Estimated reading time: 5 minutes

EPTE Newsletter from Japan - January PWB Production in Japan a Bit Shaky

The Japanese Ministry of Economy, Trading and Industry (METI) has released PWB production data from Japanese manufacturers for January 2008.

Total shipments for January generated revenues of 82.3 billion yen, a 1.1% decline from the previous month and a 3.4% increase from the same month in 2007. The revenue decline from December to January is typical, and is attributed to a normal slowdown in spending after the New Year holiday and Christmas season. 

Unfortunately, this is the third consecutive month of declining revenues since it peaked in October, and it is unusual to experience a 10% decline for the months after October.  January's production volume fell to 2 million square meters, a 5.3% decline from December, but a 3.0% increase from the same month of 2007. Production data also declined for three consecutive months since October 2007. These trends are causing anxiety for production workers and management within the Japanese PWB industry.   They are hoping this is not a signal for a long economic slump similar to the one the U.S. is feeling.

Each product category posted unsimiliar results. January's revenue from shipments for build-up rigid multi-layer declined 7.5% compared to December, but increased 14.5% compared to January 2007. Volume shipped increased 37% from the same month of the previous year, which suggests manufacturers lowered prices to increase their volumes. Revenues also fell for double sided and multi-layer flexible circuits by 3.1% compared to December, but increased 16.3% from the same month of 2007. Since volume shipped increased only 7.8% during the same period, it can be determined that prices did increase. These two product categories performed better than other peer groups due, in part, to advancements and high level technologies.

Volume and revenue results from single side flexible circuits have dropped off considerably. Revenue and volume both dropped by 7.1% and 8.2 % respectively compared to the previous month. Compared to the same month in 2007, revenue dropped by 18%, while volume increased by 2.4%. Unfortunately, this signals a price drop of almost 20% in one year. The "other module circuits," mostly taped circuits, posted similar results. Revenue plummeted by 5.2% compared to the same month of 2007, while volume increased 5.5%, suggesting the category suffered a price decline of almost 10% in one year. The major applications for both categories are flat panel displays--these price cuts are understandable since most customers are applying pressure to reduce costs.

Reports from other categories show that most are treading water. Revenues and volumes have declined from previous months, but represent a small increase from the same month in 2007. Declining prices are also felt from most of the other segments.

Rigid module circuits are the only exception to weaker than expected results. Both revenue (+22.6%) and volume (+9.3%) increased from the previous month. However, for the past year, each month has been feast or famine for this category--most likely because the U.S. is this section's largest source of business. Their results were flat last year, and they too are feeling the pressures of declining prices.

The Japanese management teams for all PWB companies are very nervous when any breaking news comes from the markets. Bad news about market indexes causes most of them to respond, "Because of the down turn in market trends caused by U.S. sub-prime issues..."  I share the same thought.  

Dominique K. Numakura

DKN Research, www.dknresearch.com.

Headlines of the week

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

1.    Nippon Micronics (Equipment manufacturer in Japan) 3/17

Will start the production of the test and measurement equipment of LCD panels in its subsidiary company in Taiwan for local customers by May 2008.

2.    Mitsubishi Chemical (Major chemical company in Japan) 3/17

Will strengthen the R&D team to commercialize the undercoating materials of the OLED panels.

3.    Hitachi Maxell (Major electronics material and device supplier in Japan) 3/17

Will invest 13 billion yen to build a new plant in Kyoto for the production of electrode materials of the lithium ion batteries. 

4.    Mitsubishi Material (Major material supplier in Japan) 3/17

Will invest over 30 billion yen to increase the manufacturing capacity of poly-silicon material 1,000 tons to 2,800 tons per year by 2010.

5.    Toshiba (Major electronics company in Japan) 3/17

Will roll out new mobile notebook PC "Dynabook SS AS1 Series" with 128 GB solid state drive.

6.    NEC Electronics (Major device supplier in Japan) 3/19

Has rolled out seven new power MOSFET devices with two kinds of new small packages. New packages reduces the SMT spaces to one third. Sizes: 3.3 x 3.3 x 0.9 mm and 2.8 x 2.9 x 0.8 mm with 8 pins.

7.    Tatsuta Cable (Second tier cable supplier in Japan) 3/19

Will build a new building in Kyoto to double the manufacturing capacity of the flexible shielding films to 320,000 square meters per year.

8.    TDK (Major component supplier in Japan) 3/19

Has started the volume production of MLCC with new constructions. The new MLCC device is capable to reduce the components with controllable impedance.

9.    Japan Circuit Industry (Major circuit board supplier in Japan) 3/19

Has completed the expansion of the plant in Taiwan. The manufacturing capacity of the thin BGA substrates will double.

10.  Yano Keizai (Market research firm in Japan) 3/19

Has published a new market research report of PWB industries in Japan, Korea and Taiwan with three year projections.

11.  Sony (Major electronics company in Japan) 3/19

Will invest 22 billion yen to expand the OLED manufacturing processes for large size panles.

12.  Denso (Major automobile electronic module supplier in Japan) 3/19

Will invest 16 billion yen to build the sixth manufacturing plant of car air conditioners in Fukushima Prefecture.

13.  NEC (Major electronics company in Japan) 3/21

Will shorten the lead time of MR sensor devices for cellular phones to one week from several months to keep the top supplier's position in the industry.

Interesting Literature Concerning 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. "Chip Packaging 2.0 Provides Benefits to Boards Desiners," Martin Hart, CircuiTree, March 2008.

2. "What Drives the Crowd? -A great technical conference and location are most important, readers say," Mike Buetow, Circuits Assembly, March 2008.

3. "Production Mix for Today's Product Mix," Mike Foster and Larry Groves, SMT, February, 2008.

4. "Improved INNERLAYER BONDING for Sequential Lamination," Jean Rasmussen, Abayomi I. Owei, Danis Isik, Axel Dombert and David ormerod, Printed Circuit FAB, March, 2008.

5. "IC Package Drives Contact Technology Innovation," Ila Pal, Advanced Packaging, March, 2008.

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