The European PCB industry defends itself, thanks to technology and proximity (Jan 2003)

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What Future Path for the Big Manufacturers? The European PCB industry defends itself, thanks to technology and proximity

By Phil Bleu and René-Martin Simonnet (Pistes & Pastilles magazine)

To escape the Asian steamroller, the PCB manufacturers of Western Europe hasten their redeployment toward more sophisticated production. Increasingly, they take advantage of the Old Continent's assets—grey matter, close-at-hand service, and the capacity to adapt itself and to diversify. The year 2003 will show how European PCB manufacturers anticipated the consequences of globalization.

While global PCB production declined 26.3% in 2001, Europe lost only 13.1% of its sales, representing the least negative result on the planet after China (-1.1%). The most industrialized side of Europe—the European Union and Switzerland—resisted decline even better, with an 11.3% drop. The primary reason is that the 2001 downturn started later in Europe than in the US.

On the European continent, board manufacture is mainly of single- and double-sided NPTH (non plated through hole), which suffered most from the industry decline and from globalization, with a 28.1% drop. PCBs with microvias, on the other hand, maintained their position, while special and miscellaneous PCBs declined just 5.1%. This clearly demonstrates that the main manufacturers resisted decline more effectively, whereas the more modest workshops (often more limited from a technology point of view) fell farther back or succumbed under the pounding of Asian prices.

There's nothing more to be said than this: If Europe wants to remain an important PCB actor, it should concentrate on strategies that enable it to avoid falling to Chinese PCB manufacturers. The misfortune of some European heavyweights, such as AIK Electronics Austria, demonstrate that one can no longer fight from Europe exclusively on the field of price, especially for common products in big series, including the mobile phone PCB.

On the contrary, the persistent solidity of the four Swiss companies in our position graph proves that one can continue to make PCBs in a competitive way, in a very expensive country, with little industrialization and fanatical environmental protectionists. The Helvetian manufacturers have long occupied some niche markets where they have a virtual world monopoly. They specialized in rare breed products and . . . in the Golden Fleece.

In the same vein, new technologies should find a place in the sun in the European manufacturers' offering. Those who develop the SBU, the special microvias, the RF and HF, the buried passive layers or the optoelectronic seem to have chosen the good strategy; and our inquiry reveals that they are more and more numerous. Indeed, the added value of Europe lies first of all in its R&D capacity: The OEMs' designers and research departments will always turn to the closest person if they can find real help there.

Another possible strategy for European PCB survival is partial relocation: The prototypes and the starting series stay in Europe, whereas normalized production is transferred to low-cost countries, where factories of the same group, outfitted with the same equipment, carry out contracts signed in Germany, Austria or Finland. But beware: The settlement of multinational groups in the printed circuit board field should be guided by the market and by production's logic, not by concern about structural cost reduction—in other words, by making workshops into kebab.

The Viasystems flash-in-the-pan in Europe is a perfect example: 2002 will be perhaps the last year of the American group's presence on the Old Continent. A number of European manufacturers, among them those whose sales exceed €20 million, are survivors of the Viasystems adventure. Zincocelere in its turn has just managed to get out of that quagmire, and one wonders about the future of the last European PCB factory of the Texan financiers: Mommers, in The Netherlands. One can be sure of only one thing: Viasystems' decisions will not be dictated by a desire to save jobs and European technology.

In 2002, Dr. Hayao Nakahara of N.T. Information Ltd. anticipates that Europe will have a negative growth of 25%. Seven companies among the top 36 filed for bankruptcy of one subsidiary or the entire company during 2002. The year 2003 will show how European PCB manufacturers anticipated the consequences of globalization.

All our thanks to Michael Gasch (Schweizer Electronic AG) for his important help in our inquiry.

Top 36 European PCB makers in 2001 (figures in €millions)(Figures reflect European production only)

