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EPTE Newsletter from Japan: June PWB Production in Japan

The Japanese Ministry of Economy, Trade and Industry (METI) recently released June's production data from Japan's printed circuit industry. We now have a six month snapshot for 2008 and can review market trends for this period and forecast performance for the remainder of the year.

Revenue and volume for the Japanese PWB Industry has steadily declined since the beginning of the year; however, shipments during June increased, and we are hoping this may signal a rebound. Total revenue during June totaled 79.65 billion yen, representing a 5.6% increase from the previous month, but a 1.4% decline compared to the same month last year. Total volume shipped during June was 2.105 million square meters; a 5.6% increase from the previous month, but a 2.5% decline compared to the same month last year. 

Performance during June finally snapped the declining trend line for the first five months of the year. June's revenue is less than the same month last year; however, comparing month over month, the negative performance during June is much smaller than in previous months.

Total revenue for June from the rigid PWB segment increased 10% from the previous month, but decrease 2.5% compared to the same month last year. Volume increased 6.4% compared to the previous month; however, this represents an 8.6% decline compared to the same month last year. This data suggests that selling prices have improved for manufacturers-especially true for the multilayer boards higher than 5 layers and build-up boards.

The positive upswing from flexible circuit production was second to those posted from the rigid PWB segment. Both segments enjoyed positive growth; however, growth is still negative compared to the same month last year. The good news is the monthly decline rates are slowly shrinking. The improved results can be attributed to the production of double and multi-layer flexible circuits. These two segments are primarily the reason for improving market trends.

Volumes for module circuits (including IC substrates and tape circuits) are trending differently than the rest of the industry. June's production volume increased 8.6% from the previous month; however, revenue decreased 3.8%. Unfortunately, this signals significant price cuts during the month. The segment did enjoy a surge in volume, but less money was collected at the end of the day. Tape circuits for driver modules in flat panel displays was probably the component most prevalent to influence these market trends.

Year-to-date revenue through June 2008 totaled 476 billion yen, representing a 4.1% decline for the same period last year. Year-to-date volume through June 2008 totaled 12.2 million square meters, which represents a 0.1% increase compared to the same period last year. 

This could be a very difficult year to post positive growth compared to last year. Several circuit products (multi-layer rigid boards, build-up rigid boards and double- and multi-layer flexible circuits) could still end up on the positive end if their numbers achieved during June carry through the rest of the year. Module circuits recorded an upturn in numbers during the second quarter, but their performance runs hot and cold so it is very difficult to forecast end results from sporadic trends.

Upper management from Japanese PWB manufacturers and material suppliers are grateful for the jump in business during June; however, most are still uneasy. The group is not sure if this signals the beginning of a long growth streak or just a momentary bounce. Last week the Nippon Bank officially announced an end to the long expanding season and further added that the Japanese market will now enter the slow season.  Hopefully, the bank is wrong and the upswing during June is not just a flash in the pan.

Dominique K. NumakuraDKN Research, www.dknresearch.com

Headlines of the Week

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

1. Mitsubishi Electric (Major electronics company in Japan) 7/28The company will terminate its circuit board business by the end of 2008. Current annual revenue is approximately 6 billion yens. All of 80 employees will move to the company's other business.

2. Shirai Denshi (Major PWB manufacturer in Japan) 8/6The manufacturer has developed a transparent and soft material as the base substrate for flexible circuits.

3. Kyocera Chemical (PWB material supplier in Japan) 8/6The supplier has developed a new halogen-free coverlay film for flexible circuits. Low stiffness of the film will make circuits very flexible.

4. Tokyo University (Japan) 8/8The university has developed an elastic material boasting the world's highest conductivity. The conductivity does not change with expansion.

5. Sanyo Electric (Major electronics company in Japan) 8/8The company will create a new subsidiary in Vietnam for manufacturing and marketing of optical pick-up modules.

6. Furukawa Electric (Major cable manufacturer in Japan) 8/12The manufacturer has lost JIS certification of copper products due to violations of the tensile strength test process for quality control.

7. Hitachi Chemical (Major electronics material supplier in Japan) 8/13The supplier will invest 520 million yen to establish a new R&D center in Suzhou China for dry film products of printed circuit boards.

8. Matsushita Electric Works (Major PWB material supplier in Japan) 8/13The company has rolled out a new series of BTB connectors for the connection between rigid boards and flexible circuits with slim width (2.5 mm) and 0.4 mm pitch.

9. Shinkawa (Equipment manufacturer in Japan) 8/13The manufacturer has commercialized a new wire bonding machine "UTC-3000" featuring an automatic alignment correction system.

10. CMK (Major PWB manufacturer in Japan) 8/13The company has decided to close its operation in Indonesia due to severe price competition from low-end circuit boards coming from local manufacturers.

11. Micro Tech (Equipment manufacturer in Japan) 8/13The manufacturer will build a second manufacturing plant in Niigata Prefecture to expand the production capacity of fine screen printing machines.

12. Sony (Major electronics company in Japan) 8/18The company will invest 40 billion yen to increase the manufacturing capacity of lithium ion batteries for booming demands from mobile electronics.13. Matsushita Electric Works (Major PWB material supplier in Japan) 8/21The supplier is planning to expand its flexible circuit connectors business by introducing the BTB connector, "Tough Contacts" and FFC ZIF connector, "YF31". Both are the smallest in the industry.

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," Dominique Numakura, Denshi Zairyo, October, 2007 (Japanese only).

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. "Creating Connections Between Electronics Design and Manufacturing," Rob Evans, CircuiTree, August, 2008.

2. "Cutting Machine Programming Time," Edward Faranda, Circuits Assembly, August, 2008.

3. "Advancements in Solder Paste Dispensing," Dan Ashley and Steven Adamson, SMT, July, 2008.

4. "Product Development Challenges in a GLOBAL MARKET," John Isaac, Printed Circuit Design & FAB, August, 2008.

5. "Advanced Micro Imaging of Gold-gold MEMS Wafer Bonds," Tom Adams and Kevin Turner, Advanced Packaging, July, 2008.

6. "Microflex Circuit Applications for Medical Devices," Luke Volpe, MD & DI Magazine, January, 2008.