The Japanese Ministry of Economy, Trading and Industry (METI) released the Printed Wiring Board production data for June. Taiwan, Germany, North American, China, Korea and other countries also released their data.
Listed below is a recap of the PWB production data for the first half of 2014.
June PWB shipments in Japan rebounded remarkably. Revenue came in at 40.67 billion yen, representing a 5.8% increase from the previous month, while volume reached 1.143 million square meters, representing a 4.8% increase from the previous month. Revenue and shipped volume posted a record month so far for 2014. However, when we drill down and compare these levels to the same month last year, volume grew 7.8%, but the revenue declined 1.9%. This tells us that volume targets were reached due to price cuts. These trends are typical with build-up type multilayer rigid boards; the core products produced from the Japanese PWB industry. Volume increased 8.6% from the same month of the previous year, but revenue has declined 4.1%. This reflects a 12% price drop during the past 12 months. The majority of the circuits are earmarked for cellular phones from domestic manufacturers, and PWB manufacturers are forced to cut prices to remain competitive in this limited market.
The gap between revenue and volume is larger when looking at double side and multi-layer flexible circuits - another core product from the Japanese PWB industry. Volume increased 6.2% but revenue dropped 27.4% when comparing month to month from the previous year. Selling prices dropped more than 33% in just a year. The primary customers for circuits are the foreign manufacturers of smart phones and tablet PCs. Japanese manufacturers are in the midst of a price war with their Taiwanese and Chinese competitors.
The module circuits or semiconductor substrates posted a growth in revenue and shipments over the last two months. Their primary customers are overseas packaging firms.
Reviewing the first half of 2014, the cumulated revenue total was just north of 230 billion yen -- this is a 1.2% decline when comparing year-over-year. Unfortunately, there are no signs of a rebound in sight for the domestic electronics industry, and we are not predicting a better year than 2013, which was the worst since 2008.
Taiwan reported NT$194 billion in revenue for the first half, a 7.49% increase over the same period last year. Flex circuit manufacturers posted double-digit growth, coming in at almost 20%. Circuit manufacturers continue to receive increased orders during the second half of the year, so Taiwan should enjoy double-digit growth for 2014.
The electronics industry in North America rebounded during the second quarter; however, the cumulative PWB shipments for the first half came in at a 0.3% decline year-over-year. This year will probably remain flat.
The PWB industry in Germany posted a 3.2% growth rate for the first half of the year. The manufacturers received increased orders during the second quarter. Business is extremely choppy in Germany, so it is difficult to forecast sales; however, we should not expect a growth of more than 5% for the year.
Unfortunately, I do not have the numerical data from the Korean PWB industry. First, a recap: Samsung Electronics, the largest customer for the PWB industry in Korea, is facing stiff price competition from new Chinese manufacturers. The Galaxy line, the flagship products for Samsung continues to lose worldwide market share. So, when Samsung sneezes, the Korean circuit board manufacturers catch colds. The competition is forcing lower prices and volume shrinkage from the overseas production in Vietnam or China. We do not forecast positive growth performance from the domestic PWB market in Korea.
The global PWB industry will post double-digit gains in 2014. Taiwan and China will remain the top dogs in the global market. Other markets that include Japan, North America, Western Europe and Korea will remain flat for the year.
DKN Research, www.dknresearchllc.com
DKN Research Newsletter #1424, Aug. 31, 2014 (English Edition) (Micro Electronics & Packaging, www.dknresearchllc.com)
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Headlines of the Week
1. Sumitomo Electric developed an ultra small size wireless power supply module for wearable devices replacing wired coils by flexible circuits. Thickness: 0.25mm.
2. Mitsubishi Heavy Industry started room temperature wafer bonding service for 3D devices such as MEMS and biosensors. It covers various wafers other than silicon.
3. OKI Group commercialized a new large-scale screen mask washer capable up to 1400mm square for manufacturing processes of FPD, touch screen, PWB, etc.
4. Fujitsu Group will start operation of Akisai Vegetable Plant, a 100% closed agriculture pilot plant in Aizuwakamatsu.
5. Komori unveiled a new high-resolution gravure offset printer for the manufacturing process of touch panel screen. It is capable for 30 micron L/S and 5 micron mesh.
6. Toshiba started the pilot plant operation of the binary generation system consisting of wind power, solar energy and biomass.
7. ASE agreed to codevelop new MEMS devices with Bosch using wafer level packaging. They already developed the world smallest acceleration sensor.
8. Tohoku University codeveloped an all-solid state lithium-sulfur secondary battery with Mitsubishi Gas Chemical. It will have extremely high energy density.
9. Tokyo University developed the first pure organic material that changes electric conductivity and magnetism same time. It could generate new switching devices.
10. TDK developed a reliable piezo actuator with 75% electric/mechanical coupling coefficients for automobile applications. It works high temperature up to 170C.
11. Mitsubishi Material developed a fluorine recycling process for electrolytic solutions of lithium ion batteries.