The Japanese Ministry of Economy, Trading and Industry (METI) released March’s production data results for the Japanese printed circuit industry.
Business for the printed circuit industry in most global markets continues a downward slide that began during fourth quarter of 2008. Shaky consumer confidence, credit tightening from lenders, and increasing unemployment are contributing factors for lackluster sales in the industry.
However, the Taiwanese printed wiring board (PWB) industry is bucking this trend.
Since February, there has been a flurry of activity attributed to the steady growth of netbooks, the continuous upgrades to smart phones and new consumer demands in China inspired by government stimulus programs. Korean PWB markets are also digging themselves out of the hole thanks to strong export sales for cellular phones.
Japan seems to be the only one without a prom date.
The questions are how will the Japanese PWB industry rebound, and when will it happen?
Total shipments during March for the PWB industry were 43.43 billion yen, representing a 22% increase from the previous month, and the first month to post positive growth since last September (unfortunately, this is a 46.5% decline from the same month in 2008).
Volume production during March came in at 1.021 million square meters, an increase of 8.2%, but a 50.3% decrease compared to the same month last year.
This data suggests average unit selling prices are increasing.
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Year-to-date shipment totals equal 117 billion yen, a 49.9% decline compared to the same period last year. An increase in shipments for 2009 over last year may by out of reach.
The numbers tell the story
Business within the Japanese printed circuit market is still slow and manufacturers are shifting business to high-end products from low-end products.
Multi-layer circuit boards constructed by the build-up process (+31%) and rigid substrate modules (+48.4%) posted the strongest rebound during March.
Double and multi-layer flexible circuits (+27.4%) had the second strongest showing, and 4 layer to 8 layer rigid boards increased by double digits during the same period.
The growth from single-side rigid boards and single-side flexible circuits was just over 10%.
Chip-on-film (COF) substrates used in display devices had the smallest growth coming in at +3% for the same period.
Going forward, Japanese printed circuit manufacturers are not sure where business will come from to keep the momentum going.
Japanese management teams are not too optimistic even though March looked like a good month, and most believe market demand for printed circuits bottomed out in February.
Unfortunately, there is no predominant electronics application to generate a large amount of demand for printed circuits over the next few months. This is contrary to the printed circuit industries in Taiwan and Korea.
Material and component projections from circuit manufacturers point to an increase in activity over the next few months. Their estimates are based on low inventory levels in customer warehouses due to a drop in product ordering during a very slow February.
These purchasing agents are now replenishing their pipelines with small orders of materials and components to maintain minimum production levels. Most of this business stems from applications for industrial equipment and entertainment electronics such as ‘pachinko games’. If their barometers are correct, there is not enough business to generate large orders and keep printed circuit manufacturers fat and happy for the remainder of the year.
Meanwhile, demands for printed circuits in Japan should continue it’s up and down cycle over the next few months.
The printed circuits ‘material’ segment in Japan is having a better year.
Since Japanese material suppliers have the edge over their Asian counterparts, they can expect more business from Taiwan, Korea and China. Several material manufacturing companies are back to full operations.
The bottom line is the future for the global printed circuit industry remains unclear, and my crystal ball is still foggy.
This is a good time to visit the JPCA Show 2009 next week and gather the latest business information from manufacturers, suppliers, and engineers who represent markets throughout the world.
Source: EPT Newsletter, VentureOutsource.com, May 2009
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