I am writing this article on a historic day. Barack Obama was just elected the 44th president of the United States. I mention this not only because of its political and social significance but also because of the yet unknown economic bounce after that it may bring. World electronic industry and general economic data are quite sobering to date. Hopefully a modest post-election upturn is on the horizon.

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U.S. consumer confidence was at a 26-year low in September (Chart 1) as most retailers are predicting a grim holiday buying season. PC, cell phone, and other consumer electronic forecasts have suffered.

Globally, electronic equipment growth was already decelerating in Q3 FY 08 and the consolidated (but limited) guidance for Q4 FY 08 was negative (Chart 2). Fortunately (and somewhat surprisingly), inventories still remain in reasonable control throughout the supply chain (Chart 3). Hopefully we have learned a lesson from the post-2000 bubble meltdown where excess stock levels were the main driver for recession.

In the U.S., electronic equipment order growth has moved into negative territory (Chart 4) and global EMS providers (excluding Foxconn, who is silent) have predicted a negative Q4 FY 08.

The entire world electronics food chain is now at or near a zero growth point on the current business cycle. Late 2008 through at least mid-2009 prospects look bleak. Let’s hope a post-election bounce changes my mind!

General Market Comments

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The International Monetary Fund expects the world economy to expand 3.9 percent in 2008. In late October it slashed its 2009 forecast from 3.9 percent to 3 percent.

U.S. computer and electronics manufacturers did not grow their work forces at all in September. Telecommunications companies cut 3,400 jobs.

The technology industry is now getting squeezed on two sides. Established companies are struggling with slackening demand while venture capitalists are telling startups to cut costs and plan for a prolonged downturn.

Global IPO activity slowed to only 20 companies going public in Q3 FY 08 (raising USD 9.3 billion). This was down year-over-year from USD 34.8 and the recent high of USD 94.3 billion in Q1 FY 08.

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Gartner:

• Cut its mobile phone volume growth forecast from above 10 percent to 8 percent;
• Cut its 2009 IT spending growth forecast from 5.8 percent to 2.3 percent. It sees Western Europe down 0.8 percent and North America up 0.5 percent;
• Stated that the global PC market grew 15 percent year-over-year in Q3 FY 08 to 80.6 million units on the strength of mininotebook shipments; and
• Expects worldwide semiconductor equipment CAPEX to decline 25.7 percent in 2008, 12.8 percent in 2009, and return to growth in 2010.

World notebook PC shipments are expected to rise 30 percent year-over-year to 153 million units in 2008. _ DisplaySearch.

Hayao Nakahara estimated in early October that worldwide PCB output growth would be about 2 to 3 percent in 2008, with Taiwan up 5 to 6 percent; China increasing 7 to 8 percent; Japan contracting 5 to 6 percent or more; and Europe, North America, and Southeast Asia decreasing 10 percent, 4 to 5 percent, and 2 to 3 percent, respectively.

EDA industry revenue declined 3.7 percent year-over-year to USD 1357.4 million in Q2 FY 08. _ The EDA Consortium

PCB Fabrication

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Aspocomp decreased its shareholding in Aspocomp (Thailand) to about 6 percent.

Cabinova (Kopparberg, Sweden) added new equipment.

Cirexx achieved DSCC (Defense Supply Center, Columbus, Ohio) MIL qualification for 31032 at its PCB plant in Santa Clara, Calif.

Civa opened a technology office in St. Petersburg, Russia.
   
Cletronics began its 12,000 ft² expansion at its Cleveland, Ohio, factory.

Eagle Circuits installed an Excellon COBRA hybrid laser via drilling system in Dallas, Tex.

Elprint closed its Bergen, Norway, PCB operations.

Endicott Interconnect Technologies received Category 1A trusted accreditation for integrated circuits for packaging/assembly services in Endicott, N.Y.

Faraday Printed Circuits received GBP 75,000 from One NorthEast, which was applied toward a GBP 300,000 purchase of new machinery.

Flex Interconnect Technologies received official ITAR (International Traffic in Arms Regulations) registration from the U.S. Department of State.

GPV named Kurt Carstensen CFO and financial director.
   
HannStar Board postponed its planned 600,000 ft² notebook
PCB capacity expansion until 2009.

Hitachi Printed Circuit Solution merged with Hitachi Kanagawa Manufacturing Solution.

Imbera and Daeduck formed a high-volume embedded products manufacturing joint venture.

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Invotec installed a Hitachi laser drilling system in Tamworth, U.K.

Leicester Circuits ordered a 4 daylight vacuum lamination press system from Viking Test.

Merix received formal approval to process polyimide material under its MIL-PRF-31032 certification in its San Jose, Calif., factory.

Multi-Chem acquired its wholly owned subsidiary Multi-Chem Huaian.

