Wednesday, June 04, 2008 | Dominique K. Numakura - DKN Research
The Japanese Ministry of Economy, Trading and Industry (METI) recently released PWB production data for March. We now have a complete summary of first quarter production results, and the PWB market trends and 2008 production estimates follow.
Total revenue in March was 81.12 billion yen; a 2.5% increase from February, but 1.5% lower than January's numbers--we are hopeful that this is simply a seasonal adjustment. The revenue figure represents a 9.3% decline comparing revenue from March 2008 with the same month a year ago. Results from the previous months were on the plus side--small gains, but still positive--continuing the trend from 2007 where the industry grew by 3.8% compared to the previous year. Unfortunately, this quick turnaround to negative growth could signal a downward trend for the Japanese PWB industry. Adding the March results, the year to date cumulative total is minus -2.9%.
Shrinking margins is a concern for Japanese PWB manufacturers. The volume shipped during March did not decrease much compared to February, or from the same month last year. Manufacturers are shipping approximately the same volume, but are making less money, signaling a substantial drop in selling prices. The decrease in margins can be attributed to two things: 1) increases in the cost of raw materials, and 2) manufacturers reduced prices to maintain production rates.
Build-up type multi-layer boards are the only segment posting positive growth (+7.2%) compared to the same month last year. The segments posting negative growth include the double-sided rigid boards (-7.9%); four layer rigid boards (-10.2%); 6 to 8 layer rigid boards (-16.6%); single-side flex circuits (-22.6%); double-sided flex circuits (-11.7%); and rigid module circuits (-18.8%). Since volumes did not drop significantly for some of these categories--some even posted increased volume--this signals a drop in selling prices over the last few months.
Japan Electronics Packaging and Circuits Association (JPCA) did forecast a small but positive growth estimate for 2008; unfortunately, recent results cast a gloomy cloud over their sunny report. Reports from other market beacons also predict a rocky road ahead. Japanese cellular phone manufacturers, the major customers for Japanese rigid board and flex circuit manufacturers, predict sales growth will be negative for 2008. Shipment data for passive components during first quarter were sharply lower compared with the previous quarters, and the industry organization, JEITA, does not expect a quick recovery in the second quarter.
The first quarter data released from METI suggests the industry may not be able to realize a positive growth for the year unless a remarkable turnaround occurs during the second half of the year. A recent article from Densan Shimpoh, an industrial media in Japan, listed several PWB shops that closed during the last few months and, further, went on to say more bankruptcy filings are possible for this year.
Other countries in Asia are also feeling the pinch. The March PWB shipment from Taiwan improved greatly compared to February, but was not enough to overcome the significant decline in February. The flexible circuit segment in Taiwan was hit especially hard; volume continues its slide from last year, and expectations are shipments will continue to plunge. The Korean PWB market showed positive signs for the first quarter; however, the latest market data from April erased all optimism for a good year. Most Asian PWB manufacturers are in the same boat, and industry analysts blame the slowdown on the sub-prime issues in the U.S. The turning point for a recovery will begin when the U.S. economy stabilizes.
Dominique K. Numakura
DKN Research, http://www.dknresearch.com/.
Headlines of the Week
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1. Seiko Epson (Major electronics company in Japan) 5/22
The company has unveiled a new OLED product used in the instrument panel of automobiles. The product features a broad operation temperature range from -40 degrees C to +90 degrees C.
2. Daicel Chemical (Major specialty chemical supplier in Japan) 5/22
The supplier has completed construction to expand the manufacturing capacity of acetate films for booming LCD demands by 80%.
3. NEDO (R&D organization in Japan) 5/22
The company has developed a new optical lens through a special molding process. The new lens does not need anti-reflection coating.
4. LG Display (Major display device manufacturer in Korea) 5/23
The manufacturer has a new TFT-LCD panel made by a roll-to-roll process using gravure off-set printing.
5. Sony (Major electronics company in Japan) 5/23
The company has developed a new back light system for LCD displays used in mobile products. The new system is a combination of blue-color LED and diffusion film.
6. BASF (Major chemical company in Germany) 5/23
The company has opened a new R&D center in Yokkaichi, Japan for the development of fuel cell related products.
