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WASHINGTON -- Industry business leaders are calling on Congress to renew the depreciation laws tied to the Economic Stimulus Act of 2008, which allowed companies to reduce the time it take to recoup outlays for capital equipment.
"A strong manufacturing sector is critical to a rapid economic recovery," wrote Matthew Holzmann, president of Christopher Associates, in one letter. "It would seem from the headlines that only certain industries would benefit from many of the proposals in Congress at present. Reinstatement of accelerated depreciation, especially as written in H.R. 5150, will help all industries and is a real, tangible tool for keeping America strong."
ARLINGTON, VA -- Electronic component orders fell in December for the second consecutive month, according to the monthly index compiled by the Electronic Components Association (ECA).
The 12-month average, comparing 2008 results to those from 2007, continued a descent that began this summer.
“Most manufacturers have seen declining results in November and December,” says Bob Willis, ECA president, in a press release. “There may be a modest positive bump in the first quarter of 2009 as inventories are adjusted, but there is little or no significant growth anticipated until the late third or fourth quarter.”
The 12-month average, comparing 2008 results to those from 2007, continued a descent that began this summer.
“Most manufacturers have seen declining results in November and December,” says Bob Willis, ECA president, in a press release. “There may be a modest positive bump in the first quarter of 2009 as inventories are adjusted, but there is little or no significant growth anticipated until the late third or fourth quarter.”
SINGAPORE -- A local union of electronics workers says 2,000 more layoffs are expected this quarter. That almost equals the sum -- 2,300 -- of the union's layoffs from all of last year.
The United Workers of Electronic and Electrical Industries union says many of the displaced electronics workers will be retrained to find jobs in the medical and hotel industries.
The United Workers of Electronic and Electrical Industries union says many of the displaced electronics workers will be retrained to find jobs in the medical and hotel industries.
RONKONKOMA, NY – CVD Equipment Corp. said 2008 order levels reached $29 million, more than double the order levels of 2007. The company’s divisions include Conceptronic, a maker of reflow ovens.
Approximately half the orders in 2008 were solar and energy market-related, with most incorporating CVD thin film solutions, says the firm.
Last year’s order levels for the CVD/FN and SDC divisions increased 146% and 58%, respectively, while the Conceptronic division decreased 3% year-over-year.
The company anticipates the growth trend of the CVD/FN and SDC divisions to continue. The Conceptronic division was impacted by the downturn in the electronics industry over the last two quarters. CVD expects this trend to continue at least through the first two quarters in 2009.
DORSET, UK – Placement equipment OEM Europlacer reported 22% growth globally during 2008 on the strength of its iineo machine platform.
For 2009, the privately held Europlacer says it will continue to offer products for unpredictable environments.
For 2009, the privately held Europlacer says it will continue to offer products for unpredictable environments.
BRIDGEWATER, MA -- Chase Corp., a supplier of conformal coatings and EMS services, today reported net
income of $2.3 million for its November quarter, down 35% from last year. Revenues
dropped 10% to $31.1 million.
SCOTTSDALE, AZ — Sales of electronics systems will fall 2% worldwide this year before recovering in 2010, according to a recent forecast by IC Insights.
The research firm, which concentrates on the semiconductor market, forecasts the value of shipments in 2009 will drop to $1.23 trillion, then rise 7% in 2010.
TAIPEI -- Foxconn today reported December revenue fell 18.2% year-over-year to NT$122.2 billion ($3.68 billion).
The company, the world's largest EMS provider, ended calendar 2008 with unaudited sales of $44.4 billion, roughly 30% larger than the estimated revenues of No. 2 Flextronics, which has yet to report.
The company, the world's largest EMS provider, ended calendar 2008 with unaudited sales of $44.4 billion, roughly 30% larger than the estimated revenues of No. 2 Flextronics, which has yet to report.
OXFORD, CT – AOI provider Mirtec Corp. reported 34% growth in fiscal 2008 sales for its North American sales and service division. The Korean-based company is privately held.
Brian D’Amico, president of Mirtec, attributes the growth to the industry-wide acceptance of the firm’s AOI product line. He noted it was a “year of recognition in which Mirtec received a total of three industry awards for our AOI product line,” including Circuits Assembly’s NPI Award.
When asked about anticipated revenue for fiscal 2009, D’Amico said, “I think it almost goes without saying that the current market conditions and economic climate will be a challenge for our organization as well as the world around us. With that said, I am extremely thankful that our business has continued to prosper over the last several months. I am hopeful we will continue to prosper and benefit from any challenges we may encounter in the upcoming year.”
EL SEGUNDO, CA – Global DRAM revenue will fall 19.8% year-over-year in 2008 to $25.2 billion, the second down year in a row, following a 7% drop in 2007, says iSuppli Corp.
Unfortunately, this decline won't mark an end to the memory sinkhole just yet. The troubled DRAM market is expected to suffer a revenue decline of 4% in 2009 as a result of global economic uncertainty.
“In the multibillion DRAM industry, many suppliers have engaged in massive spending programs in a bid to increase capacity and take market share from competitors,” said Nam Hyung Kim, director and chief analyst of memory ICs and storage for iSuppli Corp. “Using this strategy, DRAM makers hoped that their competitors would be forced to back out of the spending race and concede market share. However, in 2008, no one won this game of chicken, with players continuing their massive spending drive amid weakening demand, contributing to oversupply, price declines and a massive market downturn that is hurting all suppliers.”
The three-year decline contrasts sharply with market conditions in the mid 2000s, which delivered growth of 52.9% in 2004 and 35.2% in 2006, says the firm.
“The industry, which has been in decline for seven straight quarters, is in a state of emergency with massive layoffs and production cuts,” Kim observed. “The Top-8 DRAM suppliers have lost nearly $8 billion since 2007, and their total operating loss is expected to amount to $11 billion by the end of next year.”
