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Stow, OH – The wafer fab industry's monthly capacity is set to reach a new high next year, increasing 17%, according to analysis firm Strategic Marketing Associates (SMA).

Collectively, the 35 new fabs coming online in 2007 will have the capacity to produce up to the equivalent of 2 million 200-mm wafers. The value of these fabs may reach $56 billion over the next three years.

The expected 17% increase brings with it growth opportunities, as well as the risk of overcapacity, especially in the memory arena, SMA warned.

Up to 60% of the added capacity is expected to be allocated for memory, specifically DRAM and non-volatile flash, which has become ubiquitous in consumer electronics.

FlashPartners, the Toshiba-SanDisk joint venture, may eclipse fab capacity leader Samsung in flash memory, with ambitious plans to bring three 300-mm fabs online by 2008.

Chip foundries are also setting a new record in fab construction, with Taiwan-based TSMC, as well as China-based SMIC and Hua Hong Electronics, planning to bring new 300-mm capacity online next year.

The firm projected equipment sales to near an all-time high. Total capital spending by chip companies is set to grow 14% this year to $47.3 billion, and by 10% next year to $59 billion, just shy of the all-time high of $61.5 billion set in 2000.

BANNOCKBURN, IL — According to trade group IPC, the North American rigid PCB book-to-bill ratio for June was at parity at 1.00, while the flexible book-to-bill climbed back to the positive range at 1.01 after a three-month dip below parity.

The combined (rigid and flex) industry book-to-bill ratio in June 2006 was 1.00. The ratios are based on monthly data collected from PCB producers that participate in IPC’s monthly PCB Statistical Program.

Ratios are calculated by dividing the value of orders over the past three months by the value of sales. A ratio over 1.00 suggests expansion.

Rigid PCB shipments are up 12.5% and bookings rose 19.2% year-on-year. Year to date, rigid shipments are up 11.3% and bookings are up 13.9%.

Flex shipments were up 1.7% from June 2005 and up .9% to date. Bookings increased 18.9% YOY, but are down 7.6% YTD. Sequentially, flex shipments and bookings increased 17.4% and 73.8%, respectively.

Rigid PCBs represent an estimated 85% of the current PCB market in North America, according to IPC.

In June, flexible circuit manufacturers surveyed indicated that bare circuits accounted for 65% of their monthly shipment value.

Over 88% of PCB shipments reported were domestically produced.

REDMOND, WA -- Data I/O Corp., a top provider of manual and automated device programming systems, today said its second quarter revenues were up 12% sequentially and 8% from a year ago. The company posted a net loss of $398,000, up from a net loss of $512,000 in the first quarter of 2006 but down from net income of $53,000 last year. The company posted sales of $7.2 million for the quarter.

TORONTO -- Celestica Inc.'s second-quarter net loss was $30.3 million on sales of $2.2 billion, the company said today. Earnings dropped from $12.6 million last year. Revenue, while at the high side of previous guidance, slipped 1%, on strong demand for telecom and server gear.

SAN JOSE -- Thieves have stolen hundreds of thousands of dollars in equipment from at least 18 Silicon Valley high-tech firms this year and show no signs of slowing down.

The thieves are targeting chips, flash memory cards and electronic devices, say persons familiar with the crimes.

Police have identified a silver minivan with a skull and crossbones in the back license plate area as a common vehicle in many of the robberies. In many instances, a woman distracts delivery workers by asking for directions.

On Wednesday, a delivery truck at Viva Computers in Fremont was robbed of CPUs and hard drives valued at $13,000. Other firms recently targeted have been Bell Microproducts in San Jose, which has been hit several times, and Advanced Micro Devices. Last Friday, Ampro Systems in Fremont was robbed of about $200,000 in flash memory cards.

The San Jose Mercury News quoted an employee at one of the South Bay companies that has been repeatedly robbed as saying, "Our trucks get hit at stoplights in broad daylight. These guys are so smart, armed with the latest communications technology, that this problem continues unabated.''

ROCHESTER, MN -- Pemstar Inc.'s June quarter revenue rose 1.3% to $212.5 million, and net income jumped to $4.8 million, compared to a net loss of $17.6 million a year ago.

The June quarter period includes a one-time gain of $2.5 million related to the reversal of previous restructuring provisions.

