In Q3 FY 07, global electronic equipment sales rose 12 percent (Chart 1). Not bad! However, production was flat in North America, Europe, and Japan, with most of the growth in Southeast Asia.

In Q4 FY 07, the negative impact of the housing/financial mess and rising energy prices began to take effect. Higher gasoline tabs, rising adjustable rate mortgage payments, foreclosures and declining home prices, less available consumer credit, and then stock market instability and plummeting consumer confidence are combining to cool consumer (and then business) spending. Curtailed consumer spending in the U.S. could have a negative international affect by lowering global electronic food chain demand. December 2007 holiday electronics purchases may suffer significantly… or, alternatively, consumers may embark on a year-end buying spree—while they still have cash or can get credit. We’ll see!

Chart 2

I realize that this is not a very upbeat scenario, but there is certainly reason for caution moving into 2008. On this sober thought, here’s what else is new.

October North America electronic equipment orders dropped

8 percent versus September, although shipments (a trailing indicator) continued to rise (Chart 2). The major bookings culprit was U.S. communication equipment. In Europe there were signs of a slowdown already in the third quarter as electronic equipment production dipped slightly in September and distributor shipments of semiconductors flattened (Chart 3).

Global wafer fab utilization (Chart 4) hovered just below 90 percent in Q3 FY 07. Factory utilization values above 90 percent typically trigger increased semi spending to boost capacity. However, DRAM makers have just aggressively added capacity. With falling memory chip prices/margins, 2008 is expected to see a slowdown in semiconductor capital equipment purchases (Chart 5).

For 2007, global PCB production is expected to grow about 7 percent to USD 51 billion (Chart 6). However, only Southeast Asia will significantly contribute to this 7 percent increase and currency effects (weak dollar) amplify the 2007 estimate. When stronger foreign currencies are restated as weakening the U.S. dollar, the apparent dollar value increases.

Carefully watch inventories, validate new orders, and scrutinize spending. In a flat year, growth must come from new products and increased market share!

PCB Fabrication

Enlarge this picture Chart 3

Artetch Circuits, U.K., appointed Peter Fuller northern area sales manager.

Aspocomp:
•    Named Isto Hantila CEO after Maija-Liisa Friman resigned;
•    Restructured its debt with Finnish bank creditors; and
•    Sold off 80 percent of its Chinese and Indian units and some equipment from its Salo, Finland, plant to a newly formed joint venture with Meadville for EUR 61 million.

Brandner purchased new PCB equipment to expand HDI capacity.

Circuit West leased an 18,800 ft² manufacturing facility in Colorado after a fire displaced it from its former location.

Enlarge this picture Chart 4

Civa (Norwegian-based PCB broker) became a representative for Teltex (Swedish-based PCB manufacturer) products in Norway and Denmark.

Coretec installed a Gemini-X system at its Denver, Colo., facility.

Elektrotryck (Swedish PCB maker) filed for bankruptcy.

Endicott Interconnect Technologies purchased four more Schmoll Maschinen MX-1 XXL drilling machines from Bürkle North America’s FabFour Group.

Firan Technology Group achieved Nadcap accreditation at its FTG Circuits site in Toronto.

Fuba expanded its multilayer-press capacity at its Dresden plant with an Adara 52-press-system, Monolampress, Indubond 130, and two INSPIRE-AOI-inspection systems.

Hadco’s former president and CEO Andrew Lietz received the BIA Lifetime Achievement Award. Congratulations Andy!

Huco Lightronic is closing its Limavady, Ireland, PCB plant in January 2008.

Imbera Electronics (owned 50/50 by Aspocomp Group Oyj and Elcoteq Network Oyj) appointed Jeff Baloun CEO.

Innovex received a non-compliance letter from NASDAQ regarding its company’s stock falling below USD 1.00 per share minimum.

Kinsus Interconnect Technology will start volume production for high-end handset IC substrate/PCBs at its new plant in Suzhou, China, in 2008.

Meiko Electronics expanded the design plans at its Vietnam plant by 60 percent to100,000 m2 per month of flex capacity and 150,000 m2 of multilayer and build-up board capacity.

M-Wave received a notice of non-compliance from NASDAQ for not maintaining a minimum of USD 2.5 million in stockholders’ equity.

Schweizer Electronic purchased three Discovery 8 HR AOI systems from Orbotech.

Unimicron is spending USD 200 million to expand PCB capacity in China.

Winonics/Cosmotronics appointed Harvey “Sonny” Dorren senior vice president of sales and marketing.

Materials and Process Equipment

Agilent Technologies introduced its Medalist sj5000 AOI System at Productronica.

AL Electronic appointed Göran Wikström CEO.

Altium added 3D PCB capability to Altium Designer.

Armistead Technologies launched an online PCB reverse engineering cost calculator.

Assembléon established Assem Rus as its exclusive Russian distributer.       

Asymtek introduced its next-generation conformal coating platform, the Select Coat SL-940E.

BASF opened its new Electronics Materials Center Europe in Ludwigshafen, Germany.

