Large PCB investments in Japan take the front seat.
Sangyo Times recently released a news report outlining the
investment activities for PCB and IC substrate manufacturers in Japan.
The report listed 21 companies as major investors for projects in the
industry, and also announced that the majority of investments would be
used to increase the manufacturing capacity of IC substrates and their
raw materials.
NTK, a large manufacturer of ceramic and organic substrates, will
invest more than 30 billion yen (US$1.00 = 116 yen) over the next two
years to build the 14th Japanese manufacturing plant for organic IC
substrates. Seven more companies, including TCP substrate
manufacturers, budgeted more than 10 billion yen class investment plans
for the next two years.
The report also stated that IC substrate manufacturers expected more
growth and demand for MPU devices used in portable products such as
laptop PCs, cellular phones and MP3 products. Flexible substrate and
tape manufacturers such as Mitsui Metal Smelting and Casio Micronics
also expected more growth and demand for chip-on-film (COF) substrates
used for the driver modules of flat panel displays, especially large
size LCD TVs. Nitto Denko, one of the major flexible substrate
manufacturers in Japan, budgeted over 10 billion yen for a "carrier
flex" process targeting the display and disc drive market. Material
suppliers, including base materials and copper foils, are also planning
relatively large investments since they forecasted higher than expected
demand.
It could be true that the IC substrate and COF markets will grow
over the long term; however, demands fluctuate sporadically and over a
short period of time. This could lead to supply outweighing demand in
the market. This is especially true for flexible laminate materials. I
predict an unbalance between supply and demand because too many
suppliers entered the market during the last two years, and because
total supply capacity for manufacturers is much higher than the
practical demands forecasted.
A critical point to analyze is the manufacturers' projected costs
and falling prices relative to their investment plans. Currently,
flexible laminates are working on relatively large margins. These
margins will be squeezed in the near future as selling prices fall for
COF substrates due to the business strategies of consumer electronics
companies in Japan and Korea. Several material suppliers do not
consider falling prices when formulating their investment plans, and
probably, some of them would not be able to survive a price war with
their competitors.
Headlines
Denki Kagaku, a material supplier in Japan, will begin volume
production of packaging materials for electronics components in China.
Kuraray, on the other hand, has decided to close its business of screen
materials for rear projection TVs.
Electronics company Kyocera has commercialized a new LCD series with
LED backlights for industrial use instead of CCFL. Meanwhile, Hitachi
Displays will begin to export LCD modules for European customers in
automobile applications.
Dai Nippon Printing will install a manufacturing line of color
filters for LCD devices with ink jet printing system in the Kameyama
Plant of Sharp.
Material supplier Mitsubishi Gas Chemical has developed a new
transparent polyimide film for optical device applications, and MEC, a
chemicals supplier for PCB processes, will invest 1.2 billion yen in a
new plant in Taiwan for PKG substrate manufacturers. It is scheduled to
begin operation in April 2007.
Noritake Co., a ceramic material and equipment supplier in Japan,
has rolled out a new conveyer furnace for the LTCC substrates. The new
furnace is said to simplify the firing process and reduce manufacturing
costs.
Component supplier Omron has commercialized a new circular type
waterproof connector for sensor and actuator modules with cables that
are said to reduce connection time significantly. The company also
acquired Pioneer Precision in order to expand the manufacturing
capacity of backlight modules for small LCD devices. Concurrently,
Sumitomo Rubber withdrew from the LCD backlight business. The
manufacturing facility and employees will transfer to NEC LCD
Technology.
Sumitomo Chemical will build a new manufacturing plant in Poland for
optical films designed for LCD devices. It will begin operating in the
summer of 2007. Showa Denko, a chemical company in Japan, completed
construction of its R&D center in Ichihara, Chiba for next
generation hard discs.
Dominique Numakura is president of DKN Research; This email address is being protected from spambots. You need JavaScript enabled to view it..
