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News

ROUND ROCK, TX - Dell Computer said PC unit growth would slow to 10% for the first quarter, another sign of slowing IT demand for PCs. Demand in the U.S. has improved slightly, however, Dell told analysts gathered at its annual Analysts Day meeting this week.

Dell said its overall business is a little softer. Investment bank Deutsche Bank forecasts Dell's revenues to grow 16% in fiscal 2006.

OYSTER BAY, NY - Most of the public attention given to RFID has focused on the retail supply chain, especially Wal-Mart's mandate to its top 100 suppliers. But the U.S. Department of Defense is also mandating its use this year - to all of its 43,000-plus suppliers. Add to that the needs of the aerospace industry, particularly the two giant aircraft makers, Boeing and Airbus, and the shape of a massive vertical RFID market emerges.

Boeing and Airbus - which use many of the same components - are working with the US Federal Aviation Administration to formalize UHF RFID certification for systems to track aircraft parts, says Erik Michielsen, ABI Research director of RFID and ubiquitous networks. The hoped-for improvement in ROI is of vital importance to an industry that has been hard-hit by recent economic conditions. Safer planes and fewer procurement overlaps are added incentives.

"The airline industry is obviously profit-based," Michielsen says. "They want efficient manufacturing, supply chain and asset tracking systems to create economical business models. With the DoD, RFID is not about business models: it's about improving military operations efficiency in acquiring materiel from suppliers and making sure it gets to units in the field. These are massive, aggressive and very complex initiatives that will be major factors driving RFID's adoption."

The first beneficiaries are the RFID suppliers who have been granted "Blanket Purchase Agreement" awards, certifying that their systems meet the DoD's requirements, ABI says. The first five companies in this favored position are UHF EPC Class 1 transponder suppliers Alien Technologies, Avery Dennison, CDO Technologies, Lowry Computer Products and Intermec. Other BPA awards are expected soon.

REDMOND, WA, April 7 -- Data I/O, a provider of manual and automated programming systems, has expanded its strategic alliance with Intel Corp. to provide flash memory programming solutions.

According to the company, wireless handset manufacturing companies are Data I/O's largest customer group and consume significant volumes of high-density flash memory devices. Multi-national customers require speedy, concurrent support in many different geographies. Intel offers such support with its flash memory Programmer Evaluation Labs (PEL) located in Folsom, CA, and Cavite, the Philippines. These labs both use the Data I/O FlashPAK programming system.

"Intel Flash Memory devices are used by virtually all our major customers, and close cooperation with Intel strengthens our programming solutions," said Bruce Rodgers, VP of sales and marketing in Asia/Americas.

Peter Larsen, Intel programmer evaluation lab manager added: "Our [combined] efforts include rapid algorithm development for Intel Flash Memory components, optimized manufacturing programming performance on Data I/O platforms and quickly addressing the needs of our customers."

LOS ALTOS, CA - China's appetite for energy coupled with decisions by leading oil producers not to raise output will inflate energy costs and slow global GDP growth, according to the latest economic report by Henderson Ventures.

The research firm forecasts GDP growth to slow to 3% in 2006, from 4% in 2004, and then rebound to 3.6% in 2007.

Electronics equipment markets are expected to follow suit, Henderson said.

"This year, consumer outlays will be stoked by demand for mobile telephones, flat-screen TVs, low-end PCs and iPods. Increasing per-vehicle content will help automotive electronics manufacturers to achieve respectable growth," Henderson said.

Businesses will spike IT equipment buys, and military electronics will see "muscular gains," largely in the U.S., Henderson said.

Global electronics equipment production is forecast to grow 7.1% percent this year, down from 10.3% in 2004. 2006 and 2007 growth will be 5.6% and 7.7%, respectively, Henderson forecasts.

VANCOUVER, CANADA - Nam Tai Electronics reported a record $156 million in sales for the first quarter of 2005, an increase of 64% over 2004. The growth exceeded the EMS provider's upper sales guidance of $155 million.

"Nam Tai's first quarter sales typically are seasonally the lowest due to a long holiday in China with the shortest working days and after the peak season of Christmas sales," said Nam Tai's CEO Joseph Li.

""The substantial growth in sales was mainly attributable to our new expanded production capacity resulting from construction which has completed ahead of the schedule. Based on continuous sales orders from existing customers and positive feedback from potential customers, we are optimistic and confident that our growth momentum will continue into the second quarter and onward in 2005."

Nam Tai Electronics manufactures electronics components and subassemblies, and finished products, including cellular phones and PDAs.

BANNOCKBURN, IL - The 90-day moving average shipments of all types of circuit boards rose 0.9% year-on-year in February, according to the latest poll of U.S. PCB fabricators. Bookings fell 34.1%, however, due to seasonality.

A large percentage of the production includes boards built offshore and distributed by North American vendors. According to IPC, which takes the poll, 33% of the shipments reported were produced offshore, down two points from January.

The domestic book-to-bill ratio was flat at 1.08, the third month in a row the key indicator was 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.

Separately, the ratios were 1.04 for rigid PCBs, up 0.04 points, and 1.23 for flexible circuits, down 0.13 points.

Rigid board shipments, estimated by IPC to make up 75% of all domestic PCBs, were down 3.2% in February vs. a year ago. Bookings were down 9.8% for the month. Flex sales grew 21.2%, but bookings fell 105%.

Year-to-date flex bookings are down 26.2% and shipments are up 33.8%. Rigid shipments are down 1.8% and bookings are off 6%. Shipments of all boards are up 4.3% and bookings are down 10.1%.

