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MUNICH — Demand for semiconductors used in vehicles and related gear will drop 25% from its peak of $20 billion last year, a new research report asserts.

It will take until 2013 for market revenues to rebound past $20 billion, research firm Databeans adds. The market will grow at a CAGR of 8.5% through 2014, reaching $22.5 billion, the firm forecasts.

A drop in demand for autos will be partially offset by higher electronics content in each new vehicle. The average value of electronics content will rise to 14.8% by 2012, up from 13% today, boosted by telematics, infotainment and safety applications, and environmental regulation compliance.

SINGAPORE -- Singapore's electronics output plunged 43.1% year-over-year in January, the government said today.

Exports fell 35% for the month, the Economic Development Board said.

The drop in electronics production pulled the overall manufacturing output down 29.1% the EBD said.

Manufacturing accounts for about 25% of the nation's economy, and most of its manufactured products are exported.

LONGMONT, CO -- EMS firm Premier Manufacturing and Supply Chain Services tomorrow will hold an open house for its expanded and remodeled plant here.

The open house takes place at 1 p.m.

The 10-years-old company operates from a 22,000 sq. ft. plant, in which it has three SMT lines. It assembles boards for medical, computers and peripherals, industrial and telecom applications.

HELSINKI – Incap Group reported 2008 revenues rose 13% to 93.9 million euros, but the net loss increased 390% to 5.4 million euros.

The operating loss was 3.6 million euros, lowered by 1.8 million in one-time charges related to restructurings.

It is not clear what percent of sales stem from contract electronics assembly services, but it is generally considered to be a large percentage of the overall revenue. The company's Incap Contract Manufacturing Services subsidiary, the former TVS Electronics, was acquired in June 2007.

SMYRNA, GA -- Chats on building solar-related product, mechanical and chemical cleaning, and solutions to troublesome SMT defects are among the highlights as Virtual PCB enters its second day today.

EL SEGUNDO, CA – China’s automotive electronics revenue in 2008 expanded by 11.7%, down 23 points from 2007, according to iSuppli Corp.

Production of automotive electronics equipment in China amounted to $13.6 billion in 2008, up 11.7% year-over-year. While the market expanded, this represented a major decline in growth from the 34.7% rise in 2007. The automotive electronics equipment area consists of portable navigation, infotainment, power train, safety and control, comfort and convenience, body electronics, security systems and other functions.

“This deceleration in 2008 mainly resulted from the poor performance of the automotive infotainment segment,” said Isaac Wang, industry analyst for China Research at iSuppli. “In 2007, automotive entertainment represented 48.7% of China’s overall automotive electronics market. This portion shrunk by 2.8 points in 2008. A rapid decline in international equipment orders put many of China’s automotive electronics suppliers in a difficult situation.”

Nevertheless, navigation applications maintained high growth, says the firm.

In 2008, portable navigation device revenue increased 29.7%, while in-dash navigation applications rose 19.3%. Many Chinese car owners already have adopted electronic navigation as an integral part of their new driving lifestyles. This trend will boost telematics players, especially those supporting intelligent transportation system applications.

Because of the international economic recession in 2008 and into 2009, the global automotive electronics industry will not rebound until after 2010. iSuppli expects it will not climb back to its revenue height until 2012.

Fortunately, the situation in China is not as serious, says the firm. Although the nation’s auto electronic equipment annual growth rate is set to drop again in 2009, it will remain positive at 6.5%.

This relatively stable performance enhances China’s position in the global market. China’s share of the global automotive electronics market revenue was 13.5% in 2008, and is expected to rise to 18.1% in 2012.

China’s market will play a critical role, and international firms will expand their presence and activities in the nation.

Competition will be much greater in China with leading multinational firms, such as TRW and Lear, which have done well in the global market, but have not been so successful in China thus far. Many new domestic entrants also are expected, mostly in the infotainment segment.

China’s automotive infotainment market saw two major changes during 2008: There was a greater focus on OEM customers and on the domestic market.

The export market accounted for more than 62% of all Chinese-made automotive infotainment products in 2007.

However, in 2008, the sudden arrival of the financial crisis in the US triggered mass international order cancellations. Chinese equipment vendors suffered severe losses and the export market fell sharply, says iSuppli. Exports contracted 8.6% last year. As a share of China’s automotive infotainment market, exports have decreased to 41%.

Infotainment products targeting the aftermarket used to account for 69% of the overall total in 2007. However, the economic woes of 2008 negatively impacted international consumption. The aftermarket shrank to a 60% share at the end of 2008.

“Amid these rapid changes, the most outstanding automotive electronics firms are not the largest or strongest ones, but those players who are making the most positive and decisive responses,” Wang said. “Companies need to quickly adopt the most suitable business models as market and general economic conditions shift.”

China’s automotive electronics market is immature and applications are developing at different rates. In certain segments, such as low-end infotainment, superfluous products are common. Meanwhile, in most other segments, supply still lags demand, sometimes by a wide margin. For new market entrants in China’s automotive electronics industry, it is important to find market segments or product niches with less competition, Wang noted. Where the gap between demand and supply is larger, market conditions will be more favorable and potential profits will be higher.

