Growth rates throughout the global electronics industry food chain reflect the timing and severity of the current world recession. End market growth was negative in the U.S. and Japan and approaching zero in Europe and Taiwan/China by late autumn (Chart 1).

Semiconductor shipments were even more sobering, with 3/12 growth negative in all regions in November (Chart 2). Recent fourth quarter guidance by a large group of world semiconductor producers predicts a 19.2 percent decline in Q4 FY 08 versus Q4 FY 07 chip revenues (Chart 3). Semiconductor capital equipment suppliers are having an even more difficult time with Q3 FY 08 revenues down over 40 percent compared to the same quarter in 2007 (Chart 4).

Enlarge this picture Chart 2

Global printed wiring board growth is in sync with both electronic equipment and semiconductors. It was below zero in all regions by autumn 2008 (Chart 5).

Combining this world food chain data produces a snapshot of the current business cycle for electronic equipment, chips, and PCBs (Chart 6). Not a pretty picture to be sure but very believable considering current world business conditions.

Keep watching these charts for signs of recovery. I expect the 3/12 curves will bottom in mid-2009 before moving into positive territory in early 2010.

General Market Estimates

Enlarge this picture Chart 3

The global financial system remains fragile and is subject to further debilitating shocks. World electronic equipment production is forecast to fall 2.2 percent during 2009 after an anemic 1.2 percent gain in 2008. Moreover, the recovery predicted for 2010 will have a less than effervescent 6.7 percent increase. – Henderson Ventures

PCB sales for the automotive industry could drop from USD 3.5 billion in 2007 to USD 2.5 billion in 2009. – Dr. Hayao Nakahara

China’s SMT 2008 market was CNY 36.15 billion. – CCID Consulting

Global market for electronic conformal coating is expected to grow at a CAGR of 6.8 percent from USD 6.6 billion in 2008 to over USD 9.1 billion by 2013. – BCC Research

EMS/ODM industry 2009 revenues are estimated to be flat or up less than 1 percent. – Charlie Barnhart & Associates

Enlarge this picture Chart 4

Worldwide EMS/ODM industry sales grew 9.3 percent in 2008 to USD 291 billion and are expected to grow by just 7.8 percent in 2009. – IDC

FCCL prices are expected to drop 5 to 10 percent in Q1 FY 09 after polyimide film prices dropped 2 to 10 percent in Q3 FY 08.

Phenol prices plummeted to their lowest level in the past six years due to sagging global PCB demand.

PCB Fabrication

Enlarge this picture Chart 5

Artetch Production Supervisor Glenn Wallington achieved Six Sigma Green Belt.

Bulova Technologies Group acquired BT Acquisition Corporation.

CMK Thailand postponed its Thailand expansion.

Endicott Interconnect:

• Received a USD 12 million R&D contract from the U.S. DoD;
• Received AS9100 aerospace certification; and
• Created a wholly owned subsidiary, EI Technologies UK Limited, Chelmsford, U.K., and appointed Steve Payne European sales director.

Eurocircuits acquired a majority stake in PCB Power.

Gold Circuit Electronics:

• Suspended HDI capacity expansion plans; and
• Will spend TWD 500 to 600 million replacing old equipment.

HannStar Board:

• Expects 2009 CAPEX to be under TWD 1 billion; and
• Idled its PCB plant in China after its utilization rate dropped to 55 to 60 percent in Q4 FY 08.

Enlarge this picture Chart 6

Innovative Circuits added a tin strip system, two drilling machines, and three routers in Alpharetta, Ga.

KCE shut down one of its three Thailand plants, terminating 600 workers.

Kyoden stopped its new Thailand MLB project.

Mass Design began manufacturing flex circuit boards in Nashua, N.H.

Multi-Fineline Electronix acquired British keypad maker Pelikon.

PartnerTech will divest its U.K. PCB subsidiary PartnerTech Poole by Q1 FY 09.

Prototron Circuits installed a Kuttler Automation Systems etch strip line.

R&D Circuits added a PCB-800 March Plasma system in South Plainfield, N.J. Ruwel:

• Bailment request was rejected by Geldern City Council;
• Cut Geldern workers’ hours by five hours per week; and
• Expanded its mass lamination service.

Samsung Electro-Mechanics began mass production of embedded substrates for mobile phones and semiconductors.

Sanmina-SCI cut 50 workers in Owego, N.Y.

Schweizer Electronic will lay off 75 workers in the first half of 2009.

Topsearch repaid all its syndicated loans.

Tripod restored operations at its 4G and 5G plants for HDI and notebook PCB production in Wuxi, China.

