise awarenessabout the defects since last spring. Hethinks manufacturers should be more pub-lic about the problem and issue a recall.“Main board replacement is a big job. It’s ahuge amount of downtime for the user,” hesays. Failures can also occur after the war-ranty has expired, he points out. “The man-ufacturers should do the right thing.”—Yu-Tzu Chiu (Taipei) & Samuel K. Moore

Exploding capacitors blow the lid off a case of intellectual propertytheft in the electronics industry