Report: Flex Market Up 9.4% in 2013 Print E-mail
Written by Mike Buetow   
Wednesday, 29 January 2014 15:47

DALLAS -- Global flex circuit board sales reached $11.32 billion in 2013, up 9.4% from 2012, according to new research. Forecasts calls for the market to grow to $12.01 billion in 2014 and $12.69 billion in 2015.

Demand is coming mainly from displays (LCD panels and touch screens), computing (HDD and ODD) and communication (mobile phones). Moreover, flex demand is highly concentrated, with most sales going to a small number of customers.

Computers and related end-products made up 25% of the market, 80% of which was Japanese companies, says RNR Market Research. For mobile phones and tablet PCs, Samsung and Apple purchased more than 50% of the global flex sales to that market, the firm said.

In 2013, the most significant change of the FPCB industry lied in the slumping profit margin of veterans and the soaring profit margin of new entrants. Veterans lagged behind new entrants in equipment and technical R & D strength. After a high starting point and early difficulties, new entrants witnessed a significant increase in profit margin. In addition, the production bases of veterans were mostly located in Mainland China, where RMB appreciation and rising labor costs led to the substantial fall of profits.

Mektron, the world's largest flex maker, suffered its first-ever loss due to contraction of the HDD and ODD markets, pricing pressurem and currency appreciation in and higher labor costs in China, where Mektron produces 45% of its flex output. Mektron increased capacity in Taiwan, and Panasonic has also invested $100 million in building a new flex operation in Taiwan.

Interflex, South Korea's largest flex maker, saw gross margin fall by nearly 50% in 2013 and operating margin plummet from 6.2% to 1.2%. M-Flex also faced losses. Fast-growing companies such as Flexcom and BHflex transferred their main production bases to Vietnam.

Hon Hai Group's Zhen Ding Technology saw profit margins increased on higher orders from Apple. ZDT operates factories in Shenzhen, Qinhuangdao and Huai'an.

Flex circuit makers typically derive about 40% of their revenue from assembly operations.






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