IPC PCB results for September 2007 - book to bill up to 1.08
Nov 01, 2007
PCB Industry Growth Rates and Book-to-Bill Ratios Announced
Rigid PCB shipments are down 6.5 percent, but bookings are up 16.4 percent in September 2007 from September 2006. Year to date, rigid PCB shipments are down 9.9 percent and bookings are down 10.4 percent. Compared to the previous month, rigid PCB shipments increased 11.3 percent and rigid bookings increased 15.2 percent. The book-to-bill ratio for the North American rigid PCB industry in September 2007 climbed to 1.08.
Flexible circuit shipments in September 2007 are down 15.8 percent and bookings are down 2.8 percent compared to September 2006. Year to date, flexible circuit shipments are down 6.7 percent and bookings are up 5.3 percent. Compared to the previous month, flexible circuit shipments increased 5.8 percent and flex bookings are down 10.1 percent. The North American flexible circuit book-to-bill ratio rose to 1.08 in September.
For rigid PCBs and flexible circuits combined, industry shipments in September 2007 decreased 7.1 percent from September 2006, and orders booked increased 15.2 percent from September 2006. Year to date, combined industry shipments are down 9.7 percent and bookings are down 9.5 percent. Compared to the previous month, combined industry shipments for September 2007 are up 11.0 percent and bookings are up 13.6 percent. The combined (rigid and flex) industry book-to-bill ratio in September 2007 grew to 1.08.
"Although industry sales in North America are still about 10 percent lower than last year, the book-to-bill ratio has climbed steadily over the past three months," said IPC President Denny McGuirk. "Based on this indicator and seasonal trends, we expect sales to strengthen in the last quarter of this year," he added.
The book-to-bill ratios are calculated by dividing the value of orders booked over the past three months by the value of sales billed during the same period from companies in IPC's survey sample. A ratio of more than 1.00 suggests that current demand is ahead of supply, which is a positive indicator for sales growth over the next two to three months.
Book-to-bill ratios and growth rates for rigid PCBs and flexible circuits combined are heavily affected by the rigid PCB segment. Rigid PCBs represent an estimated 88 percent of the current PCB market in North America, according to IPC's World PCB Production and Laminate Market Report for the Year 2006.
The Role of Domestic Production
IPC's monthly survey of the North American PCB industry tracks bookings and shipments from U.S. and Canadian facilities, which provide indicators of regional demand. These numbers do not measure U.S. and Canadian PCB production. To track regional production trends however, IPC asks survey participants for the percent of their reported shipments that were produced domestically (i.e., in the USA or Canada). In September 2007, 84 percent of total PCB shipments reported were domestically produced. Domestic production accounted for 84 percent of rigid PCB and 82 percent of flexible circuit shipments in September by IPC's survey participants. These numbers are significantly affected by the mix of companies in IPC's survey sample, which remains constant throughout each calendar year, but may change with the January survey results.
Bare Circuits Versus Assembly
Flexible circuit sales typically include value-added services such as assembly, in addition to the bare flex circuits. In September, the flexible circuit manufacturers in IPC's survey sample indicated that bare circuits accounted for about 84 percent of their shipment value reported for the month. Assembly and other services make up a large and growing segment of flexible circuit producers' business. This figure is also sensitive to changes in the survey sample, which may occur at the beginning of each calendar year.
Interpreting the Data
Year-on-year and year-to-date growth rates provide the most meaningful view of industry growth. Month-to-month comparisons should be made with caution as they may reflect cyclical effects. Because bookings tend to be more volatile than shipments, changes in the book-to-bill ratios from month to month may not be significant unless a trend of three consecutive months or more is apparent. It is also important to consider changes in bookings and shipments to understand what is driving changes in the book-to-bill ratio.
The information in IPC's monthly PCB industry statistics is based on data provided by a representative sample of both rigid and flexible PCB manufacturers in the USA and Canada. IPC publishes the PCB Book-to-Bill Ratio and the Interconnect Manufacturing Services (IMS) Business Report each month. Statistics for the previous month are not available until the last week of the following month.