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News

BANNOCKBURN, IL - The 90-day moving average shipments of all types of circuit boards slipped 4.5% year-on-year in April, according to the latest poll of U.S. PCB fabricators. Bookings fell 6.5%, as slackened demand for rigid boards more than offset gains in orders for flexible circuits.

A large percentage of the production includes boards built offshore and distributed by North American vendors. According to IPC, which takes the poll, 31% of the shipments reported were produced offshore, up one point from March.

The domestic book-to-bill ratio dropped 0.05 points to 1.0, breaking a streak of four straight months above 1.0. The ratio is based on data collected by IPC from rigid and flex producers and is calculated by dividing three months worth of orders by sales. A ratio over 1.0 is considered an indicator of rising demand.

The ratio for rigid PCBs was down 0.01 to 1.03, while that of flexible circuits dropped 0.20 points to 0.87.

Rigid board shipments, estimated by IPC to make up 75% of all domestic PCBs, were down 10% in April vs. a year ago. Bookings were down 4.5% for the month.

Flex sales fell 17.9% and bookings plummeted 12.8%. Value-added services made up 53% of the shipment value of flex circuits.

Year-to-date, rigid shipments are down 5.9% and bookings are off 4.8%. Flex bookings are down 5% and shipments are up 26.2%. Shipments of all boards are down 0.3% and bookings are down 4.8%.

Sequentially, combined shipments were down 13.0% over March, while bookings fell 11.7%. Rigid shipments were down 19.3% and bookings fell 18.2% sequentially. Flex shipments were up 14.3% and bookings were up 23.5% against March numbers.

Sixty-nine percent of PCB shipments reported were domestically produced. Domestic production accounted for 78% of rigid PCB and 40% of flexible circuit shipments in April, IPC said.

In a statement, IPC cautioned that month-to-month comparisons should be made with caution as they may reflect cyclical effects.

MOUNT PLEASANT, IA -- Sparton Corp., a Michigan-based contract manufacturer, may buy and save Celestica's assembly factory here, a local TV station reported last week.

Celestica announced plans to close the plant, which employs 340 workers, this year. But if the company keeps the 70,000 sq. ft. plant open for "for about a year," WHO-TV reported, Sparton will generate sufficient defense and commercial contracts to support the factory.

The plant makes electronic assemblies for Motorola radios, WHO-TV said.

SAN JOSE -- Worldwide sales of semiconductors declined slightly in April to $18.2 billion, a sequential decline of 1.2%, the Semiconductor Industry Association reported today. April sales were up 6.9% from last year. April is traditionally a strong month for semiconductor sales, the SIA noted.

"Two factors - a decline in DRAM prices and a lower mix of semiconductors for cell phones - contributed to a slight decline in worldwide semiconductor sales in April," said SIA president George Scalise. "For much of the past year, cellphone manufacturers were working off inventories of chips used in low-end cell phones, which resulted in a richer mix of products shipped. Once those inventories were depleted and normal purchasing patterns resumed, overall ASPs for circuits for cell phones declined. Plentiful supplies of DRAMs contributed to declining prices and a 7% sequential decline in DRAM sales in April."

DRAMs are one of the largest segments of the total semiconductor market.

The SIA reported that overall factory utilization declined slightly in the first quarter to around 85% from 86% in the fourth quarter 2004. Utilization of leading-edge capacity (defined as capable of producing 0.16-micron and smaller geometries) increased to 94 percent from 93 percent. Capacity utilization by integrated device manufacturers remained stable at 87 percent. Foundry utilization continued to decline to 72% of capacity in the first quarter from 78% in the prior quarter. Recent comments from the two leading foundry companies, however, project an increase in foundry capacity utilization in the third quarter.

"Despite the slight decline in April sales, the overall outlook for the semiconductor industry remains strong," said Scalise. "Excess inventories have been eliminated and capacity utilization remains at reasonable levels. Energy prices appear to have stabilized, and U.S. economic growth - an important bellwether for the semiconductor industry -- continues to be strong.

"On the whole, worldwide semiconductor sales continue to run ahead of our November forecast," Scalise said.

HERNDON, VA—The International Electronics Manufacturing Initiative (iNEMI) has released two documents to help manufacturers reduce the risk of tin whiskers in lead-free products.

The first is JEDEC standard JESD22A121, "Test Method for Measuring Whisker Growth on Tin and Tin Alloy Surface Finishes," and the second is the updated "Recommendations on Lead-Free Finishes for Components Used in High-Reliability Products," from the iNEMI Tin Whisker User Group.