1 AT & S  Austria 276 2 *Ruwel  Germany 222 3 *Aspocomp Finland 151 4 Vogt-Fuba Germany 145 5 Alcatel France 142 6 Viasystems (subsidiaries)   127 7 Eurocir Spain 111 8 Circatex U. K.  107 9 Schweizer Germany 97 10 Multek Germany 88 11 Freudenberg Germany 85 12 Cire France 79 13 Microser Spain 73 14 *STP Germany 72 15 Würth Germany 70 - Mommers (Viasystems) The Netherlands 67 16 Lares Cozzi  Italy 65 17 PPC Switzerland 60 - Zincocelere (Viasystems) Italy 60 18 DDI United Kingdom 55 19 *PPE Germany 53 20 Invotec United Kingdom 52 21 Inboard Germany 51 22 Elman Italy 50 23 Prestwick United Kingdom 45 24 *Rotra Germany 40 - Somacis Italy 40 26 Cofidur France 37 27 Photochemie Switzerland 32 28 *AIK Austria 29 - Chemitalic Denmark 29 30 SAT-Sagem France 28 31 HMP Germany 26 - KSG Germany 26 33 *Elbasa Spain 24 34 Cicorel Switzerland 23 35 Optiprint Switzerland 22 36 Pri-Dana Denmark 22

* Marks PCB companies who filed for bankruptcy of a subsidiary or the company in 2002

European Countries with PCB Companies in the Top 36

Germany 12 France 4 Italy 4 United Kingdom 4 Switzerland 4 Spain 3 Austria 2 Denmark 2 Finland 1 The Netherlands 1

PCB Production in the European Union and Switzerland (figures in €millions)

Production 2001 2000 DSPTH 1191.83 1183.15 Other SS and DS 347.25 483.03 Multilayer 2352.56  2749.64 including microvias 423.52 425.34 Others 340.95 359.37 Total 4232.59 4775.18 Manufacturers No. Total Turnover No. Total Turnover Turnover -1.5  191 178.91 190 156.20 Turnover 1.5 to 7.5 178 543.41 242 576.74 Turnover 7.5 to 25 82 1019.21 87 1132.79 Turnover +25  37 2491.02 36 2909.45 Total 488   555   Total Employees 38,692   44,657  

European Top 35 (Comments by company) AIK

The second Austrian PCB group, AIK has really fallen back since the time it acquired from Philips Klagenfurt's factory (7,700 m2), credited with 41 M€ sales in 1997. After other acquisitions in PCBs, including the English factory of Croydon, AIK raised itself to the 12th European place in 1999, with a 75-M€ turnover. This performance was not renewed, and its sales figures declined 9 M€ from 2000, though this year was a good period for all the European PCB industry. Since then, AIK Electronics Austria has diversified and added to its single- and double-sided production (which represented 29 M€ in 2001) an assembly activity that brought 10 M€ the same year. At the same time, AIK had to resign itself to reduce its laminate production and close its Dutch factory, AIK Laminates PB, which employed 48 people. The production of laminate still continues in the German factory at Kassel.

Alcatel

Since 1998, the French group has seen its European PCB turnover oscillating between 125 and 170 M€. Our classification takes into account the activity of the factories located in France, Italy and Belgium. This last one, situated in Gand, should be sold or closed soon. On the contrary, the group invested in its two other sites. The grouping of these units seems to have been postponed later.

Aspocomp

The 2001 results of this Finnish group take into account as well the Evreux factory, with 41.4M€. Aspocomp Oy has been the European No. 3 since 1998, except in 1999 when it was surpassed by AT&S. Its turnover fluctuated a lot during this period, between 150 and 240 M€. Aspocomp now counts no more than four factories, all located in Finland and centered on telecoms: Oulu (5,400 m2), Padasjoki (5,500 m2), Salo (21,300 m2, [see photo]) and Teuva (4,000 m2).

AT & S

The European number one is now AT&S, whose 2001 production in Austria amounted to 276 M€. Contrary to the Viasystems rocket, the ascent in power of Austria Technologie & System-technik AG has been built year after year: European No. 5 in 1995, No. 4 in 1998, No. 3 in 1999, No. 2 in 2000, and finally No. 1 in 2001. How could it be more regular?

Willibald Dörflinger's group notably made a 12% increase on its HDI with microvias PCB production, even when world production shrank by 12%. A part of its Austrian production has been exported to China, amounting to an expected 8 M€. This stream will quickly increase, because AT&S will start production in its factory at Shanghai early in 2003. Its 145-M€ investment in the Shanghai plant represents the biggest investment ever realized in China by an Austrian company. AT&S plans to employ, eventually, 750 persons, including about 100 executives and Chinese engineers, serving the local telecoms market.

The objective of the group is to realize a turnover of 145 M€ in 2005. In Europe, the head office at Leoben* (pictured) concentrates on R&D for HDI with microvias PCB. Fehring's factory works mainly for the motor sector, whereas the other site, located in Fohnsdorf, specializes in prototypes with short delivery time. *AT&S is moving its headquarters to Vienna early in 2003.

