MACAO – Deswell Industries Inc. reported fiscal second-quarter nets sales of $32 million, down 16.1% year-over-year, mainly because of the continuing decline in business from the company's electronic and metallic segment.

The firm reported an operating loss of $1.7 million for the quarter, compared to operating income of $1.7 million for the same quarter of 2007.

Gross profit in the electronic and metallic segment was 11.1% of net sales, compared to 11.6% of net sales for the year-ago quarter.

Net sales for the six months ended Sept. 30 were $67.3 million, down 12.5% year-over-year.

Net income decreased $5.2 million to a loss of $382,000, compared to $4.9 million last year.

Deswell manufactures injection-molded plastic parts, components, electronic products, subassemblies and metallic products for OEMs and contract manufacturers.

EL SEGUNDO, CA – With car sales plunging, demand for automotive electronics is dropping as well, except for the key area of electronic stability control systems, whose sales are expected to continue to rise in the coming years. This will generate attractive opportunities for suppliers of microelectromechanical sensors used in these systems, according to iSuppli Corp.

iSuppli recently reported that 2008 is expected to be the worst year in nearly a generation for the U.S. car market, with shipments of just 13.3 million units, down 17.7% year-over-year. Western European auto sales are expected to decline to 15.4 million, down 8.2% compared to 2007.

However, worldwide penetration of ESC technology in new cars will grow to 57% in 2012, up from 28% in 2006, says the firm.

“Shipments of ESC systems and associated MEMS will continue to rise, despite the current downturn, due to government mandates requiring stability control in the United States and later in Europe. This provides opportunities for at least six players new to the ESC market, either in development or sampling gyroscopes, and likewise four companies developing product for accelerometers. We expect the new offerings may begin in the truck market before attacking the large automotive OEMs,” said Richard Dixon, senior analyst, MEMS for iSuppli.

VTI Technologies was the leader in MEMS accelerometers in 2007 with a 53% share of industry revenue. VTI supplies all the MEMS accelerometers used by Continental Automotive Systems, the leading supplier of ESC systems.

Bosch is in second place, supplying accelerometers for its own systems and to Mobis. It held a 29% share of ESC accelerometer revenue last year, according to iSuppli.

Systron Donner was the gyroscope market leader with a 44% share of revenue in 2007. Bosch was second last year, with 30% of revenue as a result of sales of gyroscopes for its own ESC systems.

However, the company to watch in this segment is Panasonic, says iSuppli, which held the No. 4 rank for ESC gyroscope revenue last year. The firm managed to surpass Silicon Sensing Systems in unit shipments, giving it the No. 3 ranking based on volume.

“Panasonic is on the rise in the ESC gyroscope market with a robust and inexpensive new gyroscope, and could jump several more places in the next five years,” Dixon said.

In 2007, Bosch led the pressure sensor market with 54% share of revenue. Sensata, a 2006 spin-off from Texas Instruments Inc., is the second major player with a 34% share of revenue, with Denso a distant third place, says the research firm.

SCOTTSDALE, AZ – With economic conditions remaining shaky through most of 2009, personal computer sales are forecast to suffer a rare-but-modest decline next year, and PC unit growth is expected to slow down to about half the rate seen in 2008, according to IC Insights.

In 2009, however, shipments of portable notebook computers are expected to exceed desktop PCs for the first time ever. Notebook PC shipments are projected to rise 13% to 156 million systems in 2009, versus a 3% decline for desktop systems to 143 million, says the research firm. Worldwide shipments of notebook computers are expected to reach 264 million in 2012 compared to 178 million desktop PCs.

Overall PC dollar volumes are forecast to decline 3% next year to $240 billion. While market conditions will remain weak through much of 2009, IC Insights does not believe the PC segment will suffer a protracted downturn, as was the case in the 2001-2002 recession. Supply-chain inventories did not grow out of control in 2008, and PCs are more pervasive than they were at the start of this decade. Growing demand for low-cost systems in developing regions is also helping offset some weakness in the U.S., European, and Japanese markets. PC revenues are now forecast to rebound by more than 9% in 2010 to about $263 million. PC unit growth is also expected to surge back in 2010 with shipments rising 15% to 350 million systems worldwide compared to a projected 5% increase in 2009.

During the 2009 slowdown year, PC integrated circuit sales will fall 6% to $66.4 billion, the firm says. IC sales for PCs dropped 3% in 2008 to an estimated $70.4 billion after slipping 4% in 2007 to $72.3 billion, mainly as a result of price erosion in DRAMs and x86 central microprocessors sold by Intel and rival Advanced Micro Devices. IC sales are expected to rebound in 2010, reaching an annual record high of $83 billion in 2011.

BRUSSELS – The European Commission issued a proposal to revise the EU’s RoHS Directive.

The proposal is expected to enter into force at the end of 2011 and links future assessment of substances under RoHS to the principles behind the EU’s REACH chemicals policy. It does not add any new substances to the restrictions list. 

However, the proposal is said to fall short of achieving scientific and regulatory consistency, according to the European Brominated Flame Retardant Industry Panel. The proposal contradicts the EU’s existing chemicals policy by restricting use of the flame retardant Deca-BDE, despite an EU risk assessment concluding there is no need for any such restriction, says EBFRIP. 

TAIPEI – Third-quarter contract DRAM prices fell, down 34% sequentially, with spot prices down 52%, says DRAMeXchange.

The research firm estimates the global DRAM market will reach $23.2 billion in 2008, down 24.7% compared to 2007. Average selling prices will drop 55%, says DRAMeXchange.

Revenues, excluding OEMs, were $6.35 billion in the third quarter, down 2.4% sequentially.

