Global electronic equipment revenues declined an estimated 11 percent in 1Q09 vs. 1Q08 based upon the composite first quarter financials of a large group of OEMs (Chart 1). Although inventories eased a bit last quarter in real terms, the ratio of inventories/sales (Chart 2) increased for OEMs, EMS companies, and electronic component distributors (but held steady at a high level for semiconductor makers). Lower sales (not higher stock levels) drove the 1Q09 inventory/sales ratios higher.

Enlarge this picture Chart 2

First quarter global revenue “growth” by sector was awful (Chart 3) with only military electronics in positive territory.

U.S. electronic equipment orders and shipments (Chart 4) performed better than most of the world – thanks to the U.S.’s higher dependence on less volatile end markets (military, medical, instruments, and controls). Of course these “domestic markets” offer much lower volumes compared to computers, mobile communications, consumer electronics, and automotive sectors, which drive export dependent SE Asia.

Enlarge this picture Chart 3

Chart 5 summarizes the first quarter annualized (12/12) and 3-month (3/12) growth of the N. American electronics food chain. The 3/12 "eads" the 12/12. For many sectors, the U.S. performed better than the world in 1Q09 – although business was bad everywhere!

Looking forward, the global business cycles for PCBs, semiconductors, and electronic equipment appear to be at or near their low points (Chart 6), but actual growth won’t resume until these 3/12 values “turn north” and cross the 3/12=1.0 line.

It still appears that 2009 will be a very difficult year with recovery (real growth) not occurring until 2010. Fortunately, however, the worst (1Q09 trough) is behind us!

General market comments

Enlarge this picture Chart 4

China’s high-layer count PCB suppliers are benefitting from its government’s $59 billion commitment to a new TD-SCDMA 3G wireless system. - Dr. Hayao Nakahara

Japan’s circuit board industry value is expected to decrease 6.9 percent y/y to ¥ 1,109.6 billion (USD11.3 billion) in 2009. - JPCA

Malaysian PCB manufacturing sales value fell 49.4 percent in February 2009. - Malaysian Statistics Department

Enlarge this picture Chart 5

S. Korea’s top 16 PCB makers registered nearly 13 percent y/y growth in 2008 in local currency, but minus 4 percent when converted in “average” 2008 exchange rate (1,107 Won/USD). - Dr Hayao Nakahara

Taiwan’s April PCB order visibility extended to 3-4 weeks from 2-3 weeks due to increased orders from the notebook and TFT LCD segments. - Digitimes

PCB fabrication

Enlarge this picture Chart 6

4th Dimension PCB obtained International Traffic in Arms Regulations (ITAR) registration. Aspocomp named Sami Holopainen CFO.

AT&S shifted its focus to high-end manufacturing in the mobile devices market.

PC Boards Inc. (Chanute, Kans.) founder Dennis Steinman joined D. B. Management Group.

DDi received Nadcap accreditation for its Ohio facility.

Dyconex installed new plasma desmearing equipment.

EMA Design Automation acquired DesignAdvance.

Endicott Interconnect Technologies formed a strategic manufacturing alliance with Cartel Electronics.

Eurocircuits opened a second European production unit in Aachen, Germany. GPV Industries:

• filed for the suspension of payments for GPV Industri, GPV PCB Division, GPV Teknik, GPV Laser Teknik Glostrup, and Dentalman.
• terminated in-house PCB production and spun off Printca.
• laid-off ten employees in Aars, Denmark.

Graphic Plc (Crediton) received IECQ capability approval (QC 001002-3) for a PCB manufacturing system that complies with IPC-6012 and IPC-6013 requirements.

IPC made J-STD-075-DE available in German.

JetPCB began stocking Rogers and Aluminum materials.

MFLEX commenced construction of its MFC3 manufacturing facility in Suzhou, China.

Nitto Denko started closure of its LCD driver module, COF substrate business.

Pho-Tronics appointed David Olson GM.

Printed Circuits received U.S. & Canadian Joint Certification (JCP) for military and aerospace applications.

Printline investors assumed ownership.

Quality Circuits (Fergus Falls, Minn.) celebrated its 20th anniversary of operation.

Ruwel laid-off half of its 300 workers in Geldern and Pfullingen, Germany.

SchmartBoard received a patent for “EZ” technology for hand soldering SMT electronic components.

Schweizer Electronic:

• entered a customer support, production, and technology partnership with Meiko Electronics.
• introduced Jumatech “Wirelaid” technology and combined fine conductor and high current structures in a single PCB.
• suspended short-work in all manufacturing facilities in May.

Spirit Circuits acquired Aztec Circuits (UK).

TC Interconnect shifted its focus from single-sided and double-sided PCBs to multilayered PCBs for high-end Japanese, Korean, and European markets.

Unitech Printed Circuit Board 3+n+3 HDI board output increased from 10 percent at the end of 2008 to 20 percent as a result of handset chip packaging changing from wire-boding to flip-chip.

Würth Elektronik closed its PCB manufacturing facility in Pforzheim and implemented a short-work in Niedernhall, Schopfheim, and Rot am See.