Chemitalic

The first Danish manufacturer shone in its constancy until the fiscal year 2000-2001: a 26.63 M€ turnover, compared with 27.3 M€ in the 1996-1997 years. Unfortunately, the economic conditions have changed substantially since then. In 1997, the company was rapidly expanding by more than 24.4%, having purchased its compatriot Printeq. An alliance was being prepared with the third Danish manufacturer and with the Italian firm FCE.

A total change of scene these past years: Chemitalic's deficit for 2000-2001 reached the considerable amount of 5.84 M€, amounting to 22% of its global sales. The following fiscal year was a little better, but the losses amounted all the same to 1.86 M€, with a turnover again fallen to 17.93 M€. Until now, the staff has decreased only slightly from 215 to 200 persons.

It's risky to change radically. To survive, Chemitalic A/S is transforming and abandoning the logic of pure and hard production. It is going to become a services company that will propose to its customers the shortest and most economical way to progress from prototype to finished product. Production thus is not disappearing at Horsens, but it is just one of several means to serve Chemitalic's customers. For lack of being able to continue to fight against Asia on the basis of serial production, the Danish firm is concluding an agreement of representation with one or several Asian manufacturers, who would execute its big series orders.

Cicorel

Always geared to clocks and watchmaking, and now medical and high-technology PCBs, the third Swiss manufacturer stays carefully away from the world market ups and downs. Although it counts customers on five continents, Cicorel confines itself to niche markets where the competition is very limited. The counterpart of this tranquillity is the stability of its level of activity, except for some exceptional contracts: Cicorel's 1997 turnover was equivalent to 22 M€ and its 2001 turnover was 23 M€. However, for the first half of 2002, Cicorel announced a 0.7-M€ loss for 9.9 M€ sales and a 10% decrease in staff.

Circatex

In 1995, South Shields' factory was independent and was called ISL. It was the second European manufacturer with a 164 M$ turnover and aspired to get 20% of the European production of printed circuits-a doubtlessly unrealistic objective. Viasystems' first acquisition in Europe, this factory stayed in the bosom of the American group until 2000. Last year, having won back its independence, it was classified right away in eighth place, with a 107-M€ turnover. Circatex notably distinguishes itself with SBU and PCBs with buried capacities.

Cire

The first French manufacturer of printed circuits, the group Cire is made up of 10 general-interest or specialized workshops. Since 1999, its sales have varied little, between 72-81 M€, which maintains the group among the top 15 producers.

Cofidur

The third-ranked French producer maintained its level of PCB activity with 37 M€ in 2001, as in 2000. This general-purpose group, which counts six printed circuit board workshops, makes the main part of its turnover in assembly and design.

DDi

From this American group, the 22nd world PCB manufacturer, we comment only on its production in Europe, which makes it the second British producer. Dynamic Details, Inc. counts three PCB factories in the United Kingdom: Marlow, Tewkesbury and Tolworth.

Elbasa

The Catalan manufacturer based in Esparreguera entered voluntary receivership in July 2002 after a capital injection and a change of sales management. This third Spanish manufacturer, hoping to pursue its activity, turned 90% of production to exports and tried to avoid reorganization by liquidating its debts before 2003. Elbasa plans to keep 80% of its 250 employees. The company's main domains are telecoms, industrial control and computers.

Elman

This second Italian manufacturer plays the card of regional diversity. Elman Spa indeed possesses four factories divided throughout the Italian peninsula, which allows it to make PCBs with high-cost technology (in the North) as well as basic productions in big series and low price (in the South).

Eurocir

After a jump that took it from the 18th to the ninth European place between 1998 and 1999, the Spanish company Eurocir has progressed more slowly, at the rate of one place a year.

Freudenberg

No regression for the fifth German manufacturer (the former Mektec acquired by the Freudenberg group), which protected in 2001 its turnover of the previous year and so regains a place in the classification.

HMP

Created in 1889 in Berlin, Heidenhain was bought in 1991 by Microprint. Under the name of Heidenhain Microprint GmbH, it now produces all the common types of PCB, from the prototype to the big series, as well as SBU and HF PCBs with copper substrates.

Inboard

Inboard saw a regular progression in turnover for three years: 46 M€ in 1999 , 48 M€ in 2000, and 51 M€ in 2001. Inboard PCB Technology, a Siemens and Sanmina joint venture, notably makes in its factory of Karlsruhe microvia PCBs, thanks to the Siemens Simov technology; it also does PCBs with printed resistive layer or buried capacitors layer. It works almost exclusively for telecom and industrial electronics.

