The global electronics industry took a hit in early 2008. A combination of U.S. financial woes (which ultimately impacted consumer and business spending worldwide), the normal post-Christmas seasonal consumer electronics slowdown, Lunar new year plant closings in Southeast Asia, and heavy February snows in China combined to create a sharp downturn throughout the food chain. World PCB production plunged in January and February (Chart 1) and semiconductor shipments followed suit (Chart 2). The chip shipment downturn (dollar value) was further amplified by severe DRAM price degradation.

Enlarge this picture Chart 2

Fortunately, the worst may be over as the U.S. Fed has quickly moved to bolster (but of course not totally fix) domestic economic woes. Stock prices are rebounding and electronic equipment end market demand seems to be holding. The Institute for Supply Management’s Purchasing Managers’ Index (Chart 3) may have bottomed in March. U.S. electronic equipment orders have remained surprisingly strong (Chart 4) in the face of our severe national financial crisis and North American PCB orders have rebounded (Chart 5), perhaps correcting for an overly excessive downward correction in mid-2007.
   
With springtime in hand and the late summer/autumn busy season not that far ahead, better times should be on the horizon. Looking at the domestic electronic food chain (Chart 6), all the end markets are in positive growth territory (three-month basis). Components still must catch up, but, based upon today’s data, the bottom is not falling out.

The electronics sector is showing surprising resiliency. I hope that this strength continues.

General Comments

Japan’s PCB industry is forecasted to grow 1.0 percent to JPY 1.39 trillion in 2008 and JPY 1.61 trillion by 2012. – JPCA
   
India’s Cabinet Committee on Economic Affairs approved an investment policy to generate EMS growth via infrastructure and utilities including power, water, roads, transportation, sewerage, and effluent treatment facilities.

PCB Fabrication

Enlarge this picture Chart 3

Aoshikang Precision Circuits is investing USD 25 million to upgrade its HDI capacity in Huizhou, China, and has earmarked USD 38 million for a new PCB manufacturing factory in Hunan province.
   
AT&S is spending EUR 36 million for a new standard multilayer and two-sided PCB plant in Nanjangud.
   
Endicott Interconnect Technologies signed a sales/manufacturing agreement with Unimicron Technology for CoreEZTM organic substrates.
   
Exception PCB:
•    Appointed Andrew Donlan manufacturing director of its Tewkesbury, U.K., plant; and
•    Implemented its new HDI processes including microvia tower, eXMVT, VteX for copper-filled vias, and eXFPT flat pad technology service.
   
Founder PCB opened an industrial park with three plants (including one HDI plant) and a PCB technology center.
   
FTG Circuits, Toronto, was named most improved supplier at the General Dynamics Canada supplier conference.
   
GSPK Circuits was acquired by TCL Group.
   
Ibiden:
•    Will reduce energy consumption by 50 percent by 2010; and
•    Received a subsidy to expand capacity at its plant in Dunavarsany, Hungary.
   
Innovex:
•    Transferred its common stock listing from Nasdaq Global Market to Nasdaq Capital Market; and
•    Appointed Randy Acres chief financial officer.

Enlarge this picture Chart 4

Japan Circuit Industry expanded its plant in Taiwan and doubled its manufacturing capacity of thin BGA substrates.
   
Kestrel International Circuits appointed Fred May divisional sales manager, Cables & Connectors.
   
Kyusawa Seisakusho terminated its business after its major customer Yumex entered bankruptcy.
   
Merix:
•    Sold its flex facility in San Jose, Calif., to private investor James Gudenau for USD 2 million; and
•    Leased its Wood Village facility to solar cell manufacturing company XSunX.
   
Merlin Circuit Technology was awarded PCB Supplier of the Year by Plexus.
   
MFLEX named Reza Meshgin chief executive officer; Phil Harding continued as board chair.
   
Nan Ya, Wistron, and Chemtura joined the High Density Packaging User Group International.
   
Nippon Koki terminated its business and entered into bankruptcy.
   
Optiprint, a Swiss high-frequency and flex PCB maker, added an ATG tester, a new AOI system, several drilling machines, and LDI-exposure equipment.
   
Prism Electronics (St Ives, Cambridgeshire) designed and manufactured PCBs for GSI’s new fiber laser.
   
Rexxam Czech will build a PCB production plant in Kadan, the Czech Republic.
   
RJR Circuits earned a Gold Award from Denver’s Metro Wastewater Reclamation District for 100 percent compliance with industrial pretreatment requirements.
   
Sanyang Electro Mechanics completed private placement of 999,990 common shares at KRW 770 (USD 0.82) per share, raising gross proceeds of KRW 769.992 million (USD 0.82 million).
   
Shirai Electronics Industrial acquired 100 percent of a Japan-based company engaged in the manufacturing and sales of chip on board base plates for JPY 735 million (USD 7.32 million).
   
