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![](https://iconnect007.com/application/files/6316/3125/2012/Dom_Numakura-300.jpg)
Taiwan: The Barometer for Consumer Electronics
The Tankan Survey is a popular economic survey of Japanese businesses issued by the central bank of Japan. The report is released four times a year, in April, July, October, and December. The survey focuses on companies with a specified minimum amount of capital and is a valuable tool to determine market trends. One drawback to this survey is the age of the data. Since the report is released quarterly, the marketing data is already four months old—and a lot can happen in a quarter. Another drawback is that the data is inclusive of Japanese businesses only; it does not give a snapshot of global markets. For these reasons, the Purchasing Manager Index (PMI) and the Book-to-Bill Ratio (BB Ratio) have become very popular indices to predict future market trends. Data is released monthly, but there are wide gaps between purchasing plans and sales budgets for manufacturing companies. For this reason, we must be very analytical when referencing both these indexes.
My personal preference to measure sales and predict future trends is the actual shipments of printed circuits from manufacturers in Taiwan. Taiwan has become a manufacturing center for the global consumer electronics industry. More than 90% of personal computers are manufactured by Taiwanese companies, and almost 100% of game consoles are assembled here. Apple’s products are all manufactured by EMS and OEM companies in Taiwan. The Taiwanese manufacturers outsource many parts to overseas plants, mostly from mainland China.
Taiwanese electronics manufacturers purchase most of their printed circuits from Taiwanese companies. Circuit manufacturers have large manufacturing capacities in China. It is important to note that these overseas productions are included in shipment data for Taiwan. Publicly traded companies in Taiwan release earnings on a monthly basis, and there are 40 publicly traded companies that derive income from producing printed circuits. Eight of them are flex circuit manufacturers and I estimate the total revenue for these 40 manufacturers represents more than 80% of the Taiwanese production. Printed circuits are custom designed products, so these manufacturers produce products based on purchase orders or accurate forecasts provided by their customers. This is the reason I review revenue data from these publicly traded companies every month. Revenue data is also valuable to forecast business trends. These manufacturers provide their shareholders guidance that includes progress from prototype production and production schedules from large customers.
Total revenue from Taiwanese circuit manufacturers is usually steady and grows year over year. Revenues drop sharply in February because of the long vacation from the Chinese New Year, but it returns to normal levels and grows throughout the fourth quarter. However, this year’s revenue trend is different. The sharp drop in February was there, but the rebound in March was smaller than expected. Revenue declined in April and May, and is negative compared to the same months last year. Sales from flex circuits are higher than rigid boards because of the strong demands from smart phones (flex circuit sales are higher this month compared to the same month last year). Revenue from rigid boards are posting a double digit decline compared to the same month last year.
Equipment manufacturers and printed circuit manufacturers released pessimistic forecasts for the second half of the year. They blame their pessimism on slow sales from personal computers, and they expect a negative growth from tablet PCs this year. I mentioned earlier that the business trends for the printed circuit industry in Taiwan represents the global market trends for consumer electronics. For this reason, I do not have an optimistic outlook for the consumer electronics industry this year. Hopefully, there will be a turnaround over the next few months. I will keep you posted on business trends in Taiwan.
To read back issues of the newsletter, click here
Headlines of the Week
1. Mitsubishi Plastic (major plastic supplier in Japan) 7/17
Has completed the construction of the sunshine vegetable plant in Australia with 5000 square meter spaces. It will start the operation during the coming fall.
2. Yamagata University (Japan) 7/21
Has developed a new white color phosphorescence tandem organic EL device using a multilayer printing process.
3. Rohm (major device manufacturer in Japan) 7/23
Has completed the acquisition of Powervation Ltd., a semiconductor company in Ireland. Rohm plans to expand the business of digital power source controllers.
4. TIT (Tokyo Institute of Technology in Japan) 7/23
Has developed a new platinum catalyst with 20 times higher activity than traditional Pt/Carbon catalyst for fuel cells. It will reduce the consumption of platinum significantly.
5. SMK (major device supplier in Japan) 7/23
Has commercialized a new SMT type push switch “HCF Series” with clear click touch. It measures 3.5 x 3.0 1.85 mm.
6. Hitachi Metals (major metal supplier in Japan) 7/23
Has launched a rare earth recycling business of waste materials produced by manufacturing Nd-Fe-B magnets.
7. Yamaha (major equipment supplier in Japan) 7/27
Has commercialized a new robot driver series, RDV-X and RDV-P. They reduce space and positioning time significantly.
8. Tohoku University (Japan) 7/27
Has successfully made the world’s first ultra-thin single crystal layer of high dielectric material. It will be valuable for generating ultra-high density memory.
9. Seiko Instrument (major device supplier in Japan) 7/29
Has commercialized a new small double layer chip capacitor, up to 402 farads, which is now available for SMT assembly processes. Size: 10.0 x 8.0 x 1.9 mm.
10. Taiyo Yuden (major device supplier in Japan) 7/30
Has unveiled a new small size wireless module, WYSAAVDXB, with dual-band antenna for 2.4 GHz/5GHz for industrial equipment. Size: 30 x 15 x 2.45 mm.
To read the full articles, click here.
To reach Dominique K. Numakura, visit www.dknresearchllc.com or email dnumakura@dknresearch.com.
More Columns from EPTE Newsletter
EPTE Newsletter: Travel to Japan During COVIDEPTE Newsletter: A New COVID Surge in Taiwan?
EPTE Newsletter: COVID-19 PCR Test in Japan
EPTE Newsletter: Japan Failing in Vaccine Distribution
EPTE Newsletter: A Long Trip to the U.S.
EPTE Newsletter: Ten Years After Fukushima
EPTE Newsletter: Taiwan Releases 2020 PCB Production Numbers
EPTE Newsletter: The Printed Circuit Industry in China