Materials, process equipment and related activities

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3M offered 3,600 U.S. employees early retirement.

Aeroflex acquired VI Technology.

Agilent laid-off 300 workers in Santa Rosa, Calif.

AGY introduced L-Glass™ fiber for high frequency, improved signal integrity circuit designs.

Altus Group named David Boyd its Scotland Sales Manager.

Asymtek introduced DispenseJet® Systems that enable consistent and reliable dispensing of liquid electrolyte materials for micro-fuel cells and electrochemical applications.

BTU International named Peter Tallian CFO.

C.L. TECH entered an agreement for the manufacture, support, and global distribution of Mania Technologie universal grid testers.

Co-Tech raised copper foil prices by 5-10 percent.

Cyncrona OU (Estonia) acquired elnitec (Sweden).

DEK:

• introduced its ProFlow® enclosed print head system.
• appointed Prodelec its exclusive distributer in Italy.

DfR Solutions was chosen by the U.S. Navy to perform a Pb-free solder reliability study.

Dielectric Solutions filed an involuntary Chapter 11 petition in U.S. bankruptcy court.

DKN Research Group and NY Industries co-developed embedded passive technology built on thin multilayer thick film flexible substrates.

DuPont:

• cut production, reduced fixed costs by $730 million, laid-off 2,500 full-time and 8,000 contract workers, and asked salaried employees to take unpaid time off.
• Printed Circuit Materials introduced two new LDI dry film photoresists.

ESI sold a LaserMill Micromachining system to Lund University in Sweden for micro-wire and circuitry production used to combat the effects of Parkinson’s disease.

Essemtec:

• named PMTech its SMT entry-level machine distributor.
• started equipment supplier subsidiary SMT Essemtec Benelux in Herselt, Belgium, for Belgium, Netherlands, and Luxembourg markets.

Etek began distribution of Aqueous Technologies products in the UK.

Europlacer became the UK distributer for ASC International and Hexi Electronic Equipment reflow systems.

GOEPEL electronic added Testonica to the global alliance program GATE (GOEPEL Associated Technical Experts).

HMS-Höllmüller named John Gebhardt Sales Manager for Asia.

Huntsman received a credit waiver from its lenders for its $650 million revolving credit facility.

Imbera secured USD15 million in Series B funding from NorthZone, Index, and Conor.

Isola subsidiary Polyclad Laminates renewed its Drum Side Treated Foil license agreement with Nan Ya.

Kulicke & Soffa selected BoardVantage to distribute board materials.

Kyocera Tycom named Jim Good President.

Lincoln International was named “Middle Market Investment Bank of the Year” by Buyouts Magazine.

Machine Vision Products commenced a Chinese language Web site.

Manncorp introduced ‘Dross-B-Gone^™’ powder, which recycles solder by separating the dross.

Micronic Laser Systems acquired MYDATA Automation.

MicroScreen began offering screen frames up to 70” x 102” at its new manufacturing facility in South Bend, Ind.

MIRTEC Europe appointed pb tec as its distributor in Germany, Austria, and German speaking part of Switzerland.

MYDATA laid-off 40 workers in Sweden.

Nan Ya raised CCL prices by 5 percent in April.

Nextreme Thermal Solutions and Nucletron Technologies entered into a distribution agreement.

Nordson Chairman, CEO & President Ed Campbell announced his intention to retire in early 2010.

Orbotech completed sale of its electronics assembly business to Orpro Vision.

Panasonic named Tom Gebhardt President of Panasonic Factory Solutions Company of America.

Park Electrochemical appointed:

• Patrick Crowley to VP of R&D.
• Marty Kendrick to VP of Operations.
• Jim Stewart to VP of Operations/Nelco Products.
• Tom Pursch to President of Park Aerospace Structures and Park Aircraft Technologies.

Polar Instruments introduced its first standalone Speedstack impedance coupon generator.

PROMATION selected Tonka Electronics as its authorized sales representatives for Minnesota, North Dakota, South Dakota, and parts of Wisconsin.

Rogers introduced RO4000 LoPro (reverse-treated) laminates.

Siemens Canada named Roland Aurich President and CEO.

SIPLACE unveiled new SX placement and MultiStar Collect & Pick & Place machines.

Teradyne cut 350 jobs and reduced executive base salaries by 20 percent.

Thermal Conductive Bonding received Reactive NanoTechnologies’ NanoBond^® process technology license.

Universal Instruments laid off 30 workers at its Conklin and Kirkwood (NY) facilities.

Uyemura:

• achieved ISO 9001:2008 Quality Management certification.
• began distribution of its new Clear Signals PCB newsletter.
• introduced a new, ultra-robust electroless nickel-phosphorus process engineered for EN/gold plating.

Zierick Manufacturing received the Higgins-Caditz award from the Precision Metalforming Association for its new metal-stamping-based interconnect system.