Sequentially, combined shipments were up 5.1% over January, while bookings were 28.3% lower percent. Rigid shipments were up 11.2% and bookings climbed 4.5% sequentially. Flex shipments were down 13.9% and bookings were down 104.7%.

Domestic production accounted for 74% of rigid and 37% of flex circuit shipments in January, IPC said.

Flex sales include some value-added services in addition to the bare flex circuits.

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

CHICAGO -- Connector prices are expected to fall over the next six months, according to a poll of purchasers and engineers.

No data on the number of persons polled or the margin of error was released. The monthly poll is conducted by ConnectorSupplier.com.

According to the poll, 37.6% of respondents feel prices will stay the same over the next six months, while 33.3% of respondents feel prices will decline slightly. A quarter of respondents - 25.8% - believe prices will increase slightly. About 31% of respondents felt prices declined slightly over the past six months, while 20.4% felt they rose slightly.

Lead times are expected to stay more or less the same over the next six months, the respondents say. Over 68% said they expect no change in lead time. About 20% said they expect lead times to increase slightly. The average lead time as of February was 4.8 weeks, according to those polled.

ConnectorSupplier.com is run by Bishop & Associates, a consulting firm for the connector industry.

SAN FRANCISCO - Manufacture in-house or out? That's the decision OEMs constantly face and of late it appears the top makers of handsets will continue to opt for the former.

While SonyEricsson outsources production to Flextronics and has been gaining market share, other leading OEMs are expanding internal operations. Capacity expansions in Mexico and India by Nokia and others are the latest in a series of anecdotal evidence that gives merit to the in-house crowd. And that means less business for EMS companies.

Fourth quarter unit sales of the top tier handset OEMs grew 33% year-on-year, vs. 8% for the rest of the industry.

Tokyo, Japan - Japan Unix has entered into a sales agreement with Christopher Associates Inc. (Santa Ana, CA) for distribution of their robotic soldering systems in North America, including laser soldering systems and soldering irons for lead-free.

Unix 414, the latest generation of the Robosol line, can be configured for conventional or lead-free processing. According to the manufacturer, Opto Laser ULD-730 laser robotic soldering system offers a non-contact, precision alternative for high-reliability applications.

SAN JOSE - Sales of EDA software and services reached $1.1 billion in the fourth quarter, up 3% year-on-year. For the year, revenue hit a record $4 billion, said the EDA Consortium (edac.org).

"In 2004, The EDA industry crossed the $4 billion mark," said Walden C. Rhines, chairman of the EDA Consortium and chairman and CEO of Mentor Graphics Corporation. "Every quarter saw consistent year over year growth for the whole industry, though the North American region, as well as the IC Physical Design & Verification segment, were both down for the year."

For the quarter, product and maintenance revenue (excluding services) increased 3% to a record $1 billion. PCB and MCM layout tools hit $91 million, up 9%. CAE sales were up 9% to $523 million. IC physical design and verification fell 6% to $326 million. Semiconductor intellectual property (SIP) revenue was down 2% to $71 million.

Services revenue was $67 million, up 5%.

For the year, CAE revenue was up 5% to $1.9 billion. IC physical design and verification fell 4% to $1.2 billion. Sales of PCB and MCM layout tools rose 3% to $341 million. SIP revenue rose to $314 million from $281 million, due in part to new company participation. Services revenue totaled $280 million in 2004, a 12% increase.

North America, EDA's largest customer base, purchased $494 million worth of products and services in the fourth quarter, down 14% from a year ago. Western Europe jumped 33% to $268 million. Japan grew 14% to $188 million. The rest-of-world rose 23% to $128 million.

For the year, North American revenue down 4% to $1.95 billion, good for a 49% global share. Western Europe rose 12% to $820 million. Japan was up 2% to $783 million. Other regions combined to rise 22% to $466 million.

Tempe, AZ - Manufacturing ticked down in March yet grew for the 22nd consecutive month. Growth in new orders and inventories helped offset lower production, and backlogs jumped, said the Institute for Supply Management (ism.ws).

"The manufacturing sector maintained its strength in March, ISM chairman Norbert Ore said, adding that "price inflation continues to present a problem for manufacturers."

The PMI measure of economic activity ticked down 0.1 points sequentially, to 55.2%. New orders were up 1.3 points to 57.1%. Production was almost even, at 56.5%. Employment was down 4.1 points, to 53.3%.

Electronic Components and Equipment, and Industrial and Commercial Equipment and Computers were among the sectors reporting growth.

[TABLE]

Nov. Dec. Jan. Feb. March

PMI 57.8 57.3 56.4 55.3 55.2

New orders 61.5 61.6 56.5 55.8 57.1

Production 57.0 56.7 57.8 56.7 56.5

Inventories 50.7 52.8 52.8 48.6 54.1

Customer inventories 43.5 44.0 44.5 42.5 46.0

Backlogs 47.5 54.0 50.5 50.5 56.0

Source: Institute for Supply Management, April 2005

LAUSANNE, Switzerland, April 5 -- Synova has opened a new Japanese office to provide localized sales and support for the company's water jet-guided laser systems.

Accounting for more than 40% of Synova's revenue in 2004, the Asia-Pacific region is the company's largest market, with the majority fueled by the semiconductor and electronics sectors.

Synova has also recently opened local offices in Hong Kong and Korea, and established distributor partnerships in Taiwan, China, the Philippines, Singapore, Thailand, Malaysia and India.