Every piece of electronics equipment uses printed circuit boards.
The circuit board industry posted mixed results for the first half of the year. Listed below is a quick snapshot of the global results as well as business trends for consumer electronics.
Taiwan could be considered the manufacturing center for the global consumer electronics industry. The printed circuit industry in Taiwan recorded its first negative growth in 2016 since 2009 (the year of the global recession). There are a couple of reasons for this. First, the personal computer segment, including tablet PCs, continues to shrink in the worldwide market. This not only affects printed circuit manufacturers, but also EMS companies and component suppliers in Taiwan. The second reason for the slowdown can be attributed to the growth rate for smartphones. After years of double-digit growth, it was inevitable that the demand was unsustainable. The smartphone segment continues to grow, but not at double-digit rates.
The Taiwanese electronics industry continued to enjoy growth every year during the past 20 years, except 2009. However, the printed circuit market suffered negative growth each month during 2016. Shipments for the industry were mixed during the first quarter; some months showed increases, some showed negative growth. During 2017, business stabilized during the second quarter, resulting is positive results since May. Taiwanese manufacturers are gearing up for the Christmas holiday. Market analysts predict that Taiwanese PC manufacturers will post positive results even though the global PC market continues to shrink. Business increased during the second quarter, and total revenue for circuit manufacturers have grown month over month since May. These manufacturers are also gearing up for the Christmas sales boom, and monthly revenue for the industry indicates positive growth. July revenue for the rigid circuit segment posted a relatively small growth rate at 1.45%, but the flex circuit segment recorded a double digit growth rate at 26.4%. Flex circuit manufacturers are the major contributor for industry market growth.
Cumulative revenue for the first 7 months was NT$299.6 billion ($9.89 billion), a 2.62% increase compared to the same period of time from last year. Annual revenue for the full year is expected to show 4 to 5% growth over last year.
The Japanese printed circuit industry declined year over year since the global recession in 2009. The industry posted negative results for the first quarter of this year, but showed a small growth during second quarter. Total revenue during the first half of the year was 2,269 million yen ($20.8 million) – a slight growth of 0.2%. However, shipments increased during this same period by 8.4%. So, shipments are up but revenue is down; this translates into lower prices from manufacturers. Unfortunately, reduction in their list prices is necessary to keep current customers and attract new ones. Their core businesses, build-up circuit boards and rigid base module circuits have taken a hit. The majority of their customers for build-up circuits are domestic cellular phone manufacturers, and domestic cellular phone manufacturers are consolidating at a rapid pace. Circuit board manufacturers do not expect an increase in business any time soon. The majority of customers for module circuits are semiconductor device manufacturers. The global semiconductor market has been booming last one year, however, Japanese module circuit manufacturers have been loosing the market share. Module circuit manufacturers are enjoying an increase in business, except for the ones in Japan, who continue to lose market share to their competitors.
Conversely, Japanese manufacturers of double and multilayer flex circuits see business increasing as well as selling price increases. Most of their business is coming from smartphones produced in other countries. A concern is that they have to compete with Taiwanese and Korean manufacturers. Their future is not very promising. Revenue and sales from the Japanese printed circuit industry will remain flat compared with 2016.
The printed circuit industry in North America is fluid, and sales are rebounding moderately. The circuit board manufacturers show increases in orders every month during the first half of the year, but monthly shipments are down month-over-month compared with last year. Cumulative revenue for the first seven months indicates a 4.4% decline, but the book-to-bill ratio is in the positive growth range. I have a pessimistic outlook for the year compared with last year.
Data from the Korean printed circuit industry are not available. Since 2013, the Korean printed circuit industry decreased year-over-year. Manufacturers were hopeful for a good year; however the hiccup with Samsung’s Galaxy Note 7 made this nearly impossible. Samsung released the new smartphone Galaxy Note 8, but it is too soon to tell if this launch will propel the Korean printed circuit industry into positive territory. The German market was up and down all year, but total revenue for the first half indicates a relatively large increase at 10%. This year will be ahead of last year.
In my opinion, the global printed circuit industry will experience moderate growth this year lead by Taiwanese manufacturers. The busy season is fast approaching, and all signs are pointing towards a profitable year.
DKN Research, www.dknresearch.com
DKN Research Newsletter #1726, September 10th, 2017 (English Edition)(Micro Electronics & Packaging)
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Headlines of the Week
1. AGC will build an 11G glass substrate plant (3370mm x 2940mm) in China to catch up the growing market of TFT LC display panels.
2. Iwasaki Electric commercialized a new sunlight irradiation system with xenon light source for aging tests of new materials.
3. JST co-developed a new polishing pad for substrates of SiC and GaN introducing nano-fiber textile with Ritsumeikan University.
4. Taiwan Pucka developed six-layer flex circuits using all screen-printing process for wearable devices. Chip-on-Flex (COF) assembly is also available.
5. Shin-Etsu Chemical will invest 2.4 billion yen to expand manufacturing capacity of silicone rubber in Ohio.
6. NEDO started field tests of large EV bus system in Malaysia, cooperating with Toshiba Infra Systems.
7. Kyocera developed a new small-sized IoT unit with ceramic package for wireless network LPWA.
8. NEC started field testing of the frequency controller to make power source efficiencies higher combining many batteries.
9. Yaskawa rolled out a long arm (2010mm) robot “MOTOMAN-GP23-12” for general industrial usages. It can manage 12kg duty.
10. OKI started an engineering service to analyze the failures of LSI (Large Scale Integrated Circuit) mounted on printed circuit boards.
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