After massive losses in 2001, the overall DRAM business had accumulated profits until 2006. At the same time, DRAM makers increased capital expenditures by more than threefold, rising to $21.1 billion in 2007, up from $7 billion in 2001. Since 2000, the DRAM industry has spent more than $100 billion, which is almost double the level of the Top-8 suppliers' combined market capitalization today, according to iSuppli.
“Three Taiwan-based DRAM suppliers – whose total market capitalization now is around $1.4 billion – have spent a total of more than $20 billion on capital expenditures since 2000, which represents an enormous over-investment during the period,” Kim said. “Furthermore, most capital expenditure money has been raised by issuing debt among many suppliers. The frozen credit market is punishing suppliers that need additional cash not for investment, but for their very survival.”
The industry's DRAM bit production growth rate didn't slow down, even with a 48% capital expenditure reduction this year, showing how much investment already was made,” Kim said. “This indicates an additional capital expenditure cut is inevitable in the near future.”
There are no winners among the DRAM suppliers, says iSuppli. The industry leader, Samsung Electronics, which has spent about $27 billion on DRAM manufacturing investments since 2000, holds the same DRAM market share this year as it did in 2000, at about 30%. The South Korean memory giant in the fourth quarter of 2008 likely lost money in its DRAM business amid oversupply and the global economic slowdown.
Four DRAM suppliers now are seeking government bailout packages: Powerchip, Promos, Nanya and Qimonda.
Hynix is close to finalizing an additional rescue package of $600 million from its creditor, KDB, according to a local Korean newspaper. The double whammy of over-investment and the global credit crunch clearly has impacted the industry badly, and the prices remain below variable costs for DRAM suppliers, says the research firm.
Despite unhealthy economic conditions and an unclear demand picture, iSuppli cautiously predicts the market will turn around in the second half of 2009 because of suppliers' rapid reduction in capacity growth. In the near-term, iSuppli believes prices will stabilize from the current level, and suppliers' losses will be reduced regardless of whether suppliers receive rescue packages from other parties.
“Until that time, the game of chicken has turned into a game of survival – a situation that will persist for months to come,” Kim said.
Unfortunately, this decline won't mark an end to the memory sinkhole just yet. The troubled DRAM market is expected to suffer a revenue decline of 4% in 2009 as a result of global economic uncertainty.
“In the multibillion DRAM industry, many suppliers have engaged in massive spending programs in a bid to increase capacity and take market share from competitors,” said Nam Hyung Kim, director and chief analyst of memory ICs and storage for iSuppli Corp. “Using this strategy, DRAM makers hoped that their competitors would be forced to back out of the spending race and concede market share. However, in 2008, no one won this game of chicken, with players continuing their massive spending drive amid weakening demand, contributing to oversupply, price declines and a massive market downturn that is hurting all suppliers.”
The three-year decline contrasts sharply with market conditions in the mid 2000s, which delivered growth of 52.9% in 2004 and 35.2% in 2006, says the firm.
“The industry, which has been in decline for seven straight quarters, is in a state of emergency with massive layoffs and production cuts,” Kim observed. “The Top-8 DRAM suppliers have lost nearly $8 billion since 2007, and their total operating loss is expected to amount to $11 billion by the end of next year.”
After massive losses in 2001, the overall DRAM business had accumulated profits until 2006. At the same time, DRAM makers increased capital expenditures by more than threefold, rising to $21.1 billion in 2007, up from $7 billion in 2001. Since 2000, the DRAM industry has spent more than $100 billion, which is almost double the level of the Top-8 suppliers' combined market capitalization today, according to iSuppli.
“Three Taiwan-based DRAM suppliers – whose total market capitalization now is around $1.4 billion – have spent a total of more than $20 billion on capital expenditures since 2000, which represents an enormous over-investment during the period,” Kim said. “Furthermore, most capital expenditure money has been raised by issuing debt among many suppliers. The frozen credit market is punishing suppliers that need additional cash not for investment, but for their very survival.”
The industry's DRAM bit production growth rate didn't slow down, even with a 48% capital expenditure reduction this year, showing how much investment already was made,” Kim said. “This indicates an additional capital expenditure cut is inevitable in the near future.”
There are no winners among the DRAM suppliers, says iSuppli. The industry leader, Samsung Electronics, which has spent about $27 billion on DRAM manufacturing investments since 2000, holds the same DRAM market share this year as it did in 2000, at about 30%. The South Korean memory giant in the fourth quarter of 2008 likely lost money in its DRAM business amid oversupply and the global economic slowdown.
Four DRAM suppliers now are seeking government bailout packages: Powerchip, Promos, Nanya and Qimonda.
Hynix is close to finalizing an additional rescue package of $600 million from its creditor, KDB, according to a local Korean newspaper. The double whammy of over-investment and the global credit crunch clearly has impacted the industry badly, and the prices remain below variable costs for DRAM suppliers, says the research firm.
Despite unhealthy economic conditions and an unclear demand picture, iSuppli cautiously predicts the market will turn around in the second half of 2009 because of suppliers' rapid reduction in capacity growth. In the near-term, iSuppli believes prices will stabilize from the current level, and suppliers' losses will be reduced regardless of whether suppliers receive rescue packages from other parties.
“Until that time, the game of chicken has turned into a game of survival – a situation that will persist for months to come,” Kim said.
SEOUL -- Yet another attemped sale of Daewoo Electronics has fallen through, and the tight credit market may discourage other potential buyers from the company, which is valued at around $500 million. The breakdown may mean restructuring for the company.
TOKYO — TDK Corp. will lay off 8,000 workers and close four factories in response to a plunge in revenues.
TDK had 65,500 workers worldwide as of the end September quarter.
