The Ministry of Economy, Trade & Industry (METI) released the August production data from Japan.
Let’s look how they did during the Covid-19 pandemic.
Shipments during the first half of the year did not follow typical trends. Although the pandemic was in full swing by mid-March, the first month of the year was uneventful. January’s revenue was off by 0.8% compared to the same month last year, but volume decreased 14% over the same time period. Volume was down, but revenue is up! The average unit price increase was a glimmer of light for the industry.
The next couple months were even better than January. Revenue jumped 20% during February and March! The majority of the increase came from build-up rigid multilayer boards. The timing of this spike paralleled with the pandemic spike in China. An increase in sales of smartphones and other hardware increased during the work-from-home transition. The supply chain in China was in disarray, and alternative suppliers and manufacturers were sought for procurement of key components and printed circuits. Some business shifted to Japanese manufacturers because of their technical capabilities. Even though their prices were higher than their Chinese counterparts, Japanese manufacturers were still operating and negotiating prices was not possible. Japanese manufacturers enjoyed an increase in business at their usual margins.
Things were good during the first half of the year. The supply chain in China was quickly brought back online and Japanese manufacturing saw a significant drop in business during August. Historically, business falls off during August and rebounds during September. Not sure what this year will look like.
The flexible circuits segment remains under pressure. Shipments during August declined 34.6% and revenue declined 36.7%. The majority of customers for Japanese flex circuit manufacturers are foreign mobile companies. They are now using other manufacturers from Taiwan and Korea. This trend will not change for Japanese vendors if there is no significant change in business circumstances.
Business trends from the module circuits segment is different depending on products types. Rigid module circuits are showing a small positive growth each month. Unfortunately, the market share for Japanese manufacturers is small in the global market. The market in Japan is not proportionate with the shipment of semiconductor substrates. The other module circuits that includes tape circuits declined significantly during the first half of the year. This is probably attributed to spot demand from a specific application.
Overall, the market continues to decline for the Japanese printed circuit industry. I am optimistic that new ideas and manufacturing enhancements will elevate Japanese manufacturers and create new avenues of revenue streams.
DKN Research, www.dknresearch.com
DKN Research Newsletter #2030, November 1, 2020 (English Edition) (Micro Electronics & Packaging)
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Headlines of the Week
1. Fuji Research (Market research firm in Japan) changed its forecast for power semiconductors in 2020. The global forecast has declined from 3.9% to -8.5% because of Covid-19.
2. TSMC (Major semiconductor manufacturer in Taiwan) expects 30% growth in 2020 even though it has lost the business of Huawei. HPC (High Performance Computing) will fill the loss of smartphones.
3. AIST (Major R&D organization in Japan) codeveloped photovoltaic cells based on crystal silicon with thin electrode of titanium oxide. The new cells have a higher than 20% conversion rate.
4. Fujikura (Major flex circuit manufacturer in Japan) commercialized a new PAAM (Phased Array Antenna Module) with self-developed RF IC for millimeter wave band of 5G telecommunication systems.
5. Renesas Electronics (Major semiconductor manufacturer in Japan) started volume production of new microprocessor, “RA6T1,” for motor control produced by 40nm technology. Package: LQFP 10 x 10 mm. 64 pins.
6. Yano Research (Market research firm in Japan) released a market research report about ADAS of the automobiles. The global market will be double over the next five years to 2.46 trillion yen.
7. TIT (Technical college in Japan) has been developing wireless 5G telecommunication systems with millimeter wave band assuming to apply small satellites.
8. Sanken Electric (Major device manufacturer in Japan) will codevelop high performance intelligent power modules (IPM) with ST Microelectronics for industrial and automobile applications.
9. Toshiba Device & Storage (Device manufacturer in Japan) rolled out a 3.5" HDD “MG08-D Series”. Capacities: 4T, 6T and 8T Bites. Data transferring: 256 MB/sec.
10. Torex Semiconductor (Device manufacturer in Japan) commercialized two new small size regulator ICs for all solid-state lithium ion batteries. Package sizes: 0.9 x 1.2 x 0.4 mm and 1.5 x 1.8 x 0.33 mm.
11. Murata (Major device manufacturer in Japan) updated its financial forecast for March 2021. Revenue increased 60 billion yen, to 1.49 trillion yen. Net profit increase 39 billion yen, to 189 billion yen. Covid-19 has had a positive effect for the business.