The circuit board industry in Japan seems to be on life support.

This newsletter is the last in a three-part series that details my observations from the 42nd International Electronic Circuits Exhibition held at the Tokyo Big Sight in Japan June 13 through June 15. The show was larger than last year’s show and attracted more visitors. Most of the technical seminars were very popular; however, the presentations were not very exciting. Most of the audience members were not engaged, and the atmosphere was almost dull.

I interviewed many people affiliated with the Japanese electronics industry that included company owners and senior executives from mid sized companies. They are all veterans in the Japanese PWB industry and are proud of their careers they built over many years. Every one of them had similar comments and opinions about market trends and the direction the industry is heading. They are not very optimistic about the future of the PWB industry in Japan, and feel the industry has been in a nosedive for quite some time.

Most of the business for Japanese PWB manufacturers comes from electronics companies in Japan. The Japanese customers preferred to use “made in Japan” products because of their superior technology and quality. However, business has shifted overseas and these Japanese electronics companies are losing their position in the global market.  Japanese electronics manufacturers can save a lot of money by using manufacturers in other countries. It is now common for them to outsource the entire manufacturing to OEM and EMS companies in Taiwan and Korea. This means there is no businesses for Japanese PWB manufacturers. Their advantage of higher technologies and superior quality is no longer a factor because Taiwanese and Korean PWB manufacturers can now supply equivalent products compared to Japanese manufacturers. Unfortunately, not even the industry veterans have an answer to this problem.

There was a teardown demonstration during the show that was very popular. The staff that presented this demonstration was mostly young researchers and engineers from circuit manufacturers and material suppliers. They were very knowledgeable with packaging and wiring technologies in consumer electronics such as smart phones, tablet PC and flat panel TVs. Unfortunately, no one in the audience could find any business opportunities from the teardown demonstration because the majority of the electronic products were assembled in Taiwan or Korea.

One of my business associates from Japan muttered that the business climate is similar to the PWB industry crash in North America when the IT bubble burst in 2001. During the show the Ministry of Economy, Trade and Industry (METI) released the April production data for the Japanese PWB industry. The data indicate a significant decline during April compared to the previous month.  The decline affects some major products such as buildup multilayer boards and rigid IC substrates.  Year to-date shipments shows a negative growth compared to the same time last year. The circuit board industry in Japan seems to be on life support.  

Dominique K. Numakura
DKN Research, www.dknresearch.com

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Headlines of the week
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1. Ushio (Major equipment supplier in Japan) 7/9
Has rolled out new large area size stepper “UX7-3DiLFS200” with a shot size of 50 mm square for 2.5D/3D packages.

2. AIST (Independent R&D organization in Japan) 7/12
Has developed a new hybrid process of screen-printing and injection molding as the low cost manufacturing technology for various MEMS devices.

3. Kanazawa University (Japan) 7/11
Has developed a new power generation device using iron/gallium alloy. The new device generates electric power from small vibrations.

4. Panasonic (Major electronics company in Japan) 7/12
Has terminated the production of lighting bulbs. It is half year earlier than original schedule because of a quicker market trends.

5. Hitachi Cable (Major cable manufacturer in Japan) 7/13
Has decided to close its manufacturing subsidiary in Singapore by the end of this year. The subsidiary is producing lead frames and electronics wires.

6. Asahi Glass (Major glass material supplier in Japan) 7/12
Has co-developed the world smallest vibration power generation module introducing a new amorphous fluorinated resin.

7. Panasonic (Major electronics company in Japan) 7/16
Has started volume production of lithium ion batteries for consumer use in the new plant in Suzhou, China.

8. P3CR Promotion Association (Public organization in Japan) 7/17
Japanese PC manufacturers have recycled 851,000 units of personal computers in 2011. It is 3.1% increase from previous year.

9. SEAJ (Industry organization in Japan) 7/19
June B/B ratio of the FPD manufacturing equipment in Japan went up to 0.77. Shipping was flat, but incoming order increased 40% from previous month.

10. Giantplus (Display panel manufacturer in Taiwan) 7/20
Has been increasing the margin of the sales by shifting the market from consumer to business and industrial use.

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DKN Research Newsletter
#1224, July 22, 2012 (English Edition)
Electronic Packaging Industry News from Japan & Asia
(www.dknresearchllc.com)