Despite “cooling” business conditions, domestic end-market demand improved in July as electronic equipment orders jumped significantly (Chart 1). Military electronics (Chart 2) were a key driver. Typically defense orders swing wildly from month-to-month so it is unlikely total end market demand is enjoying a strong, steady rebound.
Inventory levels remain a concern--at all supply chain tiers except the OEM level. Chart 3 shows the ratio of inventories to sales for a composite group of large component distributors, semiconductor manufacturers, EMS providers and OEM companies. Intel’s microprocessor inventory buildup drove the semiconductor sector. It is clear that the OEM’s suppliers are bearing the responsibility for maintaining stocks.
Global semiconductor shipment $ growth (a measure of electronic assembly activity) continued to improve in July (Chart 4). Most of this expansion continues to be in SE Asia although chip shipments to N. America (Chart 5) turned up on a 3-month average basis. While American shipments were up 17% (July’06 vs. July’05), it is obvious that this double-digit growth was relative to a trough in mid-2005.
In the PCB sector North American rigid printed circuit shipments have been “outgrowing” electronic equipment for all of 2006 (Chart 6). Growth imbalances are always worrisome as a “downward correction” normally follows. PCB process equipment is up even more. Typically process equipment sales are highly volatile and also lag PCB shipments by 3-6 months. It is likely the process equipment revenue growth will slow significantly late this year and into 2007.
The outlook for the coming few quarters is mixed. Inventory excesses and a cooling global economy will be offset by the “fall busy season.” Keep a close watch on orders to ensure they are backed by true end market demand.
PCB Fabrication
Advanced Circuits added 24-hour turn capabilities for single and 2-sided PCB orders.
Aiko Kiki is investing 4 billion yen for innerlayer capacity for its new IC substrate plant planned for completion 10/07.
BESTProto, a new PCB prototype and specialty small volume facility, began operations 8/06 in Rolling Meadows, Illinois.
Civa AS acquired Müller Print’s manufacturing capabilities 8/06.
CMK is investing 10.8 billion yen to expand capacity at its Thailand facility.
Colonial Electronic Manufacturers appointed Armand Beliveau Business Development Manager.
Compeq Manufacturing raised its Q3 handset PCB shipment projection to 45-47 million units.
Cosmo Electronics (Japanese flex circuit maker) will close and advised its customers to find alternative vendors.
Daisho Denshi’s new IC substrates plant is scheduled to be completed in autumn of 2006. It also plans to triple capacity at its Tochigi facility.
DDi acquired Sovereign Circuits for approximately $14.8 million.
Endicott Interconnect Technologies and Speedline Technologies are collaborating on MPM Accela Printer technologies.
Fuba started operation of a million dollar pulse plating plant in Dresden.
Fujikura developed an “Origami type” flexible circuit for handset hinge connections. In addition, the company developed a new hybrid construction of 1-sided flex circuits and rigid boards as a low cost solution vs. expensive rigid/flex with hinge cables. Finally, Fujikura developed a new buried via technology with a via-film plating process for multilayer PCB build up structures.
HannStar will spin off its PCB unit via US$90m listing on HK stock exchange by year’s end 2006.
Hitachi developed a low thermal-expansion multilayer circuit board for mounting semiconductor devices.
Mektron developed a new flexible circuit with a LCP substrate that has higher performances for high speed and long flexing endurance and an 80-micron pitch for double side construction.
Merix Corporation appointed Kelly Lang CFO.
M-Flex appealed a notice from Singapore’s Securities Industry Council that denied its application to withdraw its voluntary offer for MFS Technology Ltd.
Miyagi Meiko’s B2it plant is being expanded 5-fold. Its completion date is targeted for the end of fall of 2006. (Source: Dr. Hayao Nakahara)
Nan Ya PCB was added to the MSCI Standard Index on 8/06.
North Corp. filed for bankruptcy. It was founded as an R&D and engineering company for multilayer and rigid/flex boards.
Parlex signed a mutually exclusive agreement to manufacture medical biosensors for NeuroMetrix.
Ruwel AG was purchased by BlueBay Asset Management and Cargill Value Investment.
Santa Light Metal, 2nd-tier Japanese flex circuit manufacturer, and its two subsidiaries filed for bankruptcy protection.
SOMACIS pcb industries opened SOMACIS Deutschland GmbH managed by Mr. Jo van Neer. It was awarded the Nadcap (aerospace) certification for its Castelfidardo and Manfredonia facilities.
Taiwan Union Technology is investing $11 million to add a new plant in either Zhongshan (Guangdong Province) or Zhuhai (Guangdong Province) in southern China. It is also doubling monthly capacity at its Changshu plant by year end ‘06.
The PCB Company P/L is now offering aluminum-backed PCBs.
Titan Global amended its existing financing facilities and established a new $15 million revolving credit facility and $4,974,000 senior term loan with Capital Source Finance. Its Oblio unit is actively pursuing accretive acquisitions engineered to increase shareholder value. Finally, Titan promoted Bryan Chance to President and CFO.