The JEDEC standard provides: an industry-standard method of measuring and comparing whisker propensity for different plating or finish chemistries and processes; a consistent inspection protocol for tin whisker examination; and a standard reporting format.

IRVINE, CA -- Following the opening of its Research and Applications Center in Irvine, CA, Henkel has completed its 900 sq. m. Hemel Hempstead facility expansion in the United UK.

Long a center of R&D for the company's line of solder products, the facility is now also home to several other complementary Henkel businesses, including automotive electronics, industrial and automotive adhesives and sealants.

The addition includes several new laboratories: an applications lab for adhesives and sealants, a metal pre-treatment and coatings lab, analytical laboratories, an equipment assembly area long enough for a complete automotive vehicle and a long-term corrosion testing area.

Jersey City, NJ -- Cookson Electronics has opened its advanced Technical Service Center and warehouse facility in the Zhong Dian Lu Ke Industrial Park in Shanghai. The $3 million facility will house more than 60 employees.

The 1,500 sq. meter facility will be the company's base in China, providing local-language technical support from the Cookson's three electronics companies (the Assembly Materials Group, Enthone and Polyclad) to fabricators and assemblers of PCBs, and assemblers of semiconductor packaging.

North Kingstown, RI - Manz Automation AG has moved its manufacturing and engineering operations to an expanded facility in Reutlingen, Germany. The 65,000 sq. ft. facility provides increased production and administrative capabilities and houses the existing 120 employees with room for an additional 80 people.

"This expansion is in direct response to our dynamic growth and success in the marketplace," said Dieter Manz, president. "The new facility, together with the anticipated hiring of 20 additional engineers, provides us with sufficient capacity for future expansion and represents our commitment to serve our worldwide customers."

The building is environmentally friendly, with a roof-mounted solar power system that generates about one-third of the facility's annual electricity requirements.

Manz Automation AG is a supplier of automated odd-form assembly equipment to the electronics industry.

POMONA, CA -- Everett Charles Technologies (ECT) has named Patrick T. Flynn president. Previously president of ECT's Capital Equipment and Services Group and Semiconductor Test Group, Flynn succeeds David R. Van Loan, who was recently appointed president of Dover Technologies, ECT's parent company. Van Loan will remain the CEO of ECT during his transition to DTI.

Since joining ECT in 2000, Flynn has been instrumental in the development of several new products and spearheaded ECT's expansion into China when he established wholly owned operations in Suzhou and Shenzhen.

ECT is a manufacturer of electrical test products and services, including semiconductor test products, bare-board automatic test systems, Pogo test contacts, and bare and loaded PCB test fixtures and programs.

NEW TRIPOLI, PA -- While IC demand will grow 32% in 2005 to $45 billion, internal IC production will reach only $9 billion despite ongoing massive semiconductor fab construction.

According to a report by The Information Network (theinformationnet.com), China's IC industry is expanding rapidly. In 2005, China will produce 22 billion ICs, which will account for only 20% of domestic demand. Most high-end products used in computers and mobile phones must be imported.

White Plains, NY -- Nortel and IBM have signed an agreement designed to support customized products across a range of market segments. As the first step in this relationship, the companies will establish a Joint Development,Center in Research Triangle Park, NC, to collaborate on the design and development of new products and services.

Nortel expects to utilize IBM engineering and technical services for a number of projects, aimed at broadening Nortel end-to-end broadband, Voice over IP, multimedia services and applications and wireless broadband offerings.

PALO ALTO, CA -- Inventory throughout the supply chain decreased in the first quarter of 2005, albeit not as fast as sales/COGS, resulting in a moderate decrease in inventory velocity.

Deutsche Bank analysts believe communications OEMs will likely work inventory levels lower in 2Q and 3Q in the face of only moderate end market demand (negatively impacting near-term EMS demand).

PALO ALTO, CA -- IBM recently held an analyst meeting in New York that provided an update on the company's view of IT spending trends, an overview of its strategic positioning, actions it is implementing to take advantage of market opportunity, a recap of the 1Q miss, and an update on recent business trends.

According to Deutsche Bank analysts, the actions IBM is taking to drive standardization and cost reduction in services will better position the company for profitable share gains. In the near term, recent improvement in bookings trends (in both services and hardware) provides greater visibility on near-term performance.

In addition, DB states that benefits from restructuring, new product cycles in servers and microelectronics, and a potential mainframe cycle could support a solid 2H EPS recovery.