BOSTON, MA – A recent run up in bookings for SMT process equipment is showing no signs of abating, and suppliers say signs point to organic growth in the industry.

Speedline Technologies today reported that second quarter bookings rose 44% sequentially and in July reached their highest level since 2000. At the end of July, backlogs had climbed 68% versus the end of the first quarter. 

Speedline president and chief executive Pierre de Villemejane said in a statement, “We’ve witnessed a major upturn in business since April as large customers increased capital equipment spending to respond to growth in the consumer electronics and automotive industries.”  The company has seen strong demand for its new printers and dispensers, he said.

Many industry observers expected equipment sales to be brisk in 2005 and early 2006 as manufacturers transition to lead-free processes. Indeed, de Villemejane said the trend is boosting healthy global demand for new capital equipment. Yet there are clear signs of underlying strength to the market.

BTU International, in one of the industry’s dramatic turnarounds, has posted three straight profitable quarters. Net sales for the first half of 2005 were up 12% to $28.6 million. Company officials on Tuesday told Circuits Assembly that the replacement market for tin-lead soldering equipment is still growing, with North America lagging Japan and Europe. And de Villemejane today told Circuits Assembly, “Lots of sales are for expansion, not replacement. We’re not at the peak yet for replacement equipment.”
 
Demand has come from most corners, with Brazil a pleasant surprise. de Villemejane said Speedline’s European bookings surged at the end of the second quarter, after a slow first half. Hungary, Turkey and Russia remain bright spots as investment continues in those countries’ electronics manufacturing sectors. Germany also showed strength.

“The Americas have been strong since the first quarter, with Brazil making a major rebound and Mexico improving,” de Villemejane said. “Asia was sluggish in the first quarter, but bookings were strong throughout the second quarter with China leading the way.”

Likewise, BTU is seeing a spike in Brazil. According to chairman and chief executive Paul van der Wansem, that the surge in Brazil is across the board, with demand coming from Asian and North American manufacturers and local companies. The company is tripling the size of its operations in Shanghai to help meet future demand. However, demand in Mexico has been erratic, the company said.

Speedline predicts demand will remain high through the end of the year. “We will see seasonal strength in the third quarter when bookings tend to peak,” de Villemejane said.  “But with the lead-free manufacturing trend expanding, and our exciting stream of new products entering the market, we anticipate robust performance through the end of the year.”

BTU projects compound annual growth in SMT equipment on the order of 12% through 2009, and a CAGR for bump reflow machines of more than 30%.