News
SMT Resource Group sells, integrates and provides support and service for new and refurbished assembly equipment.
Encore provides financing for equipment procurement.
The slowing will mainly affect fourth-quarter revenues, iSuppli forecast, saying second-half strong growth will be in the range of 10% higher than the first-half. First-half global semiconductor sales grew 31.4% year-on-year, but second-half sales will decelerate to 20% growth, the firm said.
iSuppli revised its 2005 forecast to 9.6%, down from 11.8%. The firm upped its forecast for 2004 one point, to 25.4%.
iSuppli forecast 1H 2005 sequential growth of less than 2%, followed by a pickup to 6% in the second half.
DRAM sales are expected to take a dive in 2006, limiting overall semiconductor growth to 2%. iSuppli predicts 2006 will mark the bottom of the semiconductor downturn.
Analyst Chris Whitmore said many technology companies performed below expectations in July and August and "hope for a robust pickup in September is fading quickly." OEMs are dropping inventory levels, he noted, and concern is greatest for EMS companies that build communications gear.
"We continue to believe that the combination of slowing end demand and excess inventory across the supply chain will result in a significant deceleration of production trends across the EMS industry. We are most concerned about EMS vendors with substantial exposure to communications infrastructure."
As evidence, Whitmore cited:
- Wal-Mart's tepid same-store sales increase of 0.5% in August and the company's failure to mention electronics in its list of top-performing products.
- Target, which cited electronics as one of the worst performing products in August.
- Best Buy's August same-store sales increase of 4.3%, below 6.7% last year and Wall Street's forecast of 5.4%.
- 3Com's cutting of its forecast for the August quarter and belief that sales declined 10 to 13% sequentially.
- Cautious announcements by Intel, Fairchild, IDT, Altera and Cypress.
In addition, Whitmore noted warnings from several semiconductor companies of reduced inventory levels at OEMs, which could impact EMS production. DB believes market sentiment "is still too optimistic about EMS fundamentals" over the next six quarters.
Arlington, VA, Sept. 8, 2004 -- The number of U.S. IT jobs increased by just 2% between the first quarter of 2003 and the first quarter of 2004, and demand for IT workers is expected to slow during the rest of the year, according to a survey released Wednesday by the Information Technology Association of America (ITAA).
The overall size of the U.S. IT workforce grew from about 10.3 million to 10.5 million jobs from 2003 to 2004, according to an ITAA telephone survey of 500 hiring managers from both IT and non-IT companies across the U.S. But hiring managers indicated they will seek to fill a total of 230,000 jobs in 2004, down from about 500,000 IT jobs filled in the past year.
Among the factors in the slow job growth include U.S. companies' continuing concerns about the economy, rising costs of health care and other benefits, increasing productivity among workers and offshore outsourcing.
Some job classifications can look forward to bright futures, however. The report indicates that technical support and network system design saw the largest year-to-year increases in employment, up 5%. And technical support scored the largest number of jobs—67,000—followed by network systems development and programming.
Given current concerns about terrorism, critical infrastructure protection and homeland security, information security appears to hold the greatest IT job growth potential over the next three to five years, the ITAA said.
Net profit fell 18%, to $1 million, for the quarter ended July 31.
During the quarter the company ramped production in China. In a press release, president and CEO Gary Fairhead said near-term results "will be negatively impacted by investment in China." He said China should show positive operating results in fiscal 2005.
Las Vegas operations were slow which the company attributed to normal seasonality. Mexico operations were busy, and Fairhead said the company has seen "renewed interest in Mexico as opposed to China."
Solectron, which owned 23.5% of ECS, sold the remaining 2.15% to an undiclosed group.
ECS officials said the deal shouldn't have negative repercussions for ECS, which doesn't distribute Solectron products.
In a press statement issued jointly by ECS and ST Electronics, the companies said the investment isn't expected to have a material impact on earnings in 2004.
ST Electronics designs and develops electronics systems mainly for industrial use. ECS provides IT services and sells software and hardware.
Kester (kester.com) will hold a lead-free mini-clinic at its booth during the ATE Show in Chicago on Sept. 28-30. Peter Biocca, senior market development engineer for lead-free implementation, and Gary Nicholls, Kester University administrator, will be on hand to answer future lead-free users' questions.
Kester's line of lead-free products will be on exhibit, and information on the Kester University lead-free training program will also be available.
Visitors are encouraged to bring their boards, components or soldered assemblies to discuss lead-free transition issues.