NORTH BILLERICA, MA – BTU International reported fourth-quarter net sales slipped 19.6% from last year to $14.7 million. The net loss for the period ended Dec. 31 was $2.2 million, versus net income of $600,000 in the fourth quarter 2007.

For the year, net sales rose 13.4% to $72.3 million, but the company took a net loss of $1.1 million, reversing a net profit of $1.9 million in 2007. Cash flow from operations was $2.4 million, and at year-end, the cash balance was $27.5 million.

The company's alternative energy unit's fourth-quarter revenues were up 20% sequentially and almost 70% for the year. The group makes up 28% of BTU's overall systems business. Electronics assembly equipment fell 45% sequentially.

In a press release, chairman and CEO Paul J. van der Wansem said BTU expects the first half to be "very challenging" for its electronics assembly business. "This business, which is driven to a large degree by consumer spending, could be down by over 50% in 2009, impacting our top line and bottom line performance with losses expected in the first two quarters.

“We are encouraged by the initial reception of the upcoming new solar product introductions and the continuing growth of our solar business, and we are optimistic about achieving increased revenues during the year. As our alternative energy business grows to become the major part of our business, we expect to become profitable in the second half.”

TAIPEI – Compal Electronics today said second-quarter notebook shipments would rise 15% sequentially.

Compal, the world's second-largest contract assembler of laptops, said global notebook shipments would total 145 million units this year. That figure includes low-price netbooks, the company said. Compal expects to ship 32 to 35 million units, good for a 22 to 24% share.

CORK, IRELAND – Sanmina-SCI is cutting about 150 contract workers from its site in Fermoy, according to reports.

The workers were informed yesterday morning. Full-time staff may also face cuts, the report said.

SPOKANE VALLEY, WA – A General Dynamics subsidiary here will close in June, with 300 employees laid off.

Itronix, which builds rugged laptops and other mobile devices, will outsource production to US-based contract assemblers, a General Dynamics spokeswoman told Circuits Assembly. The company is currently reviewing potential suppliers, spokeswoman Fran Jacques added.

The company told workers the layoffs would start April 24, and final operations at the site would wind down in June. A source at the company said 60 positions would be given the option to relocate and 20 more would be offered telecommuting jobs.

While production will be performed by outside assemblers, engineering design will be moved to Sunrise, FL, Jacques said. "Itronix is still in the rugged computer business," she said.

ARLINGTON, VA – Consumer confidence in the overall economy was virtually unchanged in February, according to figures released by the Consumer Electronics Association and CNET. Despite positive growth in certain categories, such as digital displays, the CEA-CNET Indexes also show that consumer expectations about technology spending continue to fall.

The CEA-CNET Index of Consumer Expectations (ICE) reached 166.4 in February, relatively unchanged from January, when the index measured 166.6. The index is down over 12 points from this time last year.

“We are now 14 months into the recession, and consumers remain anxious about the future,” said Shawn DuBravac, CEA’s economist and director of research.

“Unemployment continues to rise and the two key sources of financial wealth – real estate and stocks – remain muted.”

Consumer confidence in CE and technology dropped nearly 9 points in February 2009 to 68.4, the lowest level since the CEA-CNET Indexes were initiated in January of 2007. The 8.9-point drop was the third largest single-month decline for the CEA-CNET Index of Consumer Technology Expectations (ICTE). The ICTE, which measures consumers’ confidence in consumer electronics and technology, is down over 21 points from this same time last year.

“Consumers continue to delay discretionary purchases, and we are in the midst of one of the worst drops in consumer spending in the last 40 years,” said DuBravac. “The drop in February is not completely surprising considering the decent strength in consumer spending on technology in January. While consumer spending is down across the board, we are still seeing positive growth in several product categories such as digital displays, accessories and video games.”

The CEA-CNET Indexes are comprised of the ICE and the ICTE, both of which are updated on a monthly basis through consumer surveys.

ARLINGTON, VA – The Consumer Electronics Association this week applauded President Barack Obama for his focus on reducing the federal deficit as a critical component to addressing the fiscal problems facing the country. CEA believes the ballooning deficit is a principal impediment to long-term economic growth, the trade group said.

CEA is urging the federal government to reduce the deficit by committing to the follow actions:

End corporate bailouts, including the Troubled Asset Relief Program, that artificially prop up industries, and end “Buy American” and other bailout provisions that reward backward protectionist policies that will hurt America’s ability to compete in the global economy.

Oppose the Employee Free Choice Act, or “card check,” and other anti-business measures that hurt American employers and infringe on the rights of workers.

Pass pending free trade agreements, particularly those with Colombia, Panama and South Korea, to boost U.S. exports and let American companies fairly compete with their international trading partners.

Support the free and open market and promote technology innovation by U.S. companies. When aided by trade, the technology industry will help mend the global economy and drive the creation of new jobs.