CCI EUROLAM renewed an agreement with Isola, which allows it to continue distributing Isola’s products within the European market.

Digitaltest GmbH introduced a Digitizer, a CAD-less Design System.

ElektronikGruppen acquired PC Trading (Denmark) A/S and its subsidiary LaserCut ApS.

Emerson & Cuming and Acheson Electronic Materials consolidated operations and moved sales, marketing, and R&D functions to Billerica, Mass.

ESI received:
•    Multisystem orders for 2100 TFOS laser-trimming systems from a leading North American IC manufacturer; and
•    An order for Multiple ESI 3550 test systems from a major Korean MLCC manufacturer.
    Ferro combined several sub-business units into a newly formed Electronic Packaging Materials unit.

Enlarge this picture Chart 5

Henkel expanded its R&D and applications laboratory at its Hempstead, U.K., facility.

HMS Höllmüller:
•    Opened its new 2.500 m² factory in Lodz, Poland, on December 15th, 2007; and
•    Unveiled ComTech, a new Develop-Etch-Strip machine.
    Impact Coatings introduced MaxPhase, “a cost-effective replacement for electroplated gold on electrical contacts.”

Kester reorganized into three entrepreneurial business units: Metals & Chemicals, Solder Paste, and Semiconductor Materials.

Marantz Business Electronics introduced a new AOI platform, iSpector 350 model, at Productronica.

MIRTEC introduced a wide range of next-generation AOI machines for the electronics manufacturing industry.

Multi PCB switched to GENESIS CAM system for pre-production data preparation.

MYDATA Automation AB signed a license agreement with Nordson Corporation involving patents for jetting processes developed by Asymtek.

Nan Ya Plastics is investing USD 38 million in its Kunshan (Taiwan) unit.

NEDA honored seven individuals with the Distinguished Service Award: Manny Brunson, Hagemeyer NA; Jim Bruorton, KEMET Electronics; Carla Mahrt, Tyco Electronics; Greg Mefford, Vishay Americas; Kip Poncher, Hawk Electronics; Jeff Ray, TTI, Inc.; and Frank Robertazzi, formerly of Avago.

New Era Electronics and EastBridge Partners LLC established NEE International Ltd., a microwave PCB sales and support force outside of Asia.

Nihon Superior received a Global Technology Award for lead-free solder materials.

Niton UK released Niton XL3, a new handheld material analyzer.

OK International received a Global Technology Award for its APR-5000-DZ advanced package rework system.

Ormecon International introduced two extremely thin immersion silver (90 nm) and immersion tin (350 nm) finishes at Productronica.

Park Electrochemical discontinued its bid for Columbia Aircraft Manufacturing Corporation.

Printar introduced GreenJet, the “first-ever fully digital solder mask printing system for PCB production.”

Rohm and Haas promoted Robert Ferguson to vice president and business unit director, Circuit Board Technologies. Congrats, Bob!

Rohm and Haas Electronic Materials Asia Pacific received ISO 9001:2000 certification for CMP polishing pad manufacturing at its Hsinchu, Taiwan, plant.

Siemens unveiled SIPLACE X4i, the “world’s fastest placement machine,” at Productronica.

Songwon introduced three new halogen free flame retardants: Songflame YA 010, Songflame YA 020, and Songflame TP100.

Stablcor and DDi entered a licensing agreement that eliminates end-product royalties.

Teradyne introduced a new duo PCB tester equipped with two independent test modules.

Tongtai shipped 80 PCB drilling machines to Foxconn in November.

Top Tec PCB Limited made its OnlineNovel comprehensive PCB Calculator available at www.top-tec-pcb.co.uk.

Tyco Electronics named Avnet Electronics Marketing Distributor of the Year.

Electronic Manufacturing Services and Related Assembly Activity

ACW set up component sourcing branch ACW Global Sourcing.

Celestica inaugurated its fully automated production line in Galway, Ireland, and received UL authorization for Medis Technologies’ Power Pack products.

Arima Electronics sold its notebook and server divisions to Flextronics for USD 192 million to allow it to focus on the telecom and solar-energy markets.

Bantam Electronics was listed on the Inc. 5000 list of fastest-growing private companies.

ChungHong entered into a Singapore IPO to repay bank borrowings and finance new plants and working capital.

CirTran named David Harmon CFO.

Custom Interconnect installed a new lead-free-compatible Blundell CMS 400 wave soldering machine.

Danor Electronics (Leicester, U.K.) entered into administration.

Enlarge this picture Chart 6

Delphi entered a USD 6.8 billion financing plan that enables it to exit from bankruptcy.

Digi International GmbH added a YESTech F1S AOI system to its plant in Breisach, Germany.

Digitron opened a new USD 40 million factory in Manaus, Brazil, with a combined monthly production capacity of 1.2 million motherboards, network cards, and fax cards.

Elcoteq auctioned off equipment at its Pecs, Hungary, facility.

Exception appointed Noel Murphy group finance director and Mark Tinsley systems architect director of Exception EOS.

Fisher & Paykel (Australia) relocated some electronics manufacturing to Thailand.

