We headed to IPC Apex Expo in late January not certain of what to expect. The backdrop, of course, was one of job upheaval. Blue chip tech companies were announcing large-scale layoffs, and the “disengagement” counts were starting to accumulate in striking fashion. To wit:

• HP: 4,000 to 6,000
• Dell: 6,650
• Google: 12,000
• IBM: 3,900
• Meta: 11,000
• Microsoft: 10,000
• Twitter: Everyone except Elon Musk and a couple of engineers brought over from Tesla*

This wasn’t wholly unexpected. Inflation, while trending down, remains stubbornly higher than pre-Covid levels. Fourth quarter sales slowed at many firms. The cost of money has ticked up for months. Companies have been hiring like mad for several years and what goes up – or in this case, out – eventually comes down, or in, at least somewhat.

Nevertheless, some of this seemed proactive, a rebalancing coupled with expectations that growth would abate in the coming year.

Then we hit the ground in San Diego and what we heard blew that thinking all up.

Exhibitor after exhibitor told us that coming off double-digit gains in 2022, they expected growth this year to slow. But their customers, they added, hadn’t received the message. Every equipment supplier we spoke with – and we spoke with almost all of them – said their order books are ahead of forecast, in some cases tremendously so. And every equipment supplier said they now expect 2023 to be a strong growth year.

Now, that doesn’t mean some won’t feel slowdowns. Some in the bare board industry are paring their operations and staffing, and a few larger EMS companies are trimming here and there. As noted in Market Watch this month, TPCA expects a 4% drop in printed circuit board output this year, and IPC’s latest book-to-bills for the PCB and EMS sectors both note falling orders in the December period. (Some of the latter can be explained by changes in OEM buying patterns, which were extended from a typical six-month forecast to as many as 18 months during Covid, and are now retreating to more traditional levels.)

Still, I don’t expect a repeat of 2001-05, when the dot-com crash precipitated the big tech version of the Cretaceous-Tertiary extinction, where 25% of the workforce was sent packing. And I believe the issue this time resides more with an overload of software engineers and non-product related staff, versus hardware and manufacturing personnel.

The cost of durables, especially autos, will subside, and after a painful year for smartphone and PC device manufacturers, discounts for consumers may be ahead, spurring demand – and supply chain orders.

I think the glass is more than half-full.

*This is, of course, exaggeration. But give it time.

P.S. Looking for some first-hand input on the industry? Register now for PCB East, the electronics industry technical conference and exhibition for the East Coast. Coming May 9-12 (exhibition is May 10) to the Boston suburbs (pcbeast.com).

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