President and COO Roy Bauer said, "We are still doing a little bit more realigning of our portfolio. We are considering, as previously disclosed, strategic alternatives for our Tianjin, China, operations. We see optimism in our medical, computing and data storage and industrial businesses for the second half of the year."

For the quarter, industrial sales accounted for 38.4% of net sales, computing and data storage was 23.5%, communications was 36.2% and medical was 1.9%.

Accounts receivable at June 30 was $125.5 million with days sales outstanding of 53 compared with $121.1 million in accounts receivable with DSO of 56 at March 31.

Net inventories were up nearly $10 million, to $64.2 million, and inventory turns dropped 0.9 turns to 12.4 times. Cash cycle was 31 days, down from 40 days in the March quarter.

Jefferies Broadview was retained to explore possible partnerships or a sale of the Tianjin, China operations. Pemstar said it seeks to reduce its consumer business and focus on more profitable markets like medical, industrial, instrumentation, military/aerospace and process equipment.

For the September quarter, Pemstar expects net sales of $200 million to $220 million.

NEW YORK -- The world market for SMT screen printers will grow from $190.2 million in 2005 to $366.4 million in 2012, a research firm said today. Sales of glue dispensers will grow from $26.3 million in 2005 to $42.1 million in 2012, said Frost & Sullivan.

WASHINGTON -- The U.S. government today reported that orders to U.S. factories for big-ticket durable goods fly higher in June, boosted by demand for commercial aircraft.

Durables orders rose 3.1% in June, well above the 1.7% gain previously forecast by Wall Street.

Commercial aircraft rose 8.8%, reversing two months of big declines. Last month, Boeing booked orders for 135 aircraft, up from 33 in May.

Analysts believe that output in the manufacturing sector will continue to rise in coming months but at a slower pace, reflecting an economy that is slowing under the impact of surging energy prices, rising interest rates and the cooling housing market.

TOKYO -- Sony, Canon and NEC are fueling a comeback among Japan's electronics companies this year.

Link to AP story here.

MINNEAPOLIS -- CyberOptics Corp. reported sales of $14.6 million, up 73% a year ago and down 1.1% sequentially, for its second quarter ended June 30.

Net income rose 844% to $1.9 million year-on-year, and 31% from the first quarter. Operating income jumped to $2.5 million from $26,000 a year ago and was up 34% sequentially.

EL SEGUNDO, CA — Illustrating the increasing domination of Asian producers in the global mobile-PC market, a whopping 82.6% of notebook computers in 2005 were manufactured by contract manufacturers mainly in the Greater Shanghai area, according to research firm iSuppli Corp.

Worldwide mobile PC production in 2005 amounted to 61.9 million units, and will grow at a compound annual growth rate of 17.9% to reach 141.4 million units in 2010, iSuppli predicts.

In 2005, 82.6% of this production, or 51.2 million units, was outsourced by PC OEMs to contract manufacturers. By 2010, the portion of outsourced PC production will rise to 92.5%, or 130.8 million units.

LOUISVILLE -- Sypris Solutions' second quarter revenue rose 5% to a record $132.2 million but the company reported a net loss of $400,000, down from a $2 million profit a year ago.

Free cash flow for the quarter reached a record $21.4 million.

The company cited equipment downtime in its Industrial Group and shipment delays in its Electronics Group for U.S. Government programs. The latter delays are expected to continue through the balance of the year but will ultimately generate even more business than originally thought, Sypris said.

Electronics Group revenue was $33.8 million in the quarter, down 5.8% from the prior year. Gross profit was off 6.3% to $5.9 million. Net orders were $30.7 million and backlogs were $91.2 million. "Despite delays inherent in the certification process for two new classified programs, the outlook remains strong for our Aerospace and Defense segment in 2007," said CEO Jeff Gill.

Gill gave a cautious forecast for the rest of the year. "Looking forward, we believe that it is prudent to establish a more conservative outlook for the remainder of 2006. Until we demonstrate that our Industrial Group can operate for sustained periods at capacity, our forecast for operating margins will remain at current levels. The delay in the certification of the classified programs in our Electronics Group is expected to shift as much as $20 million of shipments from 2006 into 2007, the result of which is forecast to impact revenue and earnings during the second half of 2006."

The company reiterated its previous July guidance of second half revenue of $275 million to $285 million and earnings of $0.10 to $0.15 per diluted share.