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Slow Start for PCB Industry

The first quarter of 2014 is now in the history books and industry sales for January were sent to me recently. Listed below is a summary of this data compared to last year.

Sales usually decline in January compared with December’s business and this year followed that trend. January PCB revenue was down for most of the industry in almost every country when compared month to month. Unfortunately, December 2013 was down compared with the previous month, so it looks like that trend continued into 2014.

Let’s compare the same months year over year. Taiwan, the global leader in the industry, squeaked out a 0.46% increase in January 2014 compared to January 2013; however, January 2014 is the fourth month in a row to post a decline. The loosing streak continued during February partially due to the nationwide Lunar New Year holiday.  

Printed circuit manufacturers are not very optimistic with their forecasts for the remainder of the year. Personal computer sales continue to weaken even though they are the number one product supplied by Taiwanese PCB manufacturers. The PCB demands from smart phones and tablet PCs continue to rise, but growth rates are not as robust as in the past.

Revenue from the PCB industry in North America was down by 7.5% in January compared to the same month of the previous year, and down by 16.9% from the previous month. Incoming orders that will fill the pipeline for the second quarter also declined during the first month. Sales were down, but other segments did show increases. The electronics industry in North America, which includes semiconductors, main frame computers, and EMS, also showed a decrease when comparing the same months year over year.

Revenue from the Japanese PCB industry declined 7.6% in January compared with the previous month, and volume declined by 4.2%. On the other hand, industry posted a 5.7% increase from the same month of the previous year and a 7.4% increase in volume. 

Could this be a sign of a rebound? Unfortunately, no. Shipments in January 2013 were at the lowest level seen in years, so comparing the increase in January 2014 to the same month last year not a great victory. The Japanese manufacturers cannot be optimistic in the next one or two quarters at least.

The data suggests the majority of the global PCB industry is struggling and it's hard to determine how long this recession will run. The slumping consumer electronics industry in Japan continues to overshadow any recovery for the PCB industry. Are we in the middle of the recession, or near the end? Tough to predict, but we cannot expect a turnaround in the short term. The government is extremely optimistic with economic growth in the near future. Most of this optimism is fueled by the booming financial market. Unfortunately, electronics manufacturers and printed circuit manufacturers do not share the same expectations. 

Dominique K. Numakura, dnumakura@dknresearch.com
DKN Research, www.dknresearchllc.com

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