Unimicron:
•    Will establish a PCB cluster in Vietnam; and
•    Expects construction at its Hunan, China, base to be completed in the second half of 2008 and anticipates that this plant’s monthly capacity for traditional PCBs will be expanded to 2 to 3 million ft² in two to three years.
   
Unitech:
•    Is investing TWD 1 billion to expand its HDI manufacturing capacity in its Tucheng, Taiwan, plant;
•    Bought a 72,500 m² plot for stage three in Yilan, China; and
•    Began its expansion into stage two at its Shanghai, China, plant.
   
Viasystems:
•    Former workers from Longbenton and South Shields (U.K.) are still seeking severance; and
•    Is investing approximately USD 40 to USD 45 million to expand capacity and capabilities at its PCB operations in Zhongshan, China.
   
Yangjiang Jiaxin Circuit Board began construction of an 80,000 m², RMB 150 million, multilayer HDI joint venture plant with a Hong Kong PCB maker.

Materials and Process Equipment

Enlarge this picture Chart 5

AMI Doduco named Marc Turpin president and chief operating officer and Albert Mastrangelo vice president of sales for the Americas.
   
DEK:
•    Celebrated its 40th anniversary; and
•    Unveiled a large (24 x 24 in) Photon print platform.
   
DuPont Printed Circuit Materials celebrated the 40th anniversary of Riston dry film photoresist.
   
Henkel acquired Akzo Nobel’s adhesives and electronic materials businesses.
   
Heraeus Contact Materials Division appointed Erik Bergum Assembly Materials Business Unit manager.

Hitachi developed a new Pb-free solder that retains bond strength above 200 °C.
   
Illinois Tool Works acquired Vitronics-Soltec from Francisco Partners.
   
Kyoritsu Denki opened a new plant in India for manufacturing PWB testing equipment.
   
MacDermid introduced a two-step MicroCat process using high-resolution printing and high-productivity additive metallization to produce low-cost, solid copper circuit traces.
   
Manz Automation acquired majority stake in Taiwan-based wet-chemical cleaning system manufacturer Intech Machines.
   
March Plasma Systems:
•    Released its PROVIA plasma system for HDI, flexible, and rigid PCBs; and
•    Introduced its FP64 Plasma System for flexible PCB manufacturing applications.
   
Nagaoka University of Technology researchers developed a low-cost way to synthesize nanograins of copper that resist oxidization for inkjet printing circuits.
   
Nihon Almit broke ground for its new plant in Ratchaburi Province, Thailand, for lead-free solder cream production.
   
Nippon Mining & Metals is investing JPY 2 to 3 billion to expand its Philippines output of electrolytic copper foil by 18 percent to 1,000 monthly tons.
   
Nordson appointed Steven Kew chief executive officer of its subsidiary Dage Holdings.
   
Oak-Mitsui Technologies and Shocking Technologies signed a letter of intent to commercialize Shocking’s X static Voltage Switchable dielectric material, including Sanmina-SCI ESD technology.
   
Omnitrol Networks and Texas Instruments formed an alliance to deliver a RFID real-time traceability solution for PCB manufacturing applications.

Omron developed a FT-IR technique to determine solder paste age.

Ormecon’s “unnamed U.S. customer” began initial mass production of about 10,000 ft²/mo of PCBs utilizing its organic metal nanofinish.

Park Electrochemical:
•    Appointed David Dahlquist director of marketing; and
•    Changed its Waterbury, Conn., business unit’s name from Nelcote to Park Advanced Composite Materials.
   
Rehm Thermal Systems hired Marc Dalderup as chief commercial officer.
   
Siemens will divest its Electronics Assembly Systems business by September 2008.
   
Stablcor licensed Graphic PLC.
   
Taiyo Ink is investing USD 30 million to establish a PCB-use ink production plant in Zhongshan, China.
   
Valor Computerized Systems:
•    Will integrate Assembléon’s Pick & Place machine interfaces with Valor’s software; and
•    Established a technological partnership with Nagoya Electric that significantly shortens setup time of Nagoya’s inspection machines.

Electronic Manufacturing Services and Related Assembly Activity

Enlarge this picture Chart 6

Arima Communications began handset production in Wujiang, China.

Asustek:
•    Pegatron and Unihan subsidiaries received Xbox 360 EMS contracts from Microsoft; and
•    Pegatron – fire damaged three SMT lines in Suzhou, China.
    Celestica:
•    Appointed Paul Nicoletti executive vice president and chief financial officer; John Boucher executive vice president, Supply Chain Management Solutions, and chief procurement officer; and Elizabeth DelBianco executive vice president, chief legal and administrative officer, and corporate secretary;
•    Cut 78 jobs in Aguadilla, Puerto Rico, and transferred a manufacturing line to Asia; and
•    Outbid Foxconn to become primary contractor for GN Netcom.
   