SCOTTSDALE, AZ, Sept. 9 - Advanced Systems Consultants (mpcps.com) is offering a three-day course on Machine and Process Capability Analysis and Improvement on November 8-10 at its Scottsdale facility. Mario Perez-Wilson, one of the original architects of Six Sigma, will teach participants practical methodology for efficiently characterizing, optimizing and controlling machines and processes.
The application-oriented course will focus on improving processes by maximizing yields, reducing scrap, minimizing defective rates and increasing the efficiency of manufacturing. Process delineation, metrology characterization, capability determination, optimization and control will be covered in-depth.
Perez-Wilson has over 23 years of industrial experience in engineering, quality and process improvement and is the author of nine books. He has served at the executive level as corporate vice president of quality for Flextronics International.
FRANKLIN, MA, Sept. 7-- Speedline Technologies Inc. (speedlinetech.com) reported second quarter sales up 61% over the same period last year. Bookings also rose, growing 85% over Q1 2003. At the end of the period, the business backlog was 3.5 times higher than at the same time last year.
"We saw continuation of the rigorous market recovery in electronics manufacturing that started in the first quarter," said Pierre de Villemejane, Speedline's president. "Cell phone and computer production was exceptionally strong, driving higher spending for capital equipment to expand capacity."
For the first half of 2004, sales were up 52% over the same period last year, while bookings climbed 69%.
de Villemajane indicated that sales were strong across all geographic regions: "In the Americas, electronics capital spending was expansion-driven, and our large contract electronic manufacturing customers invested heavily in new equipment. Mexico and Brazil also exhibited particularly strong signs of recovery."
According to de Villemejane, Hungary has emerged as the fastest growing European market. The expansion of lead-free processing is also driving growth in the U.K., Poland, Czech Republic and Turkey. Speedline's fastest growing Asian markets are China and Thailand.
In a statement, Fluke said it is consolidating its base of EMS providers. Plexus may in the future take over new product introduction, including design, prototyping and test.
"The latest numbers reflect a slower growth rate for worldwide sales of semiconductors as previously projected," said SIA president George Scalise. "A combination of factors - consumer uncertainty, inventory accumulation in key sectors, and seasonal issues in some markets - resulted in modest sequential sales growth from June.
Nevertheless, year-on-year sales were up 37.9% as demand for ICs continues to rage worldwide. The data are based on a three-month moving average of sales activity by 66 reporting semiconductor firms.
SIA predicted a strong finish to 2004. SIA guided for third-quarter sequential growth of 4 to 6%. "The industry remains on track for year-on-year growth of approximately 28% and record sales of $214 billion," Scalise said, citing the strong U.S. economy for creating favorable conditions for sales of PCs, autos, and consumer electronics.
"If these end-markets follow normal seasonal patterns, we expect to see solid growth rates for the semiconductor industry through the remainder of the year," Scalise said.
Inventory levels remain considerably lower than comparable levels in summer 2000. "There are also indications that consumer concerns over issues such as oil prices, the U.S. elections, and geopolitical developments are affecting household spending patterns.
Sales growth rates slowed sequentially in all regions except Europe. According to VLSI Research, capacity utilization is forecasted to decline slightly from 95% in the second quarter to 93% in the third.
TEMPE, AZ, Sept. 2 - The rate of growth in the manufacturing sector slowed in August but new orders and production remained strong. Manufacturing grew for the 15th consecutive month, said the Institute for Supply Management, based on its monthly poll of the supply chain.
The PMI, a leading measure of economic activity, was 59%, down 3 points and breaking a string of nine straight months above the 60% level. Still, the PMI was above the benchmark 50% level for the 15h straight month. New orders fell 3.5 points and production dropped 6.6 points.
Respondents focused on energy costs, price inflation in basic materials and slowing sales growth. "While the near-term outlook remains positive, both the inventories and customers' inventories indexes show signs of inventory building," ISM chairman Norbert Ore said. "Such a build may be justified if it is to meet additional sales demand, and if new orders and production remain strong."
Prices manufacturers pay were higher, driven by customer demand and energy costs. Customer inventories remain "too low," ISM said, although the rate of decline decelerated significantly during August. Backlogs rose, as did new export orders and imports.
Electronic Components and Equipment, and Industrial and Commercial Equipment and Computers were among the sectors reporting growth.
April May June July August
PMI 62.4 62.8 61.1 62.0 59.0
New orders 65.0 62.8 60.0 64.7 61.2
Production 67.0 64.8 63.2 66.1 59.5
Inventories 44.8 49.3 51.1 49.9 51.7
Customer inventories 40.5 37.0 39.0 37.5 45.5
Backlogs 66.5 63.0 58.5 58.0 55.0
Source: Institute for Supply Management, September 2004
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