Nicosofra-Gimflex (Burnhaupt-le-Haut, France) became insolvent.

Samsung Electro-Mechanics acquired a 95 percent stake in Unicap Electronics after purchasing J-Three International for USD 20.44 million.

Unimicron suspended its capital spending and recruitment due to the weak economy.

Materials and Process Equipment

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Arlon’s distributor, CCI EUROLAM, extended its coverage to Russia, Czech Republic, Slovakia, Hungary, Turkey, and North Africa.

Avnet opened a global integration and logistics facility in Chandler, Ariz.

Best appointed UNIWES Technology for rework and repair in Malaysia, Singapore, Thailand, Vietnam, Indonesia, and the Philippines.

Cadence appointed John Shoven as interim CEO after Michael Fister resigned.

China’s connector sales increased 16.8 percent year-over-year to USD 7.022 billion in 2007, making it the third largest connector market.

Cobar Europe named Prosem Technology its distributor for India.

Conexant sold off a portion of its domestic and international wireless patents for approximately USD 15 million.

Cookson Assembly Materials Group promoted Richard Ertmann to president.

CVD Equipment received approximately 50 percent of its USD 25 million in orders in 2008 from solar and energy markets.

DYMAX acquired dispensing company Tridak.

ESI:

• Purchased Zygo for USD 173.5 million in stock; and
• Launched its 5330 micromachining system optimized for silicon via drilling.

FCT Recovery appointed Annette Porter inside sales manager.

Furukawa Electric introduced its lead-free surface finish technology “NU Series” for PCBs and components.

Heller Industries is investing MYR 115 million to upgrade its Bayan Lepas operations.

H.I.G. Capital acquired Petroferm.

Hexion sued investment banks Credit Suisse Group and Deutsche Bank for not funding its USD 6.5 billion Huntsman takeover deal.

Indium:

• Named EMC3 Group its sales channel partner in Florida; and
• Promoted David McKee to key and direct accounts manager in Europe.

Isola filed a patent infringement complaint with the U.S. International Trade Commission regarding unlawful U.S. importation of certain prepregs, laminates, and PCBs.

Juki Automation Systems and Cogiscan released a lean material control system.

Kester named Steve Santangelo North American operations manager.

KOA unveiled a new inkjet printing technology with nanosilver particles for 40 µm lines and space traces on circuit boards.

Kozio released a test automation tool for volume testing of processor-based PCBs.

Lincoln International’s Global Aerospace and Defense Industry Group hired and appointed Teresa Clegg to VP.

LPKF Japan started a laser processing service in Japan for flexible circuits, electronic devices, and the patterning of thin film materials.

Manncorp added Michael Prestoy to its sales engineering staff.

Mentor Graphics acquired Flomerics Group.

MYDATA appointed Pelle Wennerlund managing director in China.

Nordson acquired Wachter, Paul and Co.

OHMEGA Technologies appointed CCI EUROLAM its European distributor for OhmegaPly thin film embedded resistive material.

OK International introduced its Metcal MX-5000 series soldering and rework system.
   
Panasonic Factory Solutions Europe named HåJa its sales and service representative in Sweden and Norway.

Park Electrochemical appointed Thomas Pursch president of Park’s Nelco Products, Business Unit.

Photodata Test Services acquired Scan & Design of southern England.

PhotoMachining hired laser scientist Francis Burns.

Photronics closed its Manchester, U.K., photomask facility.

Quasys (Switzerland) acquired all JEDEC tray and waffle pack feeder assets and rights from BESI/Datacon.

RBP Chemical Technology named Ken Kocolowski technical sales representative.

Rohm and Haas stockholders approved its merger with Dow Chemical.

Seica Germany opened a demonstration and training center in Munich, Germany.

Stera released a new coordinate measuring machine with AOI capabilities for PCBs.

Teledyne acquired sensor manufacturer Cormon Limited (Lancing, U.K.).

Toyo Ink developed silver ink for inkjet printing of circuit boards.

Unisem started volume shipments of packages using its proprietary copper wirebonding technology.

Valor and Business Objects developed a manufacturing operations dashboard solution for the electronics industry.

Ventec Electronics and GVL UK jointly introduced thermally conductive metal backed laminates.

Vishay terminated its offer to buy International Rectifier.

Electronic Manufacturing Services and Related Assembly Activity

ACT Electronics:

• Closed its Hudson, Mass., facility and laid off employees in Corinth, Miss.; and
• Sold its Mississippi division assets to CDR Manufacturing.

Adeptron appointed Francis Lindayen CFO.

AdoptSMT Group appointed Barry Clark managing director of its London-based AlternativeSMT group.

Arima Computer changed its name to Arima Photovoltaic and Optical.

Asustek delayed its previously announced hiring of 3,000 employees until the second half of 2009.

