Reports from industry news groups in Taiwan address the possibility of a capacity shortage for Taiwanese circuit board manufacturers in the upcoming fourth quarter.
These announcements are causing anxiety for anyone associated with the industry because business trends for the Taiwanese circuit board manufacturers are recognized as a worldwide barometer for the consumer electronics segment.
Shipments from Taiwanese manufacturers plummeted during the fourth quarter of 2008 by almost 75%. The financial crisis of September 2008 followed by the dreadful fourth quarter drop in business caused everyone in the printed circuits industry in Taiwan to act quickly to keep the ship afloat.
The rebound in sales was quick, and January 2009 showed signs of a recovery. Shipments continued to increase steadily during the second half of the first quarter. This spike in business was not from current product lines, but new gadgets that include netbooks and smartphones. These markets have exploded and created new business avenues for circuit board manufacturers. Taiwanese flexible circuit manufacturers are also busy due to the portable electronics segment.
The growth rate slowed in the latter part of the second quarter, but the Taiwanese circuit board industry is happy with a moderate growth rate during the third quarter.
Market trends suggest a typical year where manufacturers could receive an increase in orders for an anticipated busy Christmas season.
Operations managers are reporting that their manufacturing plants are operating at full capacity due to the influx of new orders.
Unfortunately, market indexes for August reveal more than a 20% decline in volume compared to the same month last year; only the larger industry leading manufacturers are seeing an increase in business.
So, who is riding this wave?
A few large manufacturers that are fortunate enough to have customers associated with netbook and smartphones are the ones who have seen positive growth since August.
Meanwhile, the majority of Taiwanese circuit board manufacturers have experienced negative growth compared to last year. Business for mid-sized manufacturers declined 40% to 60% comparing August 2008 to August 2009, and there are no clear signs that things will bounce back in the near future.
Sales and marketing teams from leading circuit board companies report brisk sales and large-sized orders in their queues for the fourth quarter; however, they are unable to provide a clear business forecast for 2010. Much of their activity is tied to portable electronics sales.
Taiwanese electronics manufacturers are in the hiring mode, assuming increased demand for an upcoming busy season, but management is pulling back the reigns and does not want to expand the workforce too much for fear of another decline in business.
Source: EPT Newsletter, VentureOutsource.com, September 2009
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