Dominique Numakura's Newsletter from Japan

Very little good news from Japan

I have been pointing out several down turn signs in the Asian electronic market since last summer. Unfortunately recently, it became realistic.  Most of the electronic products made record shipment in the first half the last year. But they have declined significantly in the second half.  The market slow down of the cellular phones in Korea and Japan is the major reason.  Probably, weak demands of the notebook computers are next. The digital cameras and flat panel TVs are still growing. But, their growth rates have been becoming smaller.

Accordingly, the shipments of the circuit boards including flex circuits have been declining remarkably since last autumn. Many material suppliers for the industry have been reducing their businesses recently. They are expecting serious price down in the near future because of the new competitors. It was only a half year ago, it was a typical seller's market.  The sales people of the material manufacturers were visiting the customers to refuse the order and to increase the prices. Nowadays, it has changed to a buyer's market.  The sales people have been thinking a remarkable price reduction would get more orders.

The market analysts have been explaining that the down turn of the market will not last very long because of the small inventories in the market. But they made the same comments at the beginning of the long depression.

Dominique Numakura

Headlines of the week

Semiconductor Industry News (Industrial newspaper in Japan)
Major multi-layer board manufacturers in Korea have been planning large investments in 2005 to increase the capacity significantly. They were expecting large demands by new models of the camera cellular phones.

Shinko Electric (Major packaging material supplier in Japan)
Is expecting a 23% revenue growth in the 2005 fiscal year. But the company is concerned about the remarkable slow down of the market in the second half.

Ibiden (The largest PWB manufacturer in Japan)
Is planning to invest 23 billion yen for the 2005 fiscal year.  It is 2 billion Yen smaller than the previous plan because of the down turn demands.

JVC (Major electronics company in Japan)
Developed the new optical record disc for the next generation DVD. A two hour movie can be recorded in one disc.

Matsushita Electric Works (The largest PWB laminate manufacturer)
Will re-organize the electronic material business. The laminate business will be transferred to the new manufacturing/marketing subsidiary.
 
Nikkei Electronics (Industrial magazine in Japan)
November sales of the home electronics in Japan declined more than 5% from the same month of 2003.  Only DVD, TV and office equipment grew more than 10%.
     
Nippon Electric Glass (Major glass manufacturer in Japan)
Will found a new manufacturing subsidiary of glass substrates in Korea for the growing LCD market. Annual capacity: 3 million square meters.

Nikkei Keizai Shinbun (Major newspaper in Japan)
Reported that the major equipment manufacturers for the LCD lines has been expanding the capacities. Mitsubishi, Sumitomo Heavy Industry, etc.

Chunghwa Picture Tubes (Major display manufacturer in Taiwan)
Will invest 220 billion NT$ for the 7th generation LCD manufacturing process.  The budget was reduced from the original amount, 420 billion NT$.

ULVAC (The largest vacuum equipment manufacturer in Japan)
Decided to invest another 3 million US$ for the China plant to expand the service capabilities in the area.

ShinEtsu Semiconductors (The largest Si wafer supplier)
Will invest 100 billion yen in Japan and U.S. to expand the capacity of the 300 mm wafers. The total capacity will be 700k wafers per month in 2007.

IPS Alpha Technology (New LCD manufacturer in Japan)
Was founded as the joint venture of Hitachi, Matsushita and Toshiba. It will start the production of a large size LCD panel in 2006.