Uniflex Technology acquired Boardtek Electronics’ Yangzhou, China, FPCB plant for TWD 180 million.

Unimicron:

• Will complete construction of its netbook PCB plant in Changsha, Hunan Province, China, in Q1 FY 09; and
• Suspended its 2009 CAPEX and recruitment.

Unitech:

• Will spend TWD 1 billion expanding photovoltaic capacity with an additional 50 mW production line; and
• PCB operations will spend TWD 5 million maintaining equipment or increasing efficiency in 2009.

Waytec Electronics appointed James Pierce operations manager.

XACT PCB named WKK Distribution its distributor for China.

Materials and Process Equipment

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Adeka’s PCB etchant expansion in Kashima, Japan, will be completed in April 2009.

Agilent eliminated 800 jobs and implemented 5 to 10 percent pay cuts for remaining employees. Cencorp appointed Matti Paasila chair and Hannu Timmerbacka CEO and vice chair.

Christopher Associates introduced a high power soldering iron for mass soldering applications, including PCBA.

Connaught Electronics closed its Czech facility and transferred production to Tuam, Ireland.

DEK chair John Knowles received an Honorary Doctor of Business Administration from Bournemouth University.

Dow Chemical:

• Kuwait terminated a USD 17.4 billion petrochemical joint venture; and
• Implemented worldwide cost saving, including closing 20 plants, idling 180 plants, and staff reductions of 5,000 full-time jobs and about 6,000 contractors.

DYMAX acquired Tridak Division of Indicon.

Equipment Services LLC began offering SMT feeder calibration, repair, and refurbishment services.

Glotech Industrial stopped producing glass yarn in August 2008 due to weakening PCB demand.

GSI Group terminated volume manufacturing of legacy laser products in Rugby, U.K.

Indium promoted Emily Giasone to manager of its Metals, Chemicals, and Energy Business Unit.

Isola closed its Fremont, Calif., manufacturing operation February 18, 2009.

Jiangxi Copper formed a copper foil joint venture with Yates Foil USA, expanding capacity from 6,000 to 11,000 tons.

Lincoln International hired Edward Lethbridge as director, specializing in business and support services M&A in its London office.

Madico Graphic Films introduced a high temperature gloss white polyimide material for PCB bar code labels.

Mie formed an EMEA market sales and marketing partnership with Excellon Automation for its Cobra laser machine.

Nippon Polytech opened a COF substrate insulation ink plant.

Nordson Corporation inaugurated its new customer 86,000 ft2 office facility near Shanghai, China. OMG:

• Became a distribution partner for P Kay Metals dross elimination technology; and
• Electronic Chemicals facility in Maple Plain, Minn., was named one of America’s Safest Companies by EHS Today.

Park Electrochemical:

• Appointed David Dahlquist vice president of business development and Lawrence Kuntz sales director;
• Closed its New England Laminates Business Unit; and
• Reduced its workforce at Nelco Singapore.

PROMATION appointed Carl Ano marketing manager.

Rohm and Haas entered a joint venture agreement with IBM to develop and evaluate new materials for emerging packaging technologies.

Saki acquired a percentage of MacroScience from Schmidt Electronics Group.

Sanko doubled its halogen-free flame retardant capacity to 3,000 t/year.

Sifelmet (subsidiary of Cire Group) obtained ISO/TS 16949 automotive certification.

SMART Group elected Keith Bryant of Dage X-Ray Systems its new chair.

Speedline Technologies appointed Etek Europe its U.K. distribution partner.

SUSS MicroTec appointed Frank Averdung CEO.

Taiwan Glass Industrial stopped operations at two fiber glass fabric furnaces due to weak PCB demand.

Taiwan Union Technology delayed CCL capacity expansion plans in Zhongshen, Huanan Province, China.

Valeo laid off 3,400 workers in Europe.

WKK:

• Received a license from Nihon Superior to manufacture and sell SN100C lead-free solder in China; and
• Will open its Dongguan, China, lead-free solder factory in April 2009.

Materials and Process Equipment EMS, ODM, and Related Assembly Activity

Asustek imposed a hiring freeze.

Axiom Electronics received AS9100 and ESD S20.20-2007 certification from Det Norske Veritas.

BB Electronics appointed Leif Saaby Hansen to Suzhou GM.

Creation Technologies acquired ProWorks, Santa Clara, Calif.

ECS reorganized its motherboard business and hired Foxconn/Hon Hai ex-assistant president to manage its global channel sales business.