Invotec

Another survivor of the Viasystems' adventure: The former Forward group, the seventh European manufacturer in 1995, was acquired by the American company in 1998, just after ISL. In August 2001, the three factories that constituted the "Special Products Group" of Viasystems were acquired by their managers and are restarting the market conquest under their own banners. Invotec Group Ltd. includes Blackburn (200 people, 9,000 m2), Telford (100 persons, 5,000 m2) and Tamworth (200 people, 6,000 m2).

KSG

This former East German manufacturer, created in 1956 and privatized in 1993, is located in Gornsdorf, in Saxony, where it employs 238 people. KSG Leiterplatten GmbH produces primarily single- and double-sided and multilayers, but also HDI PCB. Its main market is industrial electronics.

Lares Cozzi

The end of the difficulties for the first Italian manufacturer? The Lares Cozzi SpA shareholders made a capital injection in 2002 by multiplying by eight the funds that they had injected initially in the group. This recapitalization should allow the family firm to erase the negative impact of the telecom market, which had driven it into serious financial difficulties.

To adapt itself to the new state of affairs, the Aquila factory-bought in 1999 from the national telecom operator Italtel and renamed Lares Techno-was put to sleep at the end of last summer. Thanks to the help of local communities, its 210 employees will not be dismissed. Production continues on Paderno's main site (20,000 m2, and 340 people).

Microser

The first Spanish manufacturer in 1998, with about 50 M€ in sales, Microser was outstripped in 1999 by Eurocir. Henceforth Tyco Electronics' subsidiary, it has kept this second place in the Iberian Peninsula, which corresponds to 13th European place, in spite of an 11% drop in its sales last year. Its factories are situated in Madrid and Boecillo, near Valladolid.

Multek

This former HP plant in Böblingen was acquired in 1998 by the American EMS DII, which possesses as well the American PCB manufacturer Multek, the 12th world manufacturer in 2001. Figures published here concern Multek's European production only. After regular growth, from 61 M€ in 1998 to 107 M€ in 2000, the German subsidiary, which also acquired last year Ericsson's Kumla factory (17,000 m2) in Sweden, underwent a 17% regression in 2001 but still remains 10th in our classification.

Optiprint

Fellow countryman and almost the twin of Cicorel, Optiprint is experiencing a peaceful growth, from 18.3 M€ turnover in 1997 to the equivalent of 22 M€ in 2001. Its factories of Rehetobel and Berneck propose very up-market products: RF PCB and HF PCB made with exotic materials, flex and flex-rigid, chemical palladium finishing, and huge PCBs up to 3,000 x 550 mm.

Photochemie

After its purchase by the American Jim Rothstein in 1995, and external growth all over the place until 1998, the second Swiss manufacturer stabilized. It made in 2001 a turnover equivalent to its 1997 turnover of 32 M€. The situation brutally evolved last February with the death of Jim Rothstein. His widow took charge of the company but by selling Fela's factory to its managers. For this year, with the Unterägeri's only factory, Photochemie AG should sell 9.5 M€, in prototypes and small series.

PPC

The first Swiss manufacturer again achieved a usual level of sales last year, after an exceptional year 2000, when it attained 71 M€. Its 2001 turnover, close to 60 M€, still remains superior by more than 10% to its 1999 turnover. Oriented to exports at 98%, PPC Electronic AG employs 90 persons at its Cham site. Besides PCBs with thermic drains and HF, it works on optoelectronics and specializes in products outside the ordinary. Its record: a 1,350 x 610 x 6.5mm board, with 42 layers and 50,000 vias.

PPE

Now that the French Pulversheim factory has been closed, Endress + Hauser's subsidiary has situated itself on the German Schopfheim' site. Although the bankruptcy was pronounced, PPE GmbH continues to employs 450 people and always hopes to find a buyer.

Prestwick

The Scottish manufacturer does not seem to have found the road to growth after its loss-making fiscal year 1998, which drove it to the dismissal of 60 persons. Its repurchase in 1999 by the TT Electronics Group did not stop the erosion of its turnover. The 10th European manufacturer in 1998 with a turnover equivalent to 66 M€, Prestwick was 16th in 1999 with 63 M€ in sales, 19th in 2000 with a turnover of 53 M€, and finally 23rd in 2001 with a turnover of 45 M€.

