Dominique K. Numakura's Newsletter from Japan - PWB Market Trends in Asia

Last week, the Japanese Ministry of Economy, Trade and Industry (METI) released the August production numbers for Printed Wiring Boards. This statistical data from the first eight months of 2009 provides us with a pretty good snapshot of market trends and allows us to forecast performance for the remainder of the year.

August shipments for printed wiring boards in Japan totaled 54.553 billion yen, representing a 7.5% decline from the previous month. This decline can be attributed to the week long summer vacation in August; however, comparing August 08 to August 09 shows a decline of 22.9%. The good news is this monthly decline rate has decreased steadily over the year, and most of us predict a positive growth rate will be realized before year's end (comparing month to month).

The other PWB manufacturing countries in Asia experienced the same dramatic drop in business spurred on by the financial crisis in September 2008. Shipments dropped by 60 - 75% during the fourth quarter of last year, but have recovered this year. Market trends for each country is slightly different, but most are trending upward.

Manufacturers from the Korean PWB industry are reporting increased sales over the last several months. The exchange rate for the Korean won against other major currencies is very low making oversees transactions more profitable for manufacturers who export cellular phones and flat panel TVs. PWB manufacturers and material vendors are operating at full capacity to satisfy the strong demands from its domestic customer base. Many of these Korean manufacturers can not accept orders from new customers because they are so busy (lucky them!).

Business from the Taiwanese PWB market has improved significantly over the last three quarters, especially the third quarter. Strong sales from the rapidly evolving category of Netbooks and smart phones are generating a large demand for both multi-layer rigid boards and flexible circuits. Sales forecasts from Taiwanese PWB manufacturers are very optimistic and predict enough activity in the pipeline to keep them busy for the next two quarters. Their plants are currently running at 80-90% capacity, and most expect to be at full capacity for the rest of the year.

Data from the Chinese PWB industry is very difficult to come by; however, the economic stimulus plan launched by the Chinese Government has been working. Imported and exported PWB products have continuously increased over the last three quarters, and most plants have recovered 80 to 90% of their business lost during last year.

Unfortunately, the flowers are not in full bloom for Japanese PWB manufacturers. They continue to dig themselves out of a hole while their Asian counterparts are already seeing the light at the end of the tunnel. Management teams from Japanese PWB manufacturers are not too optimistic for a turnaround by year's end, and some pessimistic forecasts predict another bottoming out for their industry.

Dominique K. Numakura
DKN Research, www.dknresearch.com  

Headlines of the week

NEC Display (Major display manufacturer in Japan) 10/14
Has rolled out a new large size (22" wide) LCD monitor with white LED as the back light source.

LG Display (Major display manufacturer in Korea) 10/15
3rd quarter 2009, revenue increased 54.7% from the same period of 2008 to 5974 billion wons. Income increased 89.5% to 559 billion wons.

Hitachi VIA (Major equipment vendor in Japan) 10/15
Has decided to build a new plant in China for the assembling of NC drilling machines of PWB manufacturing process. The construction will be completed by the end of 2010.

Toyo Seimitsu (Substrate manufacturer in Japan) 10/19
Has developed a substrate construction with heat sink for power semiconductor devices.

Samsung Electronics (Major electronics company in Japan) 10/16
Will invest 800 million dollars to build a new 7.5G LCD manufacturing line in Suzhou Industrial Park, China.

Hitachi Vehicle Energy (Battery supplier in Japan) 10/19
Has completed the construction of the 3G manufacturing line of lithium ion battery with a monthly capacity of 300,000 cells for HEV/EV automobiles.

Sony (Major electronics company in Japan) 10/20
Has commercialized a new digital photo frame series "S-Frame" with color printing functions.

AUO (Major display manufacturer in Taiwan) 10/20
Has demonstrated bendable 20" size e-paper display for signage and e-book applications.

Sanyo Electric (Major electronics company in Japan) 10/21
Has disclosed the expansion plan of the Kase Plant in Hyogo Prefecture to increase the manufacturing capacity of lithium ion batteries for PHEV and BEV.

LG Electronics (Major electronics company in Korea) 10/21
3rd quarter 2009, revenue increased 23.5% from the same period of 2008 to 1.886 trillion wons. Income has doubled to 1810 billion wons.

Sharp (Major electronics company in Korea) 10/22
Has achieved a 35,8 % conversion rate of InG/GaAs/InGaAs based solar cells.

AIST (R&D organization in Japan) 10/21
Has organized a new R&D consortium to develop high-reliability solar cells with 31 companies.