EMS, ODM and related assembly activities

Bulgarian electronics manufacturing market revenues are expected to grow from US$441 million in 2008 and to US$887 million in 2015. - Frost & Sullivan

Indian surface mount technologies market revenues are projected to grow at a 13.2 percent CAGR from $54 million in 2008 to $89 million in 2012. - Frost & Sullivan

The top 50 EMS providers for 2008 grew collectively by 7.7 percent to $158.5 billion. - MMI

Alta Manufacturing and Alta Via Technologies formed an exclusive strategic alliance to develop and implement an innovative PCB technology manufacturing and assembly roadmap.

ACW Technology appointed Jim Davies Business Development Manager and Simon Cruddace International Sales Director.

Alta Manufacturing named Craig Arcuri CEO.

AMAX expanded its Fremont, Calif., operations to 145,000 sq. ft. and completed its Pudong, Shanghai, China facilities.

Bulova Technologies acquired BT Acquisition Corporation.

Celestica’s Monterrey and Reynosa Mexico plants were unaffected by the swine-flu outbreak.

Contac opened a new office in Shenzhen, China.

ControlTek installed KISS-103 Selective Solder technology from ACE Production Technologies.

CT Production purchased an Xpress placement system from Europlacer.

CTS received several electronic throttle control accelerator pedal module manufacturing contracts from a German car manufacturer and Asian customers.

Custom Electronics Integrators received a loan guarantee from The Provincial Government to help it maintain 75 jobs. Da-Tech closed its Raleigh electronics plant.

Elcoteq stopped production at its smallest Pécs, Hungary, plant due to falling orders.

Enics began closing its Vaasa and Jyskä units in Finland, resulting in 150 lay-offs.

Express Manufacturing received ISO 13485:2003 Medical Electronics accreditation.

Flextronics:

• began hiring back 100-200 workers in Zalaegerszeg (western Hungary) to cover a large order.
• elected former Seagate CEO William Watkins to its Board of Directors.
• began building a logistics center in Lodz, Poland.

Foxconn International Holdings (FIH) cut its capex 27.5 percent from US690 million in 2008 to US500 million in 2009.

Foxconn/ Hon Hai:

• Chairman T. Guo deferred retirement until greener times.
• is targeting 30 percent revenue growth for 2009.
• joined the Qseven consortium.
• Juárez, Mexico, factory and warehouse were destroyed by a fire.
• partnered with Quellan on interconnect.
• postponed all the business trips to Mexico to protect employees from swine flu.
• set 2009 Capex at $500 million.
• subsidiary Q-Edge could get incentive package to open assembly and distribution facility in Alliance, Texas. It plans to lease 365,440 sq. ft. in the former Nokia cellphone plant.

GE Healthcare:

• outsourced Milwaukee Tower Ave. PCB production.
• plans to lay-off all 179 employees by the end of the year.

Harris received USD150-million order for portable satellite radios from U.S. Army.

IPC began new statistical program to track worldwide EMS financial metrics.

Jabil Circuit opened a design center in Colorado Springs (USA).

Jurong Technologies sold its two-story Tuas factory for $3.53 million at auction. KCS Electronica Assemblage in Dordrecht purchased three DIMA Modulo pick & place machines and a Solano reflow oven.

Kenmec Mechanical Engineering acquired an 8.41 percent stake in Loyalty Founder Enterprise (LFE) with a NT50 million (US1.48 million) investment.

Key Tronic elected Craig Gates President and CEO.

Kimball Electronics received a contract from V.I.O to manufacture wearable digital camera systems.

LaBarge received a $5.1 million electronic subassembly contract from Bell Helicopter for the V-22 Osprey aircraft program.

MC Assembly achieved ISO 13485:2003 quality certification for its Florida and central Mexico manufacturing facilities.

Nam Tai Electronics closed its Macao office.

OnCore Manufacturing Services (San Jose, Calif.) added a FLEXconveyor from Bliss Industries. PartnerTech laid off 80 in Sieradz, Poland.

Platinum Equity acquired the wire harness and electrical distribution business from Alcoa.

Quanta Computer became GMP (Good Manufacturing Practice) certified by the Department of Health (DOH) of the Taiwan Cabinet.

Raven Industries cut 29 employees in its Applied Technology Division in Sioux Falls.

Sanmina-SCI plans to hire up to 90 employees by the end of this year and rent an additional 25,000 sq. ft. in Kanata, Canada.

Sparton will close its plant at its headquarters in Jackson, Michigan, by June 30, 2009.

Steca Electronics established a sales office in Marostica, Italy.

Suntron received a PCBA contract from Elbit Systems for Heads-Up-Displays.

TRICOR Systems received ISO 13485 medical device certification from NSAI (National Standards Authority of Ireland).

TT electronics:

• Kuantan, Malaysia, facility received ISO 14001 certification for its environmental management system.
• appointed John Bran VP Global Business Development.

TVAB ended production in Töcksfors, Sweden, and transferred production to Poland.

Ultra Electronics opened an engineering services and production hub with two SMT lines, AOI, flying probe, and functional test capabilities near Cambridge, UK.

Zollner Elektronik purchased Juki SMD placement machines.

ZOTAC signed motherboard and graphic card distribution agreements for Al Hasoob in Saudi Arabia.