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Things are Slowing Down in Taiwan

The electronics industry in Taiwan grew year over year for the last 15 years. The only year that posted no growth was 2009, the year of the global recession. Taiwan now has the look and feel of a manufacturing hub for the consumer electronics industry. Personal computers, tablet PCs, cellular phones, digital cameras, flat panel TVs, game machines and more are supplied by Taiwanese companies. Most of these Taiwanese companies expanded their operations to Mainland China and other Asian countries.

When a new project is underway, the first step for Taiwanese manufacturers is to design the printed circuit. Once the design model is complete, equipment manufacturers conduct procurements for materials and components. These procurements serve as a barometer for the electronics industry. We can forecast business trends for the consumer electronics industry by reviewing the business activities and shipments from printed circuit manufacturers and suppliers. Fortunately for the market analysts, public companies in Taiwan have to disclose their financial performances every month. This allows us to define a market trend in a short period of time. Most manufacturers informally talk about their short term forecast, and sometimes these informal conversations are leaked to business media outlets. The information is very reliable because these manufacturers have already booked the orders from their customer.

With that said, I reviewed a few of the business trends in Taiwan, and it may be a bumpy road over the next few quarters. Historically, printed circuit shipments in Taiwan grow continuously from the summer season as everyone gears up for the Christmas push. This time, growth has been stagnant since June. Revenue continues to grow, but the growth rate is moderate compared to previous years. The monthly shipments for six months are posting a negative growth compared to the same period of time last year. Also, shipments for printed circuit raw materials are posting a negative growth. This tells me that printed circuit manufacturers are not optimistic over the next few months.

These market trends in Taiwan are very understandable because sales for most of the major electronic products are not as vigorous as they were over the last few years. Personal computer sales continue to decline, and sales are expected to decrease by a double-digit number. Tablet PCs will post their first negative growth in sales this year, and the growth rate for smart phones are also declining. Digital cameras sales have decreased more than 30% every year, and the industry has almost disappeared from the market.

The recent news from Taiwan is not very optimistic; manufacturing companies are very pessimistic with their fourth-quarter forecasts. The media continues to report about the dismal global economy due to the uncertainty in the Chinese economy and the roller coaster rides in the financial markets. Taiwan is not uncertain at all—they are pessimistic with the business outlook for the rest of the year.

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Headlines of the week

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

1. Toppan Printing (Major printing company in Japan) 9/11
Has developed the industry first humidity sensing color film with double reflection mechanisms.

2. Yokowo (Electronic device supplier in Japan) 9/14
Has developed a high grade Doppler module for 79 GHz band radar of speed sensor.
 
3. Toppan Forms (Electronic device and material supplier in Japan) 9/14
Has developed a new heat resistant IC Tag. It can survive during multiple heating processes over 200°C.
 
4. Hitachi Maxell (Major electronics material supplier in Japan) 9/15
Has expanded the coating capacity of coating type separators of the lithium/ion batteries for EV applications.
 
5. YAMAHA (Major equipment manufacture in Japan) 9/18
Will commercialize a new series of vertical type robot “YA Series” with multiple joints for various automations.
 
6. NEC (Major electronics company in Japan) 9/24
Has upgraded the material identification technology. It can eliminate imitations from real materials exactly.
 
7. Hitachi (Major electric & electronics company in Japan) 9/28
Has developed a new invertor with double face cooler type SiC power module for automobile applications.
 
8. Kyocera (Major electronic device supplier in Japan) 9/26
Has organized a new alliance team to develop a industrial standard of sensor devices of smell.

9. JIEP (Technology organization of electronic packaging in Japan) 10/1
Will have a technical symposium about advanced hybrid materials for wearable devices.

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To reach Dominique K. Numakura, visit www.dknresearchllc.com or email dnumakura@dknresearch.com.