ECA Order Index Growth Continued in March
The monthly order index compiled by the Electronic Components, Assemblies & Materials Association (ECA, Arlington, VA) continued its slow upward movement in March, creating hopes that profits will follow.
"We're continuing to see a gentle increase that is consistent with our conversations with manufacturing executives," said Bob Willis, ECA president. "The prevailing hope from manufacturers is that average selling price (ASP) will begin to rise in concert with sales."
According to Willis, manufacturers are reporting some isolated supply shortages, which could spur demand and raise ASPs. Recently, UBS Securities reported that multi-layer chip capacitor (MLCC) supply is expected to fall short of demand in the second half of 2004, which could create a 5 to 15% price increase. In other areas, however, even substantial growth will not ease price pressures. Market researcher IDC predicts a compound annual growth rate of 15% for LCD panels between 2003 and 2007, with 56% growth in 2004 alone. But, IDC predicts the market will be oversaturated during that period, leading to price erosion.
The ECA represents manufacturers and producers of passive and active electronic components, component arrays and assemblies, and materials and support services. It is a sector of the Electronic Industries Alliance (EIA), comprising more than 2,100 members that reportedly represent 80% of the $430 billion U.S. electronics industry.
Copyright 2004, UP Media Group. All rights reserved.
