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EPTE Newsletter from Japan - 2007 Printed Circuit Production in Japan

The Japanese Ministry of Economy, Trading and Industry (METI) released the PWB production data for December 2007.  The release of this data now provides us a production snapshot for 2007, and we can predict market trends for 2008.

Total revenue posted for 2007 from the Japanese printed circuit industry was 999 billion yen (9.5 billion US dollars), representing a 3.8% increase from the previous year.  Included in this revenue stream is overseas production from Japanese circuit board manufacturers. The statistical data provided from the METI may include only 70% of the industry, therefore actual revenue could top 1.3 billion measured in U.S. dollars. The industry enjoyed double digit growth rates for the first half of 2007 compared to the same months in 2006; however, demand softened during second half of the year. Total production volume during 2007 stood at 25.24 million square meters, a 1.2% increase compared to the previous year.  Production numbers were weak during the first three quarters of the year, posting negatively comparing year over year; however, a strong rebound during the fourth quarter helped push production totals into the positive column.  This growth can be attributed to the average unit price dropping significantly during the year.  I believe Japanese PWB manufacturers focused on those orders with higher margins during the first half of the year to sustain profitability; however, price reductions were necessary during the second half to keep those manufacturing lines humming once things slowed down. This seemed to be a general market trend within the Japanese PWB industry during 2007.  My observations from individual product segments did deviate from this norm.Total 2007 revenue from the rigid circuit boards segment came in at 619.9 billion yens, a 1.9% increase from the previous year, while total volume declined 0.7%. The main product for this segment included multi-layer boards.  This line enjoyed double digit growth during the first half; however, things slowed down in the second half. The build-up boards also performed well during the second half of the year, growing at a double digit rate; however, things are a little shaky.  A serious concern for most segments is the incredible decline during the latter part of the year.  This is a trend shared by the entire industry.

Total revenue for flexible circuits grew to 141 billion yens, a 2.7% increase from the previous year (0.7% volume growth).  Results from the single side circuits and double & multi-layer circuits were remarkably different. The single side flexible circuits continue to decline year over year, and 2007 showed no changes. Double side and multi-layer circuits grew during the year, posting double digit growths in the last quarter.  A common industry trend from flexible circuit categories is the continuous price declines throughout the year. This is a first for the Japanese flexible circuits industry since they have never experienced such a long term of price reductions.

Total revenue from module circuits increased to 236.3 billion yens, a 9.9% growth from the previous year, and a 13.4% growth in volume. There were several differences between rigid module circuits and other module circuits. The rigid module circuits, mostly used as the substrates for IC packages, experienced a volatile year in 2007.  Month to month shipments were sporadic; it was either feast or famine.  However, the 2007 growth for this category equaled 18.7%, but the last two months of the year declined significantly. Other module circuits, mostly the substrates for driver modules in FPD panels continuously declined throughout the year, and posted a 3.1% decrease.  A common theme shared throughout the industry was declining prices.

Unfortunately, I did not uncover any positive trends from the Japanese PWB industry in 2007. A major concern was the remarkable declines that each major product segment felt during December. The management teams from all of the Japanese PWB manufacturers are wondering if this signals the beginning of an extended slow period due from the (dare I say) recession in North America. Japanese PWB manufacturers do not export their products directly to North America, but their customers are mostly Japanese consumer electronics companies who do export to North America.  A domino effect could be felt months ahead.......

Dominique K. Numakura

DKN Research, www.dknresearch.com

Headlines of the week

(Please contact haverhill@dknreseach.com for further information of the news.)

1.      Mitsumi (Major electronic component supplier in Japan) 2/23

Has demonstrated the new wireless power supply system at its private show. It supplied 2.5W during the show.

2.      Sharp (Major electronics company in Japan) 2/23

Has agreed to supply LCD panels to Sony as the second major supplier after the JV with Samsung Electronics in Korea.

3.      Konika Minolta Opto (Optical device supplier in Japan) 2/25

Has completed the construction of the new plant in Malaysia for the production of glass substrates of hard disc drives. The company invested 7 billion yens.

4.      JSR (Major electronics material supplier in Japan) 2/26

Will invest 6 billion yens to strengthen the manufacturing capabilities and engineering capabilities of JSR Micro Taiwan for the local customers of LCD color filter materials.

5.      Nikko Metal (Major non-iron metal supplier in Japan) 2/26

Has started the operation of the new plant in China for the production and supply of the surface treatment chemicals including plating solution for the electronic components.

6.      Ibiden (The largest circuit board manufacturer in Japan) 2/26

Has started the energy reduction project for all kinds products. Ibiden plans to reduce the energy consumptions 50% by 2010 compared to 2007.

7.      Yokowo (Electronic part supplier in Japan) 2/26

Has developed the new low height two piece connector system for the power supply cables of the cellular phones. Component mounting height: 2.5 mm.

8.      Sumitomo Chemical (Major chemical company in Japan) 2/27

Plans to double the FPD material business in Taiwan to 100 billion yens by 2012.

9.      Fujitsu (Major electronics company in Japan) 2/27

Will commercialize the new 2.5" disc drive with a 500 GB capacity in May 2008. The new drive introduces the perpendicular memory system.

10.  Asahi Kasei (Major chemical company in Japan) 2/28

Will build the second manufacturing plant in Miyazaki for the separator sheets of lithium ion batteries by 2010. The total capacity will be 150 million sq. meters per year.

11.  Kyoritsu Denki (Test equipment supplier Japan) 2/28

Has started the operation of the new plant in India for the manufacturing of fixtures of PWB testers.

12.  Hitachi Chemical (Major electronics material supplier in Japan) 2/29

Has developed a new heat resistant resin for the reflection frame of the LED devices.  The new resin has a 60,000 hour life under 130 degree C.

13.  Sony (Major electronics company in Japan) 2/29

Has developed a new basic technology of the disc drives. The new technology enlarge the memory capacity 5 times larger compared to current technology.

Interesting literature about the packaging industry

Articles of DKN Research

1. New "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. New "Total Process Solution for the High-Density Multi-layer Flexible Printable Electronic Circuits", (Japanese only) Dominique Numakura, Denshi Zairyo, October, 2007

3.New "The latest electronics package, Part XXXI, Cellular Phones", Dominique Numakura, Electronics Packaging Technology, October, 2007 

4. New "Coombs' Printed Circuits Handbook, 6th Edition, Part 15-Flexible Circuits", Dominique Numakura, McGraw Hill, New York, September, 2007

5. New "DKN Research Develops Film Base Connector", Circuits Assembly, September, 2007.

6. "Flexible Circuit Materials", (Japanese only) Dominique Numakura, Denshi Zairyo, April, 2007

7. "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. "WASTE NOT, WANT NOT WITH LEAN SIX SIGMA", SAMUEL PONCE, CircuiTree, February, 2008.

2. "Embedded Active Components for High-Reliability Products", Jim D. Raby, Circuits Assembly, January,  2008.

3. "Inside Reflow", Gail Flower, SMT, January, 2008

4. "OPTOELECTRONICS Comes of Age", Bruce L. Booth and Jack Fisher, Printed Circuit FAB, February, 2008.

5. "The Thermal CPB -An Approach to Thermal and Power Management-", Paul A. Magrill, Advanced Packaging, January/February, 2008

7. "Under the Hood, Efficiency vs. Speed", presented by EE Times and Techonline, October 8, 2007