Compal Electronics is expanding capacity in China and Vietnam and expects its notebook production volume to reach 60 million units annually by 2010, with China operations accounting for 60 percent of production and Vietnam 40 percent.
   
Continental AG closed ex-Siemens VDO Automotive site in Sophia-Antipolis, France.
   
CTS acquired Orion Manufacturing for USD 10 million.

Dell is closing its Texas PC assembly plant and outsourcing more work to ODM/EMS companies as part of its USD 3 billion cost reduction.
   
Delphi’s investor Appaloosa Management terminated its planned USD 2.55 billion equity investment, which was to enable Delphi’s early exit from Chapter 11.
   
DENSO opened an automotive electronics plant in Maryville, Tenn.
   
Elcoteq appointed Antti Piippo chair and Juha Toivola deputy chair.
   
Flextronics:
•    Shenzhen passed IPC certification for lead-free assemblies per EU RoHS Directive (2002/95/EC);
•    Is investing PLN 18 million and will employ 250 at its logistic center for Dell in Lodz, Poland; and
•    Is seeking a location for a notebook computer EMS plant in Asia.
   
Foxconn:
•    Will build a EUR 32.3 million assembly plant near Kolpino, Russia, employing 5,000 people;
•    Will build a USD 12 million assembly plant in Shandong Province, China, through its affiliate Argyle Holdings; and
•    Purchased the Czech factory of computer parts maker FIC CZ.
   
Hon Hai received a manufacturing contract for Apple’s next-generation iPhone.
   
Jabil Circuit:
•    Plans to open a plant in Russia provided import duties on components are cancelled; and
•    Said an economic air pocket was hurting mobile phones and television demand.
   
JEC Technologies will add 260 assembly jobs in Forest City, Pa.
   
Johnson Controls set up a USD 30 million electronic components plant in Skopje, Macedonia, having six assembly lines by year-end 2009.
   
LaBarge received a USD 3.5 million electronics contract for Northrop Grumman's missile countermeasure system.
   
Motorola will stop mobile phone production in Singapore by year-end 2008.
   
Murrietta Circuits completed its move and expansion of its USD 2.2 million, 50,000 ft2 manufacturing plant in Anaheim, Calif.
   
Nam Tai completed its USD 51.1 million sale of its entire interest in J.I.C. Technology.
   
Ningbo Bird sold its 50 percent stake in Ningbo Bird Sagem Electronics to joint venture partner Sagem Mobile of France for CNY 158.9 million.
   
Note:
•    Acquired mechanical engineering company Kjell Tengmo, Järfälla, Sweden; and
•    Cut 40 jobs in Norrtälje, Sweden, and moved its production to Poland, the Baltics, and China.
   
PartnerTech:
•    Appointed Rune Glavare president and chief executive officer;
•    Åbo, Finland, plant was acquired by management; and
•    Sold its SMT department in Åtvidaberg to KA Elektronik.
   
Quanta Computer and its affiliates acquired 21 percent stake in Kontron Asia.
   
RAD Electronics acquired RPM Technology, Fort Collins, Co.
   
Samsung Electronics is building a USD 670 million factory in Bac Ninh Province, Vietnam, for cell phones, telecommunications equipment, electronics parts, and accessories.
   
Sanmina-SCI:
•    Closed its Cherbourg, France, plant, transferring production to Hungary and Thailand;
•    Introduced SuperBC laminate for providing bypass capacitance inside silicon chip packages and high-performance PCBs; and
•    Was named Best-In-Class supplier by LSI.
   
Simclar named Stephen Donnelly chief financial officer, treasurer, and secretary, filling vacancies created by Marshall Griffin’s resignation.
   
SMT Resource Group consolidated its facilities in Temple Texas and Wake Forest, N.C., after moving into the former Flextronics facility in Raleigh, N.C.
   
SMTC added a dedicated precision metal fabrication facility at its Chihuahua Mexico campus.
   
Sparton appointed Richard Langley interim president and chief executive officer after David Hockenbrocht retired.
   
Surface Mounting Tech is building plant in Sichuan, China.
   
Trimble liquidated its SMT-equipment at its Stockholm, Sweden, facility and exited the assembly business.
   
Triton Electronik, Pointe-Claire, Quebec, acquired insolvent Positron Technologies, Kirkland, Quebec, for an undisclosed price.
   
TT Electronics acquired New Chapel Electronics for GBP 4.2 million.
   
TTems appointed Dave Whippey manufacturing director and Steve Davies engineering director at its Rogerstone, South Wales, site.
   
Videoton Holding (Szekesfehervar, Hungary) opened a site in Marcali, Hungary.
   
Wistron is investing USD 10 million to build a notebook computer factory in Vietnam.
   
Zollner Elektronik (Zandt, Germany) opened its 13th factory in Beja, Tunisia.