The fire at its Ayr factory in August 2000 hurt it badly, at a time when the manufacturers were filling up with orders. This site, which was to be reoriented toward mass-lam production, was finally closed last April. A new plan of dismissal of 50 people, in August 2002, cut the staff to 340 persons, gathered together in Irvine.

  Pri-Dana

The second Danish manufacturer, Pri-Dana Elektronik A/S employs 130 persons in its Hedensted factory, which covers 15,000 m2. Its activity is steady.

Rotra

The former PCB Grundig subsidiary is ranked 10th in Germany, with 40 M€, compared with 18.9 M€ made in 1997. It has the ambition to increase its sales in the motor sector from 25% to 33%. It main site, in Nuremberg, employs 240 people on 10,500 m2. A smaller workshop in Kronach is comprised of 85 employees and produces high-technology PCBs.

Ruwel

Heir apparent of AT&S in the 2001 European top PCB makers, the Ruwel AG group does not seem to have suffered from its disappointment in Bayonne, France, which represented 35 M€ of its sales last year. Since 1998, its sales jumped from 200 to 230 M€, and its second European place was disputed only in 2000. At the same time it abandoned its French factory, Ruwel invested in a new unit in Germany, Geldern II, specialized in masslam. The group so counts 6 factories in Germany and one in Denmark, which add up 73 000 m2 workshops.

SAT-Sagem

The fourth French manufacturer counts only one PCB factory in Anion, which worked at reduced speed last year. This captive workshop only represents 1-2% of sales for Sagem SA, which works in telecommunications and in avionics.

Schweizer

For about 10 years, SEAG has oscillated between eighth and 11th place in the European PCB manufacturer order. Its sales move with regularity between 77 and 97 M€. It has put in service a new factory of 10,000 m2 on its historic Schramberg site. See our <a href=http://www.pcb007.com/INTELLIGENCE/display.asp?id_news=10949>interview</a> with its international sales manager, Michael Gasch.

STP

Since 1998, the German manufacturer STP Elektronische Systeme GmbH had occupied in an unmovable way the seventh place in Europe. This time seems definitively past: After a fall to 14th place and a decline of 44% in sales last year, this group filed for bankruptcy in 2002, victim of the tribulations of its customer Cisco. The bankruptcy touches not only Sindelfingen's main factory, which was acquired from IBM, but also Albstadt's workshop, affecting 800 persons on the whole.

Viasystems

Between 1998 and 2000, Viasystems dominated the printed circuit in Europe, with a European turnover on the order of 360-430 M€ per year, while its closest competitor should content itself with 200-300 M€. The past: In our 2001 sales rating, both surviving PCB factories of Viasystems in Europe-Zincocelere in Italy and Mommers in Netherlands-produced only 127 M€, about equally between them, which sends them into the depths of our rating.

Moreover, it is possible that Viasystems simply disappeared from the European prize list in 2002: late in 2002, Zincocelere announced its repurchase by its management, for the moderate sum of 10 M€. Its two factories located in northern Italy, Cavaglia and Pont-Saint-Martin (which employ 700 people), made 60 M€ sales in 2001, with 70% coming from foreign customers' orders.

Regarding Viasystems Mommers B.V., former No. 10 European manufacturer, it occupies 46,000 m2 in Echt. Wil Kregting, former boss of Philips PCB Group (European No. 1 in 1995), to whom Viasystems made a golden bridge in September 1999 to acquire his services, was dismissed in late 2002. One does not need more to feed the rumors.

Vogt-Fuba

Vogt Electronic, which has crossed hard times, is looking for a partner for its subsidiary Fuba, acquired in May 1998. The PCB activity has little varied since this date, in a fork from 125 to 155 M€. The main site, Gittelde ( 17,600 m2 and 924 employees) works in particular on 3D PCBs and on recyclable boards. A smaller factory in Desde (9,000 m2 and 290 persons) notably makes PCBs with thermic drains. Our data do not take into account factories based in Tunisia and India.

Würth

With a turnover oscillating between 66 and 78 M€ for three years, Würth Elektronik GmbH recovered well from the hitch of 1998, which it ended with just 38 M€ in turnover. Its three factories-Niedernhall, RotamSee, and Pforzheim-distinguish themselves in SBU (Sequential Build-Up) and MCM-L (Multi Chip Module - Laminate) production.