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EPTE Newsletter from Japan - Japanese PWB Production in 2006

Topics of the Week

Japanese PWB Production in 2006

Japan's Ministry of Economy, Trade, and Industry (METI) released December's production data for Japanese printed circuit board manufacturers' last week.  The release of these figures now completes the production data report for 2006, and industry trends can be reviewed and analyzed.

PWB industry revenue for December came in weaker than expected at 83.934 billion yens, a 4.5% decline from November, and the beginning of a two month loosing streak that began in November. This decline normally does not begin prior to December due in part from the Christmas buying season. This is still a 13.0% increase compared to the same month of 2005, and Japanese electronics companies probably recognized on shelf inventories were grater than consumer demand.  The Japanese government has stated the market is continuously expanding; however, manufacturers are not as confident, and employ a more practical and conservative approach to maintain financial stability.

Business for both rigid board and flexible circuit manufacturers are trending downward since November, and most other related product segments are feeling the pinch. The Module substrate segment is an exception to the downturn, and has enjoyed a consistent increase in revenues since last summer. However, the growth rate has slowed down for the past two months, December shipments were almost the same as November.

2006 Gross revenues from Japanese PWB manufacturers were 962.261 billion yens, a 15.5% growth from the previous year. However, 2006 volume was 24.94 million square meters, which was 0.0% growth from 2005.  Although revenues increased and production decreased, unit prices for circuit boards did not increase.  Instead, manufacturers have shifted production to higher-end product lines where margins are higher.  During 2006, rigid single sided boards continuously declined and posted a 15% compared to 2005.    6-8 layer rigid boards grew 22.7%; single-side flexible circuits declined 7.7% from the previous year; double side and multi-layer products increased revenue by 7.3% compared to the previous year.

Unfortunately for the module substrates manufacturers, they are not very flexible in change the product lines to those with higher margins. The rigid substrate manufacturers increased annual shipments by 57% from the previous year, but revenues for other substrates declined 3.2% from 2005. Business for module substrates depends on the customers' situations, while substrate manufacturers have completely different applications.  Rigid substrates customers include semiconductor manufacturers and packaging companies.  Conversely, the main markets for other module substrates are mostly driver modules for flat panel displays such as LCD panels.

The Japanese PWB industry posted strong gains during 2006, enjoying double digit growth compared to the previous year. However, the growth was realized during the first three quarters, and the last quarter of 2006 has steadily decreased. This trend could be a clear indicator that 2007 may not be too promising for the PWB manufacturers in Japan.  Hopefully, it will only last for the first or second quarter. Management teams for related companies must pay attention to market trends and act quickly and decisively to maintain profits in a constantly changing industry.

Dominique Numakura, DKN Research (dnumakura@dknresearch.com)

Headlines of the week

1.      LG Philips LCD (Major display manufacturer in Korea) 2/12

Will increase the manufacturing capacity of the large size LCD panels to 110,000 units per month from 90,000 units for 42" and 47" TV by the third quarter of 2007.

2.      Toshiba (Major electronics company in Japan) 2/12

Plans to roll out 52" size LCD TV in 2007. LCD panels for the large size flat TV are supplied by LG Philips LCD in Korea.

3.      Hitachi (Major electronics company in Japan) 2/13

Has developed the world smallest IC chip (50 micron square, 5 micron thick) for IC tag applications. The device can memorize 128 bits information.

4.      Fuji Electric (Major electric and electronics company in Japan) 2/13

Has been developing the application technologies for the bendable solar cells. The devices were built on a thin plastic film using amorphous silicon.

5.      Rohm (Major component supplier in Japan) 2/14

Will start the volume production of the ultra small size LED devices (1.0 x 0.6 mm) from April with a volume of 10 million units per month.

6.      Sharp (Major electronics company in Japan) 2/14

Will increase the manufacturing capacity of blue color laser diode 200% to half million units per month for the next generation DVD.

7.      Toray (Major chemical company in Japan) 2/14

Has developed a new photo-sensitive polyimide resin with a lower curing temperature than 200 degree C for the protection of semiconductor devices.

8.      Showa Denko (Major chemical company in Japan) 2/15

Will commercialize the organic EL panel products. The company will introduce a pilot manufacturing line with 300 x 300 mm work size in Chiba Plant.

9.      Hosokawa Micron (Equipment manufacturer in Japan) 2/16

Has commercialized a new volume production machine to generate nano-particles by vapor phase synthesis process.

10.  Mitsubishi Electric (Major electric and electronics company in Japan) 2/16

Has developed a new deep UV laser (wave length: 213 nano meters) with 10W power for the process of printed circuits and glass substrates.

11.  Fuji Chimera (Market research firm in Japan) 2/15

Has released a new market research report regarding to MEMS device market with relating nano materials.

Interesting literatures about the packaging industry

Articles of DKN Research

1. New "2006 Global Material Projection for Flex Circuit" DKN Research, October, 2006. http://www.dknresearch.com/Products.html

2. "Introduction for the Printed Circuit Boards of Car Electronics, Flexible Circuits", (Japanese only), Dominique Numakura, Nikkan Kogyo Shinbun, June, 2006, 2400 yens.

3. New "The latest semiconductor package, Part XXI, Teardown Analysis of FDD, CD Drive", Dominique Numakura, Electronics Packaging Technology, January, 2007 

4. "Five Year Projection of the Global Flexible Circuit Market" Robert Turunen, Dominique Numakura and James J. Hickman, The Board Authority, Volume 7, August, 2006

5. "Technical Trends and Market Projection of the Materials for the Flexible Circuits", (Japanese only) Dominique Numakura, Denshi Zairyo, October, 2006

6. "Leading Edge Material and Application of Polyimide (Materials for the Advance Flexible Circuits)", Dominique Numakura, CMC publication, August, 2006

7. New "Business Trends and Technology Trends of the HDI Flexible Circuits -

Roadmap for the Ultra High-Density Advanced Flexible Circuits", Dominique Numakura, KPCA, October 31, 2006

From the Major Industry Magazines

1. "Innovative Solutions for Leading Edge Designs", George Milad and Mario Orduz, CircuiTree, January, 2007.

2. "2007: The Year of HDI?", Mike Buetow, Circuits Assembly, January, 2007.

3. "Acoustic Imaging of Embedded ICs", Tom Adams, SMT, January, 2007

4. "Microminiaturization, Motorola Style", Aroon Tungare, Printed Circuit Design & Manufacturing, January, 2007.

5. "Fluxless Wafer Bumping by Electron Attachment", Christine Dong, Richard Patrick, Eugene Kawacki and Gregory Arslanian,  Advanced Packaging, January/February, 2007

6. "From Chips to Systems via Packaging - A Comparison of IBM's Mainframe Servers", Hubert Harrer, George A. Katopis and Wiren Becker, IEEE Circuits and Systems Magazine, 4th Quarter, 2006

7. "Under the Hood-Latest DESIGN GEMS Unearthed",  presented by EE Times and techonline, December 2006