Elcoteq:

• Abandoned plans to sell its St. Petersburg, Russia, facility;
• Will begin production of consumer electronics and home digital systems in Q1 FY 09;
• Beijing received a series of awards in the Olympics Contribution Competition organized by the committees of the Beijing Economic and Technological Development Area; and
• Cut 50 jobs in Finland.

Enics will close its Varkaus, Finland, unit in 2009.

Flextronics:

• Added an electronics repair location in Memphis, Tenn.;
• Closed its R&D department and cut 30 percent of its staff in Beijing, China;
• Dismissed 110 employees in Srvri, Hungary, and 103 workers in Karlskrona, Sweden;
• Mothballed its Stersund, Sweden, facility after failing to find a buyer; and
• Temporarily postponed an LCD plant in St. Petersburg, Russia.

FM Logistic temporarily laid off 489 employees in Moselle, France, due to a lost HP contract.

Foxconn/Hon Hai:

• Took a 16 percent stake in Advanced Microelectronic Products;
• Will collaborate with HP on a St. Petersburg, Russia, factory;
• Chair Terry Gou made a USD 455 million donation to build a cancer hospital in Taiwan;
• Cut 20,000 staff globally, including 1,500 workers at its Hungarian plants, 70 engineers in Taiwan, and more than 30,000 jobs in China; and
• Cut employee wages by 5 to 10 percent.

Hewlett-Packard expects to buy USD 22 billion of products in Taiwan in 2009.

High-Tek Harness received a connector contract from Wistron in Zhongshan, China. HTC:

• Acquired San Francisco-based consumer product design company One & Company Design; and
• Cut its workforce in Japan by over 50 percent.

Incap:

• Appointed Sami Mykknen president and CEO; and
• Received a long-term power supply manufacturing contract from Powernet.

Inovar:

• Appointed Tom Carlin president; and
• Selected Ovations Grid-Lok automatic substrate support technology for its five SMT assembly lines.

Jabil:

• Cut 110 jobs in Brest, France, and will close the plant in two years;
• Is seeking a buyer for its 12 acre facility in Kergonan, France;
• Opened a USD 100 million, 6,500 m2 factory in Jalisco, Mexico; and
• Received a multiyear photovoltaic module assembly contract from Day4 Energy.

Jurong Technologies appointed Messrs Lee & Lee as legal advisers and KordaMenthaNeo as financial advisers regarding alleged irregularities found in receivable financing facilities.

Kitron appointed Roger Hovland sales and marketing director.

LaBarge acquired Pensar Electronic Solutions, Appleton, Wis.

Laird Technologies cut 500 positions in Szombathely, Hungary.

Leab Eesti O added a Juki pick-and-place machine and an Ersa wave soldering system in Tallinn, Estonia.

Leoni opened a cable harness plant in Durango, Mexico.

Metra Computer created an Intel motherboard assembly unit in Egypt for the African market.

MHS Electronics entered receivership.

NOTE:

• Acquired Norteam Electronics, Oslo, Norway;
• Reduced headcount by 100; and
• Laid off 47 employees in Torsby, Sweden.

Perlos laid off 500 in Hungary.

PKC:

• Closed its wiring harness factory in Pskov, Russia, and centralized production at its Suzhou, China, factory;
• Laid off 94 workers in Kempele, Finland; and
• Temporarily laid off 60 blue-collar employees in Raahe, Finland.

Plexus:

• Began construction of its 107,000 ft², USD 20 million global headquarters in Neenah, Wis.; and
• Product Services Engineering Group purchased a Teradyne TestStation LX UltraPin II in-circuit test system.

RPM Electronics (Colorado CEM) will permanently terminate all operations by the end of February 2009 after losing work from its two largest customers.

Sanmina-SCI, Shenzhen, China, received a volume production contract for Coolteq power modulator modules for cellular base stations from Nujira.

Scanfil EMS signed a wind power component manufacturing agreement with The Switch.

Sitronics laid off 300 employees in Votice, Czech Republic.

SMTA named Daniel Baldwin president-elect.

STI Electronics:

• Appointed Ryan Kirk Industrial Sales Manager; and
• Relocated to a new 54,000 ft2 facility in Madison, Ala.

Symetrics received the 2008 Best Business award from the Melbourne-Palm Bay Chamber of Commerce for the second consecutive year.

Taiwan Surface Mounting Technology merged subsidiaries TSMT Nanjing and TSMT Ningbo with Regent Manner International Holdings production bases in Suzhou and Ningbo.

TT Electronics was named to the Top 50 EMS Provider List by Manufacturing Market Insider.

TVAB cut 100 employees in Poland.

VT Automotive Electronics laid off 400 at its Autoelek-tronika division.

Winland promoted David Kuklinski to VP of sales and marketing.