News
Sales increased 34.2% from last August, in line with historical patterns.
"Semiconductor producers and their customers have reacted with unprecedented speed to recent reports of excess chip inventories," said SIA president George Scalise, in a press statement. "In previous market cycles, it has generally taken several quarters for the supply chain to take corrective action. When the first reports of excess inventory accumulation surfaced in the second quarter, both producers and customers moved quickly to adjust.
A pair of research groups, VLSI Research and iSuppli, are now reporting that chip inventories are declining, Scalise said.
Capital spending at IC makers is about 23% of sales, in line with historical patterns, SIA said. "At this time, we do not believe overcapacity will be a major concern in 2005," SIA said.
SIA reiterated its forecast of 28% growth for 2004. Its 2005 industry forecast will be released Nov. 3.
Sales of PCs and equipment for networking and telecommunications contributed to semiconductor growth in August. Sales of microprocessors increased 3.5% sequentially, reflecting PC sales patterns of the back-to-school season.
Chip sales were up modestly in all geographic regions. In Asia-Pacific, sales increased just 0.1% sequentially, reflecting the impact of inventory adjustment actions taken by OEMs, SIA said.
NEW YORK, Oct. 1 -- Flextronics is poised to gain market share from competitors Sanmina-SCI and Solectron, says an analyst who met with the EMS maker yesterday.
Thanks to a combination of the lowest-cost footprint and the most robust design offering in the industry, Flextronics is evolving into a design and component manufacturer that also offers EMS services, wrote Chris Whitmore, an analyst with Deutsche Bank's Equity Research group. In fact, wrote Whitemore, Flextronics "suggested that it could give away the assembly business for free if customers opted to use its competitively priced components."
"We remain confident in Flextronics` long-term vision and strategic direction," Whitmore wrote. He said Flextronics' vertical strategy and low-cost assets is "driving its customers' costs lower --faster than anyone else in the industry."
In other news from the analyst day, Flextronics said it is in the process of consolidating roughly $1.3 billion of business from other EMS suppliers into its existing manufacturing facilities, to the detriment of Sanmina-SCI and Solectron, according to DB.
NORTHBROOK, IL, Aug. 27 -- August orders for rigid circuit boards rose 8.7% while demand for flex circuits showed signs of weakness, according to the latest 90-day moving average of North American manufacturers.
"Both rigid and flex shipments are rebounding from the recession and are showing strong growth, but flex is growing at a faster rate than rigid," IPC said in a press release.
For all board types, shipments rose 33.6% and bookings were up 9.8% vs. a year ago, said IPC, which administers the monthly poll. The figures may include some sales of products built offshore and brokered by the surveyed companies.
The August book-to-bill ratio was 1.05 for rigid, up 0.06 points sequentially. The B2B for flex circuits fell precipitously, from 1.57 last month to 0.98 in August.
The book-to-bill for all board types rose fell 0.06 points to 1.04.
The ratio is calculated by averaging the number of orders booked over the past three months and dividing by the average sales billed during the same period. A ratio of 1.04 means that for every $100 in shipments, $104 worth of PCBs were booked. An increasing ratio is generally considered a sign of a market poised to rise.
Year-to-date shipments are up 34.7% and bookings are up 38%. Combined August shipments rose 13.8% sequentially, while bookings fell 0.3%.
August rigid shipments were up 21.9% and bookings 8.7% over last year. Year-to-date, rigid shipments are up 25.1% and bookings are up 21.1%. Among those surveyed, rigid shipments rose 15.2% sequentially and bookings were 7.6% higher.
August flex shipments were up 75.2% yet bookings slumped, falling 19.3% vs. last year. Year-to-date, flex shipments are up 77.4% and bookings 100.7%. Sequentially, flex shipments rose 8.5% and bookings dropped 27.1%.
Flex sales, which include some value-added services, make up about 17% of total PCB sales in the IPC poll.
The data come from a sample of North American rigid and flexible PCB manufacturers.
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