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EPTE Newsletter: Are Things Really This Gloomy?

The month of May is quickly winding down and the June trade show season is fast approaching. On June 13, 2012, the JPCA Show will open its doors at Tokyo Big Sight. The three-day event is the largest trade exhibition for the printed circuit industry.Most agree that the JPCA Show is always a great source of information for both technical and business tidbits. However, it is also a great source of information to predict the future for the Japanese printed circuit industry.  Let’s first look at some data for the last eight years. Listed below are the annual revenue numbers for the Japanese PCB industry (provided by METI), as well as the percent change from the year below:

            2004                818.6 billion yen                      +4.0%

            2005                833.4 billion yen                      +1.8%

            2006                962.7 billion yen                    +15.5%

            2007                1002.4 billion yen                    +4.1%

            2008                895.4 billion yen                     -10.7%

            2009                626.6 billion yen                     -30.0%

            2010                715.2 billion yen                    +15.9%

            2011                616.0 bullion yen                    -14.9%

Growth rates were positive year over year from 2004 to 2007. There was a big hit to revenue during 2008 and 2009 at the peak of the global recession. Markets in every country suffered during this period. The industry did recover nicely during 2010 and posted a 15% increase over 2009. The entire industry did not get caught up in the recovery wave, so analysts predicted slow and steady growth for 2011. Unfortunately, this did not come to fruition.  Not only did revenue fall by 15% compared to the previous year, but the industry also posted its lowest annual revenue in eight years. The bad news for the Japanese industry is this double-digit negative growth did not happen in Taiwan, the U.S., and Germany. Taiwan has set new revenue records for this same period of time, and the U.S. and Germany are showing small, but positive, increases.   

Most business analysts from the Japanese printed circuit industry recall the business environment in the U.S. after the IT bubble crash in 2001. The U.S. PCB industry suffered significant declines and most of the larger sized circuit manufacturers quickly disappeared from the industry. The IPC APEX EXPO is a large trade show for the industry and attracts worldwide audiences. Participation dropped dramatically in 2002, and the show could never recover.

I think the JPCA Show 2012 will be very positive and upbeat. I do not think I will see any signs pointing to an industry meltdown. However, I will be able to network and gather market information by communicating with the industry experts and management teams during the show. Some of this chatter I pick up is a more realistic outlook for the industry in the upcoming year. I look forward to sharing these opinions in an upcoming newsletter.

Dominique K. NumakuraDKN Research, www.dknresearch.com

Headlines of the Week

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

1. Asahi Kasei (Major chemical company in Japan) 5/14 The company begun construction of its new PCB photo dry film manufacturing plant in China with an annual capacity of 120 million square meters. 2. Mirie Automation (Equipment manufacturer in Taiwan) 5/15 The manufacturer has received many new orders for manufacturing equipment from Chinese LCD manufacturers for 5G, 6G, and 8G lines.3. Bridgestone (Major tire suppler in Japan) 5/15 The supplier has decided to close its e-paper business due to extreme price competition in the market. Manufacturing will be terminated by October 2012.4. Panasonic (Major electronics company in Japan) 5/15The company has rolled out a new 65” white board with PDP technology for business use. New 85” and 103” products will be commercialized by the end of the year.5. Nippon Electric Glass (Major glass material supplier in Japan) 5/16The supplier will open a new manufacturing and marketing subsidiary in Korea for the local LCB glass substrate customers.6. Furukawa Electric (Major cable manufacturing company in Japan) 5/17 The company will ship out its first high-voltage (275 kV) super conductor cable from Ichihara Plant. A field test will be conducted in China.7. Ricoh (Major electronics company in Japan) 5/21 The company has developed a new lead-free piezo material applying inkjet printing process of PZT for actuator devices.8. Kobelco (Major steel supplier in Japan) 5/23 The supplier has developed a new fuel cell separator material by coating carbon material on titanium. The material reduces the contact resistance to half compared to other metals.9. Sharp (Major electronics company in Japan) 5/24 The company has agreed to a procurement alliance with Toppan Printing and Dai Nippon Printing for LCD color filter materials at the Sakai Plant. 10. New Japan Radio (Device manufacturer in Japan) 5/24The manufacturer has established the first volume production process for copper wire bonding on aluminum pads for power semiconductor chips. Recent Articles from DKN Research

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