7. Dai Nippon Printing (Major printing company in Japan) 5/24
The printing company will invest 30 billion yen to build a new plant for color filters used at the new LCD plant of IPS Alpha Technology in Himeji-shi, Hyogo Prefecture.
8. Dai Nippon Screen (Major equipment supplier in Japan) 5/23
The supplier will cut management salaries 10 to 25% for the next five months due to poor results during the 2007 fiscal year.
9. NEC LCD (Major display manufacturer in Japan) 5/26
The manufacturer has developed non-rectangular shaped LCD display. A heart shape LCD panel was displayed at a recent exhibition as an example.
10. Samsung Electronics (Major electronics company in Korea) 5/27
The company has developed the largest capacity of 256 G bites for solid state drive (SSD) as the standard memory of notebook PCs.
11. JEITA (Industry organization in Japan) 5/27
The organization reports that April domestic shipments of LCD TVs showed a significant slow-down--showing only 1.1% growth from the same month of the previous year.
12. Samsung Electronics (Major electronics company in Korea) 5/26
The company will invest about one billion dollars to upgrade and expand current manufacturing facilities of memory devices.
13. Oki Electric (Major electronics company in Japan) 5/28
The company has decided to spin off its semiconductor business and sell it to Rohm, a major device manufacturer in Japan.
14. Mitsui Metal Smelting (Major copper foil supplier in Japan) 5/28
The supplier will invest 3.5 billion yen to enlarge its manufacturing capacity of thin copper foils (mostly 12-micron thick) in Malaysia and Taiwan.
15. Ube Industries (Major chemical company in Japan) 5/28
The company has transferred its adhesiveless flexible laminates business to Ube Nitto Kasei, a subsidiary of the Ube Industries.
16. Ibiden (Major PWB manufacturer in Japan) 5/28
The manufacturer will invest 41 billion yen during the 2008 fiscal year for various improvements and advancements, with a main goal to build a new plant for build-up circuits.
17. Idemitsu (Major petroleum product supplier in Japan) 5/29
The company has entered the LCD panel relating market and will invest 2 billion yen for manufacturing facilities of optical products such as light guide sheets.
Interesting Literature Concerning the Packaging Industry
Articles from DKN Research
1. "Screen Printing for High-Density Flexible Electronics," Robert Turunen, Masafumi Nakayama and Dominique Numakura, Printed Circuit FAB, October, 2007, http://pcdandm.com/cms/content/view/3846/95/.
2. "Total Process Solution for the High-Density Multi-layer Flexible Printable Electronic Circuits," (Japanese only) Dominique Numakura, Denshi Zairyo, October, 2007.
3. New "Roll to Roll Production of Flexible Circuits, Possibilities and Issues," Dominique Numakura, Joho Kiko, Tokyo, March, 2008 (Japanese only).
4. "Coombs' Printed Circuits Handbook, 6th Edition, Part 15-Flexible Circuits," Dominique Numakura, McGraw Hill, New York, September, 2007.
5. New "Screen Printing Process for High Density Flexible Electronics," Robert Turunen, Dominique Numakura, Masafumi Nakayama and Hisayuki Kawasaki, IPC Printed Circuit Expo/APEX and the Designers Summit, April, 2008.
6. New "Global Flexible Circuit Industry, Market Trends and Technology Trends by Applications," Dominique Numakura, International Symposium of KPCA Show, April, 2008 (English PowerPoint file is available).
From the Major Industry Magazines
1. "Using Statistical Tools in Electronics Manufacturing," Rob Emery and Craig Hamilton, CircuiTree, May, 2008.
2. "Evaluating Manufacturability and Operational Costs for New Conformal Coating Processes," Jason Keeping, Circuits Assembly, May, 2008.
3. "Working with Large, Thick PCBs," Jennifer Nguyen, Robert Thalhamer, et al, SMT, April, 2008.
4. "Don't Let Your Signals, STUB THEIR TOES," Eric Bogatin, Printed Circuit Design & FAB, May, 2008.
5. "DRIE for MEMS devices," Michel Puech, Jean-Marc Thevenoud, et al, Advanced Packaging, April, 2008.
7. "Process requirements for high density SMD placement," Sjef van Gastel, Global SMT & Packaging, March, 2008.
8. "Microflex Circuit Applications for Medical Devices," Luke Volpe, MD & DI Magazine, January, 2008.