TTM Technologies acquired the PCB Group of Tyco International for $226 million.
Velie Circuits closed its manufacturing facility.
Videocon acquired Webel Consumer Electronics and will set up a PCB unit and finishing school for IT engineers in India.Materials & Process Equipment
Advance SCT is building one of the world’s largest copper refineries in Singapore with an annual production capacity of 36,000 tons. It issued 3.06 million shares to Oversea-Chinese Banking Corporation at S$0.3267 each.
Agfa and CCI Eurolam expanded their product, service and support cooperation.
Albemarle raised flame retardant prices by up to 15% on Oct. 1, 2006.
Barco sold its Prints activity of Barco Manufacturing Services to Elprintar. Manufacturing will continue at the Poperinge facility.
D. B. Management Group (Don Dawson and Dan Beaulieu) formed a strategic alliance with Robbins Consulting (Keith Robbins).
Dover Technologies International sold Universal Instruments to Francisco Partners.
Georgia Institute of Technology received funding from the NASA/Earth Science Technology Office for a new liquid crystal polymer for PCBs that can be molded to any shape and perform well in extreme temperatures and intense radiation.
Henkel received the National Productivity Corporation’s 2006 Productivity award from Malaysia’s Ministry of International Trade and Industry for superior levels of productivity and process efficiency.
Horiuchi Denki commercialized a new CO2 laser marking system for PCB traceability.
Huntsman Advanced Materials introduced two halogen-free laminating resins suitable for lead-free soldering processes.
Isola experienced 40%+ growth quarter-over-quarter for 2005 and 2006 for lead-free capable laminates.
Jadason is investing S$15 million annually to expand PCB drilling and manufacturing capacity.
Kingboard Chemical will spin off its HK laminates operation in 4Q’06.
Lantronic moved manufacturing for its Lead-Free Model TT30 HASL system to Farmington, Arkansas.
Nan Ya is investing $613 million to expand fiberglass filament capacity in Kunshan, Jiangsu Province, China.
Nano-Proprietary formed a research agreement with a leading industrial chemical products company to develop technical inks for PCBs, flexible electronics and displays, communications instrumentation and RFIDs.
Nippon Steel Chemical is increasing its technical support services for circuit-substrate materials in China.
Nordson’s Asymtek promoted John Byers to president. Former president Robert Ciardella became an advisor.
Noritake developed a new firing furnace for the casting process of the adhesiveless flexible copper laminates.
Park Electrochemical terminated its split-dollar life insurance arrangement with Jerry Shore, the founder and former Chairman, President and CEO.
Qmax Test Equipments is selling automated test equipment in the U.S. under the Wayne Kerr Qmax brand.
Rogers Corporation and Thermal Transfer Composites entered into a strategic partnership regarding metal matrix composite products for electronic thermal management applications.
Rohm and Haas Electronic Materials received a Supplier of the Year award from SSMC.
Shin-Etsu Chemical developed a heat-resistant epoxy adhesive for semiconductor packages and PCBs.
Sony Chemical developed a new chip-mounting method that uses anisotropic conductive film materials to mount components on circuit boards.
Sumitomo Heavy Industry’s new high speed carbon oxide laser system for the micro hole drilling of HDI circuit boards is capable of 2000 hits per second.
Taiyo America, Carson City, NV received ISO14001:2004 registration.
The Watermill Group acquired Polaroid’s contract coating business in New Bedford, MA and renamed it Multilayer Coating Technologies.
Uemura Kogyo is investing over 3.5 billion yen to improve its manufacturing facilities in Japan and China.
Electronic Manufacturing Services
AdvantechAMS will manufacture low to medium volumes of Fiber-to-the-Home modems for Enablence Technologies.
Asustek Computer is separating its brand name division from its EMS business.
Barco sold its electronics manufacturing division and manufacturing plants in Belgium and the Czech Republic to IPTE SA.
Celestica will close its Castle Farm EMS Campus in Priorslee, England by November.
Cencorp reorganized global manufacturing including discontinuing US operations and transferring the manufacturing of Cencorp 1000 SR and Cencorp Datum products to Virkkala, Finland.
CirTran received a $2 million payment from ANAHOP in accordance to their restricted common stock purchase agreement. It also secured $1.5 million in financing through a securities purchase agreement with Cornell Capital Partners.
Delphi used retirement and buyout options to cut 6,300 IUE-CWA U.S. hourly jobs.
Digital Circuit Solutions moved to a 70,000 SF facility at Globe Center industrial park near Raleigh-Durham, NC.
Efore Plc is discontinuing production in Saarijarvi, Finland and transferring production to Estonia and China.
Elitegroup Computer System is investing a total of $4.39 million in Haier Information Technology (Shenzhen). Total stake is 16%. Its board of directors approved a NT$3.52 billion ($109 million) Uniwill merger. Vice chairman of Uniwill Computer, David Chen was appointed president of new notebook division.
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