Dominique Numakura's Newsletter from Japan

May PWB Production in Japan

The Japanese Ministry of Economy, Trade and Industry (METI) released the May PWB production data last week. The data suggests this month was not historically typical compared to past months relative to PWB shipments.

Usually, May shipments for Japanese PWB manufacturers rebound after a remarkable drop in April due in part because it's the first month of the fiscal year. PWB manufacturers' total revenue for May's shipments was 80.28 billion yens, representing a 5% decline from April; however, compared to May 2006, revenue increased by 7.9%. Total revenue year to date through May reached 80.773 billion yens.

The most significant segment contributing to the decline in May's volume was multi-layer rigid circuit board. Total revenue for rigid circuit boards in May was 48.329 billion yens. This calculates to a 7.8% decline for April and 1.1% increase from the same month of 2006. The core products, 4 layer, 6 - 8 layer and build-up boards posted revenue and volume declines since April; however, the rate of decline in volume is much smaller than the rate of decline in revenue.

Unfortunately, this means unit selling prices have dropped significantly. May's revenue from single sided, double sided boards and high layer count boards remained flat compared to April. Not having a jump in volume during May is not typical.

Flexible circuits have posted results and show two different trend lines for single side circuits and double/multi-layer circuits. Total revenue for flexible circuits in May was 11.976 billion yens; a 2.4% increase from April and 11.2% growth from the same month of 2006. Double side and multi-layer circuit had 4.4% increase from April and a 19.5% growth compared to the same month last year. The average selling prices have remained at record high levels over the last four months, indicating that the flexible circuit segment is trending upward. On the other hand, data from the single side flexible circuits segment suggest a downward trend in volume and revenues. May revenue declined 1.3% from April and 2.2% compared to the same month in 2006, and volume declined also but at a lesser percent compared to revenue. Accordingly, selling prices for single side flexible circuits were at record lows over the last four months. The data also suggests there is no rebound for revenue or volume in the near future.

Module substrates posted moderate results in May. Total revenue in May was 19.842 billion yens; a 1.5% decrease from April, but a 27.1% increase from the same month in the previous year. Most of the growth came from the rigid IC substrates. They had dramatic growth during the second half of 2006; nowadays, things are still busy but stable. The other module substrates posted small declines for May revenues compared to April; however, compared to May 2006, they enjoyed a 7.5% growth. May production volume increased by 21.9% compared to May 2005. This means the average selling prices of the other module substrates experienced a significant drop over the last year. Major applications for substrates are mostly flat panel displays. Since the manufacturers have lowering their retail prices to increase their volumes, this may have contributed to the decline in prices for modular substrates.

During the JPCA Show 2007 held in Tokyo seven weeks ago, industry experts were extremely optimistic about the long term health for both the technologies and business segments. However, our optimism may have waned temporarily since the future seems very unclear over next few months.

Dominique Numakura


Headlines of the week

Furukawa Circuit Foil (Copper foil supplier in Japan) 7/17
Will invest 6 billion yens to build the fifth copper foil plant with a monthly capacity of 2.5 million square meters. The new plant will start the production next spring.

Sony (Major electronics company in Japan) 7/17
Will commercialize high resolution CMOS image sensors with 8 million pixels for the cellular phone applications.

Canon MJ (Device manufacturer in Japan) 7/17
Has unveiled the new portable storage device with 80 GB disc drive for Canon's digital camera series EOS Digital.

Sumitomo Chemical (Major chemical company in Japan) 7/17
Will invest another 1.5 billion yens to expand the manufacturing capacity of optical plates for PDP panels in the new plant in Poland.

Sangyo Times (Major industry media in Japan) 7/18
Several circuit manufacturers have been starting the business of embedded WLP circuit board in Japan. CMK, Dai Nippon Printing, TNSCi, Fujikura, Glober Electronics, Ibiden and more.

CMK (Major PWB manufacturer in Japan) 7/18
Has forecasted 133 billion revenue with 6.2 billion income for the fiscal year of 2007.

Hitachi Printed Circuit Solution (Major PWB manufacturer in Japan) 7/18
Has reported 5.74 billion yen revenue for the fiscal year of 2006, 34% growth from the previous year. High end server applications made the majority of the growth.

Kami Denki (Board assembler in Japan) 7/18
Will build a new assembling plant in Kyoto with design department for the industrial applications.

YAMAHA (Major equipment manufacturer in Japan) 7/18
Has commercialized a new low cost screen printer "YCP" for the printing process of solder paste in the SMT assembling lines. It focus medium size circuit board to reduce the cost.

Sony (Major electronics company in Japan) 7/18
Has been developing a flexible full color display technology with organic TFT organic EL.

Showa Denko (Major chemical company in Japan) 7/18
Will invest 5 billion yens to double the manufacturing capacity of blue color LED devices for the back light applications of the LCD panels.

Hitachi Chemical (Major electronics material supplier in Japan) 7/18
Will increase the selling price of the copper laminates and prrepreg sheets 10 to 15% for PWB applications from August 20.

TMD (Major display device manufacturer in Japan) 7/20
Has unveiled a new hybrid LCD panel with high sensitivity touch panel.