Consumer product shipments in Japan declined in December and January and revenues for PCBs have shrunk month to month since November.
Typically, the first two months of the year are sluggish for the Asian electronics industry. The Japanese industry is usually the exception to the slow season, due in part to the long Chinese New Year vacation. However, this year industry dynamics suggest an interruption to this pattern or history of growth compared to an average year.
Most barometers measuring the consumer electronics market have signaled slight declines since the fourth quarter of 2006. Since seasonal slumps occur after the Christmas blitz and Chinese New Year vacation, a downward trend was not interpreted as anything out of the norm at first. Unfortunately, consumer product shipments and discrete devices in Japan declined in December and January. Revenues for Japanese rigid circuit boards and flexible circuit manufacturers have shrunk month to month since November. Shipments for IC module substrates grew steadily during the second half of 2006; however, January numbers came in weaker than expected.
Global shipments for the semiconductor industry declined during December and January, which could be blamed on typical seasonal fluctuation. However, an unexpected plunge in shipments was reported in February. Asian countries, excluding Japan, suffered the steepest loss. Their total global share in the semiconductor market is almost 50%, and their contribution to the industry is considerable.
The release of Microsoft’s new operating system, Vista, had a rippling effect on Taiwanese PC, motherboard and PCB manufacturers since the last quarter of 2006. Slowing sales could be blamed on consumers not purchasing personal computers before the release of Vista. Manufacturers predicted a bounce in January sales after its release; unfortunately, the boom in sales lasted only one week. Since Vista is not a very attractive product for most home or office PC users, it is not the lightening rod PC or PCB manufacturers needed after a slow season.
Taiwanese shipments of PCB and flex circuits dropped significantly in February after posting negligible declines for both December and January.
In March, Motorola, the second largest cellular phone manufacturer in the world, reported a quarterly loss for the first quarter of 2007. Sales for their new low-cost cellular phones were lower than forecasted. Prior to the release of first quarter data, Motorola scaled back orders to assembling subcontractors and parts suppliers in an effort to manage excessive inventories throughout the distribution pipeline. This pull back was another contributing factor for the February slowdown in the consumer electronics segment.
Usually, the Asian consumer electronics market rebounds in March. Data analysis from this segment will be scrutinized, and we should be able to determine if the slow season is short lived, or the beginning of a long slump.
Headlines
Japanese electronics company NEC developed a coating process of carbon nanotube materials to generate transistors. Sumitomo Electric will begin volume production of high temperature super conductive cables with 180 A-class capacity by the end of June.
Electronics material supplier Denka developed a new heat conductive adhesive material with acrylic base resin for the insulation and protection of electronic components.
Fujitsu will increase its engineers in India to 10,000 from 3,000 to expand the R&D capabilities of computer system software. Taiyo Industrial founded a new subsidiary in Thailand for marketing and technical services for Japanese customers in Southeast Asian countries.
Panasonic Opto Device, a Japanese component manufacturer, developed a new white color power LED on GaN substrate with flip chip mounting. Taiyo Yuden, another component supplier in Japan, plans to increase the manufacturing capacity of its ceramic chip capacitance devices 20% in 2007 to cover booming demands.
Sumitomo Chemical will invest 370 billion yen over the next three years to increase the manufacturing capacities of optical films and petrochemical products. Sekisui Chemical will invest 2 billion yen to increase the manufacturing capacity of protection films for optical devices by 50%. Kaneka, another chemical company in Japan, will increase the manufacturing capacity of solar cells formed by thin film technologies to 55 million W from 30 million W per year.
Japanese PCB manufacturer CMK increased Q3 revenue 8% from the same month of 2005 to 95.6 billion yen. Automobile application led the surge.
Korean market research firm Displaybank forecasted US$12.2 billion as the global market size of flexible displays by 2017. PCD&M
Dominique Numakura is president of DKN Research; This email address is being protected from spambots. You need JavaScript enabled to view it..