AWS Electronics Group is using its GBP 5.5 million equity investment from Barclays Ventures to finance upcoming acquisitions and fund organic growth.

Axis Electronics appointed Paul Jackson manufacturing director and Chris Nye materials director.

Ayrshire Electronics acquired ACT Electronics.

Catalyst Manufacturing Services:

• Was awarded a second Assembly and Test Services program for mission-critical hardware by NASA; and
• Added a Microsoft Dynamics NAV 5.0 ERP system across all of its facilities.

Celestica received a manufacturing contract from Astute Networks for its Caspian Edge Storage suite of AdvancedTCA solutions.

Cemtron (Dalgety Bay, Scotland) entered administration.

Compal Electronics:

• Injected USD 61.2 million in affiliate VIBO Telecom through a share swap;
• Put its capacity expansion in Vietnam and China on hold; and
• Expects to add an additional 300 R&D technicians in 2009.

CTS secured a contract for an electronic throttle control accelerator pedal module from a major Japanese automotive manufacturer.

Delphi’s former Oak Creek PCB workers received trade adjustment assistance and a USD 1.8 million grant from the U.S. Department of Labor.

Dynamic-EMS added a BTU Pyramax SMT reflow oven, a Horizon 03i SMT screen printer, a Kardex vertical storage system, and QuoteWin software and hosting services to its Dalgety Bay, Scotland, manufacturing facility.

Elcoteq:

• Appointed Roger Taylor senior VP group operations;
• Celebrated its 10th anniversary at its Pecs, Hungary, plant; and
• Is expanding its production in Russia in Q1 FY 09.

Epic Technologies named Mike Goryl VP of human resources.

FCT Assembly appointed Horizon Sales as its representative for its assembly materials division in Michigan, Indiana, Ohio, Kentucky, and Western Pennsylvania.

Flextronics:

• Donated USD 400,000 to Habitat for Humanity to help those affected by the Sichuan, China, earthquake;
• Laid off 40 employees in Linköping, Sweden, and 70 in Taiwan;
• Has 100 factories operating at full capacity;
• Is closing its Pennsylvania subsidiary, Avail Medical Products, by the end of 2008; and
• Created a global team dedicated to advanced solar solutions.

Foxconn:

• Postponed its project deadlines for its electronics production in St. Petersburg, Russia;
• Leased 40,000 ft² of office space in Houston, Tex.;
• Introduced its second “Green Series” board; and
• Was the third largest connector supplier in China in 2007 with shipments of USD 435.4 million and 6.2 percent market share.

Foxlink:

• Received midrange handset orders from Vodafone; and
• Acquired a 3G CDMA module/modem card patent license from Qualcomm.

HANZA Poland is expanding its production hall to 3,500 m2 and adding additional assembly lines.

Incap terminated 12 positions and temporarily laid off 67 at its Vuokatti, Finland, factory.

IPTE closed its Slovakian subcontracting division Connect Systems and transferred its activities to Romania.

Jabil Circuit:

• Began production of PocketFinder devices at its Meung-sur-Loire, France, facility; and
• Plans to close or sell Brest, France, plant.

Jiaxing Wingtech Communication Technology received a 3G CDMA module/modem card patent license from Qualcomm.

Jurong Technologies sold some of its EMS business and assets to Global Emerging Markets Group.

Kimball began construction of a facility in Poland, which is scheduled to be operational by July 2009.

Kitron UAB in Kaunas, Lithuania, received EUR 9 million in new marine orders.

K-One became an OEM.

LaBarge received a USD 1.6 million cable assembly contract for M1 Abrams tanks from General Dynamics.

Neways cut 70 jobs at its Neways Electronic Assemblies subsidiary in the Netherlands.

Note laid off 100 in Sweden.

Onkyo purchased a 40 percent stake in Malaysian CEM S&O Electronics from Roxy Enterprise for JPY 560 million.

PartnerTech:

• Laid off 43 employees in Åtvidaberg, Sweden; and
• Received ISO 13485:2003 medical certification at its King’s Lynn manufacturing facility in Norfolk, England.

PKC acquired MAN’s cable harness production in Poland.

Plexus received a primary contract to manufacture Kirby Lester pharmacy automation systems.

Quanta received next-generation Intel Classmate PC orders.

Raven Industries was named to the 2008 Forbes list of the 200 Best Small Companies in America.

Salcomp appointed Jari Saarinen CFO and Pekka Kyyriäinen VP, global operations.

Sanmina-SCI promoted Hari Pillai to president and COO.

SenDEC CEO Ken Fiske was named 2008 Business Person of the Year by the Small Business Council of the Rochester Business Alliance.

SMS Electronics tripled its XJTAG licenses to meet upsurge in demand.

Suntron received a Achilles Satellite Platform manufacturing contract from Wurldtech.