Samsung has reportedly taken a leading 23.9% share of the global market, down 9.9% compared to the prior quarter. Nanya, ranked no. 6, was the only company to have increased revenues significantly, to $350 million, up 31.6%, says the research firm.

Powerchip, in 7th place, had the largest sequential decline, down 16.3% to $254 million.

Qimonda recorded an increase of 2.2%, to $613 million, putting the firm in fifth position. Hynix remains in second, with a market share of 20.5%, followed by Elpida (16%) and Micron Technology (12.3%).

Micron's share is expected to rise dramatically in 2009 with its purchase of Inotera and its licensing deal with Nanya.

DRAMeXchange suggests Samsung was the only DRAM player to record profits in the third quarter.

MADISON, AL – STI Electronics Inc. says it provides evaluation and detection of counterfeit components.
 

STI’s analytical laboratory offers various services to investigate for counterfeit devices. Some of these services include functional testing, optical inspection, x-ray analysis, FT-IR testing, elemental surface analysis (SEM/EDS) and chemical mechanical decapsulation.

The firm also provides training, distribution, consulting, laboratory analysis, prototyping, and PCB assembly.

ENDICOTT, NY – Endicott Interconnect Technologies Inc. has been awarded a $12 million research and development contract by the U.S. Department of Defense to continue development of electronic packaging technologies, including PCBs and organic substrates for a super computer application.

BOONTON, NJ – The worldwide telecommunications industry is expected to continue expanding during the next five years, as continuing growth of wireless services in emerging markets offsets the spending slowdown in the advanced economies, says Insight Research Corp.

Overall telecommunications services revenues are expected to grow at a compounded rate of nearly 10.3% during the next few years, reaching $2.7 trillion by 2013, says the firm.

“Wireless makes the strongest showing, while wireline follows a distant second. Nearly all of the growth in both sectors is expected to occur in broadband services, with wireless broadband service revenues expected to grow at a compounded rate of more than 70% over the forecast period, while wireline broadband services grow at under 10% over the same forecast horizon,” said president Robert Rosenberg.

EL SEGUNDO, CA – In the third quarter of 2008, the mobile-device market contracted slightly, ending with 316.7 million units, down 1.1% sequentially, says iSuppli Corp. Mobile handsets, which account for the vast majority of this segment, will achieve shipments of 311 million units, down 0.3% compared to the second quarter.

The once almost unstoppable growth in mobile-device shipments and revenues is coming to a screeching halt as wireless subscribers around the globe extend the lifecycles of their existing devices in response to difficult economic conditions, says iSuppli.

A check in the channel shows manufacturers are being conservative in their sourcing and component procurement activities; they are making efforts to reduce inventory to maintain lean and efficient operations, the firm notes.

iSuppli has lowered its forecast of global mobile-device shipment growth to 8.9% in 2008, down from 10.4%, which will end the year at 1.287 billion units.

“The outlook for 2009 is even more gloomy than for 2008,” observed Tina Teng, senior analyst, wireless communications, for iSuppli. “With the United States, Europe and Japan entering recessions, economic uncertainty and waves of layoffs mean consumers are likely to spend less on mobile products.”

Shipments in 2009 are expected to decline 5.6% to 1.215 billion units.

With more than three billion subscribers worldwide, the growth of the mobile-device market has been driven by upgrade purchases of existing customers, Teng noted.

“While new subscriber additions are continuing at a healthy pace and are poised to grow by 563.9 million in 2008 and by 506.5 million in 2009, an overwhelming majority of the new subscribers are coming from the rural areas of emerging regions,” Teng said. “These subscribers primarily are purchasers of low-cost, entry-level handsets. However, the pricier feature-phone and smart-phone market segments are driven by existing subscribers who are upgrading their mobile devices to take advantage of new features and advanced data services. As the economic climate deteriorates, these customers are delaying their purchases.”

With the penetration of mobile handsets in emerging markets rising rapidly during the past few years, upgrades have grown to account for more than 50% of total mobile-device shipments in 2008. Because of this, mobile-device shipment growth has become more sensitive to the upgrade cycle, says iSuppli.

If the replacement cycle extends by 4.7 months, the mobile-device market contraction will commence. If only 16% of 2008 subscribers upgrade to a new device in 2009, it will translate into a replacement cycle extension of 19 months. Under these circumstances, the outcome will be that mobile-device shipment volume will be reduced to 1.3 billion units in 2008 and to 1.1 billion units in 2009, with a market contraction of 12% in 2009, according to the research firm.

However, at this time, iSuppli is not going that far, revising its 2009 mobile-device forecast – including both mobile handsets and external modems – to 1.2 billion units, down from 1.4 billion previously, with mobile handsets accounting for nearly all shipments in 2009. iSuppli estimates, in the mobile-device market, the replacement cycle will extend by 10.7 months in 2009 with a replacement rate of 18.1%.

Based on iSuppli's preliminary estimate, on top of the average selling price erosion and higher mix of entry-level handsets in mobile devices, it is likely industry revenue will suffer a 10.7% decline in 2009.

iSuppli believes mobile-device shipments in 2009 will contract by 5.6%. By the end of 2010, the mobile-device market should show signs of a revival with a year-over-year growth rate of 3.1%.

Despite the economic meltdown and the rising unemployment rate, India will have added 9 million new wireless subscribers per month in 2008, while China's subscriber base will have expanded at a rate of 7 million new subscribers annually. First-time buyers in the emerging market are still going strong and will represent 42% of the mobile-device market in 2009.

DENVER, CO – Ron Huston, former owner and CEO of Advanced Circuits, has joined Advanced Assembly as director of marketing.

Huston will focus on sales to engineers who need surface mount parts placed on PCBs in fewer than two days.

The Denver-based provider of SMT services said its staff grew 51% in 2008.