Flextronics:
•    Announced former executive Paul Misso was appointed president and CEO of Marquiss Wind Power;
•    Announced Flextronics Logistics expanded its Chickasaw Distribution Center in Tennessee by 214,000 ft2;
•    Purchased Arima Computer’s notebook and server divisions for USD 192 million;
•    Announced that A Gururaj, director and general manager of its India operations, resigned;
•    Received a manufacturing contract for Orbit 2x IPTV servers
from Edgeware;
•    Received a design and manufacturing contract for CNS Systems’ military-grade logistics monitoring systems; and
•    Tested nanocoating surface treatment for protecting bare copper traces with Texas Instruments.   
    Foxconn Hon Hai:
•    Is building a USD 500 million handset manufacturing base in Huizhou, Guangdong Province, China.
•    Is investing USD 1 billion to establish an industrial, urban, and entertainment complex in Northern Haiphong, Vietnam;
•    Is looking to open a R&D center in St. Petersburg, Russia;
•    Opened a USD 80 million plant in northern Bac Ninh province, Vietnam, for manufacturing camera modules, main boards, and connectors;
•    Partnered with Yosun and Elan on a new touch panel solution for handset customers;
•    Will procure USD 190 million worth of products from the group’s subsidiaries in 2008;
•    Increased its investments in mainland China by USD 267 million;
•    Is spending USD 35.1 million to establish a plant in
Changsu, China;
•    Announced that subsidiary P.I.E. Industrial Bhd invested MYR 20 million for the first stage of renovation and expansion of a
160,000 ft2 CEM facility in Malaysia’s Prai Free Trade Zone; and
•    Announced that subsidiary Rocombe Ltd purchased 74,999 shares in Diabell for USD 12.8 million.
    Incap:
•    Appointed Jarmo Kolehmainen general manager of Incap Indian operations and managing director of the Incap Contract Manufacturing Services; and
•    Incap Contract Manufacturing Services installed a Fuji-line in Tumkur, India.
    Intel:
•    Established a partnership with local manufacturer Digitron to produce motherboards in Zona Franca de Manaus, Brazil; and
•    Is adopting HDI PCB boards for its next-generation Montevina notebook platform.
    IPTE:
•    Installed a new assembly line in its Kladno (Czech Republic)
plant; and
•    Announced that Romania plant construction was scheduled to be completed by December 2007.
    Jabil Circuit auctioned off its assets from its Ayr, Scotland, manufacturing PCB(A) plant.
    Jurong Technologies:
•    Appointed Cheang Chee Ming president and CEO; and
•    Entered the business of making ULC handsets and LCD TVs.

Kitron ASA received two new contracts from Saab Avitronics valued at NOK 10 million.

LaBarge received an additional USD 2.2 million contract from Northrop Grumman for F-16 Radar System electronic components.

Leab Group added a Mydata MY12 pick and place machine and an Agilis feeder to its Järlåsa, Sweden, plant and several hole-mounting machines and an in-circuit test machine to its Estonian subsidiary, Leab Esti.

LG Electronics Vietnam added a mobile phone assembly line to its factory in northern Hung Yen.

Lockheed Martin teamed up with Sanmina-SCI to compete for the U.S. Army’s USD 3.5 billion vehicular intercommunications contract.

Lyrtech appointed Alain Houle president and CEO.

Nam Tai Group reorganized the structure of its Hong Kong Stock Exchange-listed subsidiaries NTEEP and JIC.

NPI Services received ISO9001:2000 certification.

Olympus closed a plant in China and relocated Chinese digital camera assembly to Vietnam.

Perlos:
•    Appointed Petri Perala chief technology officer and executive board member; and
•    Delisted its shares and options from OMX Nordic Exchange Helsinki Oy.

Plexus:
•    Received FDA approval for one of its Penang, Malaysia, facilities; and
•    Appointed Frazer Berry director of European sales.

Positivo Informática launched its own motherboard assembly line in Curitiba, Brazil.

Quanta Computer is spending USD 30.98 million to build a computer plant in China.

Sanmina-SCI:
•    Is closing its Tourlaville, France, plant by March 2008; and
•    Received a manufacturing contract for ZigBee products
from MeshNetics.

Simclar consolidated its metal fabrication operations at its Matamoros, Mexico, facility and closed its Winterville, N.C., facility.

Solectron’s former executive Douglas Britt was hired and appointed senior vice president of Worldwide Sales of SGI.
Stegia added eight OEM/ODM production lines to its Chinese subsidiary, Stegia Shanghai.

Stoneridge is closing its Sarasota, Fla., plant and reducing production in England by the end of 2008. Work is being moved to Estonia and China.

Titan Global Holdings plans on combining Nexus Nano Electronics and Titan Electronics Group into one company, which will be spun-off on the NASDAQ in 2008.

VirTex Assembly appointed ex-Celestica executive Cathy Armstrong Chamseddine vice president of Manufacturing Operations.

VOGT electronics sold its Letron division in Osterode to CFC Zwischenholding GmbH.