Aiming high: the trend in Japanese PCB manufacturing is optimistic and aggressive.

THE SEMICONDUCTOR INDUSTRY NEWS has been reporting 2006 forecasts and investment plans of the major circuit board manufacturers in Japan (TABLE 1).

The current demand situation of the printed circuit industry in Asia has not been very clear for a while now. Despite this uncertainty, most major PCB manufacturers in Japan have been forecasting double-digit growth for 2006--very different from last year when single digits ruled. Ibiden, NOK and CMK all expect billion-dollar revenues this year. Fujikura and Shinko Electric forecasted slightly smaller revenues, but they also expect remarkable increases compared to last year's results.

We should pay attention to these companies' aggressive investment plans as they relate to revenue forecasts for 2006. Many Japanese manufacturers are expecting stable long term growth.

Based on their investment programs we can conclude that IC substrates and flexible circuits need relatively large investments to keep up with forecasted production volumes.

May PWB Production in Japan

Japan's Ministry of Economy, Trade and Industry  (METI) released May production data for Japanese printed circuit board manufactures. The revenue data is listed in TABLE 2.

May 2006 did not show significant increases over April 2006; however, year to date comparisons between May 2005 and May 2006 do reveal considerable gains for all categories. Some categories experienced exceptional double digit gains. Industry revenue for May compared to April increased by 2% to 74 billion yen. Revenue for April 2006 increased by 18.4% compared to April 2005. Modest industry growth was sustained through April 2005 compared to April 2006 (+ 4.9%); however, May volume slipped 0.1% from the previous month. May's volume shipped totaled almost 2 million [m.sup.2] of PCBs. All rigid circuit board categories had double digit growth compared to last year, with the exception of single side circuits. Double side circuits and high layer counts boards were the standouts in growth.

Flexible circuits are not having a banner year, but they are showing an increase in revenue compared to last year. Since they posted double digit declines from 2005 compared to 2004, this could be considerable turn around. Double sided circuits and multi-layer flex were near double digit growth. Single side flex did not have a strong year. If the current trend continues however, flex production for 2006 will have a positive growth.

JEITA released the June shipment data for consumer electronics in July. The total revenue was 230 billion yen, an 8.5% growth compared to the same month of 2005. The industry showed continuous growth in the last 11 months.

DOMINIQUE NUMAKURA is president of DKN Research; [e-mail].

TABLE 1. 2006 Forecasts and Investment Plans for
Japanese Manufacturers

                       REVENUE
                      (CHANGE)        INVESTMENT
MANUFACTURER          (BILLION         (CHANGE)
                        YEN)        (BILLION YEN)

Ibiden *            193 (+21.5%)     41 (+135.6%)
NOK **               161 (+3.9%)    11.1 (+20.7%)
CMK *                130 (+9.1%)     18 (+87.5%)
Fujikura **         102 (+13.8%)     21 (+18.6%)
Shinko Electric *   100 (+20.5%)    35.8 (+132.5%)
Hitachi Chemical    57.5 (+4.5%)       6 (+20%)
Meiko                60 (+19.3%)     12 (+18.8%)
Sumitomo PC **      51.8 (+13.6%)    26 (+26.8%)
Toppan NEC *          48 (+20%)        5 (+25%)
Nitto Denko **      51.7 (+30.6%)      15 (+0%)
Panasonic ED         45 (+28.6%)    31.1 (+17.8%)
Daisho Denshi        33 (+6.5%)       10 (+100%)

* Major IC substrate suppliers ** Flexible circuit
manufacturers Exchange rate: 1.00 US$= 116 Japanese yen

TABLE 2. May 2006 Production for Japanese Manufacturers

                      REVENUE     CHANGE (%)   CHANGE (%)
                    (MIL. YENS)   FROM APRIL   FROM 2005

Rigid Boards          47,853         +0.5        +20.6
  S/S                  1,195         +1.9        -19.0
  D/S                 12,045         +1.6        +22.5
  4 Layers             9,481         +1.9        +10.4
  6-8 Layers          10,264         +1.5        +17.4
  10 & Higher          4,827         -4.4        +41.3
  Build-up            10,041         -0.7        +32.0
Flexible Circuits     10,772         -1.4         +4.8
  S/S                  4,116         -3.1         -2.3
  D/S and Multi        6,656         -0.4         +9.7
  Module Circuits     15,613         +0.4        +22.8
Rigid module           9,095         -1.5        +44.3
  Other module         6,518         +3.1         +1.6
  Other Circuits        173          -2.8         +4.2
Total                 74,411         +2.0        +18.4

* Major IC substrate suppliers **Flexible circuit manufacturers
Exchange rate: 1.00 US$= 116 Japanese yen