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EPTE Newsletter: Preliminary PCB Industry Results For 2016
Once summer is over, the year slips away: I can’t believe we are in the last month of 2016. We have almost a year of sales data from the global printed circuit industry, so this is a good time to analyze this year’s performance and consider business plans for 2017. Since printed circuits are the major components in electronic products, let’s review PCB market trends in the global electronics industry.
Taiwan is considered the top country for circuit board production (including manufacturing from China). Monthly shipments of printed circuits from Taiwanese manufacturers increased for both 2nd and 3rd quarters. Most of this increase was from the robust sales of PCs. New products from Apple dramatically increased the sales of flexible circuits until the month of September where shipments posted a negative result comparing month over month. Revenue for the Taiwanese industry lost its momentum during the 4th quarter. Year-to-date revenue through October was 2.7% less than the same period last year. I am not too optimistic sales will increase for the remainder of the year; so my prediction is that annual revenues will decrease by 3% compared to last year. This will be the first negative result since the global recession in 2009.
Revenues for the Japanese printed circuit industry are also disappointing. Year-to-date through September, revenue declined 10.4% compared to the same period for last year. This drop in revenue can be attributed to a 6.3% decrease in shipments. Unfortunately, printed circuit manufacturers must trim their margins to remain competitive in this limited market.
The major market for rigid board manufacturers in Japan comes from domestic mobile products that includes smartphones. Unfortunately, market share for Japanese equipment manufacturers has been eroding all year, so I am pessimistic for a rebound during 4th quarter.
Flexible circuit manufacturers are performing the worst. Revenue decreased by 20.1% and volume declined by 8.9% through September, comparing year-over-year. These flex manufacturers might have to lower prices. Their largest customers are smartphone companies from other countries, and pricing is extremely competitive from Taiwanese and Korean flex circuit manufacturers.
Year to date revenue from module circuit manufacturers (mostly substrates from semiconductors) increased 0.2% during the first three quarters of this year compared with last year. Unfortunately, revenue declined by 10.2%. The global semiconductor market grew during the same period. Japanese module circuit manufacturers continue to lose market share. Total sales from the Japanese printed circuit industry will decline about 10% in 2016. This will be the largest market decline since the global recession in 2008 and 2009.
The printed circuit industry in North America posted relatively small growth results during the first three quarters in 2016. I was predicting a 4−6% growth this year, however, shipments and pre-booked orders slipped by double digits from September to October. This decline is different from normal seasonal fluctuations. YTD revenue for the first 10 months posted a 2.8% growth compared with the same period last year. This is a significant pull-back from the previous months. Both revenue (-8.3%) and pre-booked sales (-1.8%) for October indicate a negative result comparing month-over-month to last year. The industry forecast does not show an optimistic outlook for the last two months of the year. Industry growth for the North America market will be about 1% less than the previous year.
Germany is the largest printed circuit producer in Europe. Industry growth for the first eight months of the year is negligible; however, YTD revenue for the first eight months decreased by 0.1% compared with the same period last year. Fortunately, orders increased recently, and the industry is forecasting a growth for 2016.
I do not have any numerical data for the Korean printed circuit industry this year; but I believe the Samsung’s Galaxy Note 7 debacle caused chaos for the Korean electronics industry. All production in the 4th quarter has stopped, and the manufacturers in the supply chain cannot predict when business return. I do not have enough data to estimate the amount of losses for the Korean printed circuit industry but it will be a significant drop.
My market review shows a few positive signs for the printed circuit industry, but the global printed circuit industry could post its first negative growth since the global recession during 2008 and 2009. Let’s hope this is a one-off year, and this trend does not carry into 2017. But we should think about our action plans before the new year.
Headlines of the week
1. Rohm (Major electronic device supplier in Japan) 11/18
Has commercialized a new DC/DC converter “BD9227F” with 75% smaller space and 19% smaller power consumption.
2. Juki (Major assembling equipment manufacturer in Japan) 11/17
Has rolled out a new 3D circuit board inspection machine “RV-2-3D”. Its tact speed is 22 cmsq/second.
3. DISCO (Major semiconductor equipment supplier in Japan) 11/21
Has commercialized two models of semiautomatic dicing saws with the world smallest footprints.
4. AIST (Major R&D organization in Japan) 11/18
Has developed a new synthetic process to produce hybrid submicron particles of silver and calcium phosphate for dental treatment.
5. Kyocera (Major electronics company in Japan) 11/28
Will absorb Kyocera Crystal Devices and Kyocera Connectors to strengthen the marketing and R&D of the new products.
6. Hitachi (Major electric & electronics company in Japan) 11/28
Has developed a new small size semiconductor chip for gene analysis in a bio cell. It can analyze 100 genes in parallel and with high accuracy.
7. Fuji Electric (Major electric equipment manufacturer in Japan) 11/24
Has rolled out a new 145kV GIS (Gas Insulation System) “SDH714” for large scale power generation plants.
8. Rohm (Major electronic device supplier in Japan) 11/25
Has commercialized a new motor drive IC “BD6415EFV” without sensors for ultra-high-speed laser scanners.
9. Toshiba (Major electric & electronics company in Japan) 11/28
Will open H2One, a model facility of hydrogen gas supply station in Fuchu, Tokyo for fuel cell automobiles.
10. Mitsubishi Materials (Major material supplier in Japan) 11/24
Has developed a new chip thermistor with monolithic construction for automobile applications. It works in high temperature circumstances up to 200°C.
To read more recently articles, or back issues of the newsletter, click here.
To reach Dominique K. Numakura, click here.
Visit DKN Research at www.dknresearchllc.com.
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