Asia: supply and market: led by demand for consumer electronics--and flexible circuits--Asian board makers remain in the pole position.For the past few years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time business environment in Asia has outpaced both the European and North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. markets. Production of all classes of PCBs has, in some cases, seen double-digit increase rates, with flexible interconnects leading the way. The growth was a direct result of the demand for consumer electronics such as cell phones, notebook computers A laptop computer that weighs in a range from five to seven pounds. The term originated when laptops were routinely more than 10 pounds, and those that became lighter were placed in a special "notebook" category. In practice, notebook computer and laptop computer are synonymous. , DVD players A stand-alone device that plays DVDs. It contains a DVD drive and the electronics to decode the digital video. The device may play only manufactured DVDs, or it may be able to play DVD-R, DVD-RW and DVD+RW discs. DVD players are cabled to a TV or home theater system for display. and flat-panel TVs. Other markets served include a growing automobile segment, communication devices other than cell phones, desktop computers and motherboards. The last half of 2004 has seen a slowdown in production of both hard boards and flex. There are various reasons for this, the most predominate being an overstock o·ver·stock tr.v. o·ver·stocked, o·ver·stock·ing, o·ver·stocks To stock more of (something) than necessary or desirable. n. An excessive supply. Verb 1. of cell phones and notebook computers in Japan and the U.S. Japan seems to be the hardest hit in the slowdown whereas Taiwan, Korea and China have maintained or increased production rates for the year. All indications point to limited growth for the year-end 2004 but nowhere near the exceptional rate seen in the past two years. There is a trend to outsource much high-volume production to China and keep the higher technology interconnects in their respective countries. This trend follows the projection of increased demand for HDI HDI Human Development Index (UNDP yardstick of human welfare) HDI Help Desk Institute HDI Humpty Dumpty Institute (New York, New York) HDI High Density Interconnect in almost all of the market segments on a worldwide basis. See FIGURE 1. Rigid board production is only growing at half the rate of flexible interconnects in Asia. (1) The total worldwide volume of rigid and flex production in 2003 was reported to be US$33.6 billion. (2) Similar results are seen in the EMS side and semiconductor shipments. [FIGURE 1 OMITTED] Japan Japan remains the predominate player in the Asian market, accounting for clearly one quarter of all of the printed circuits manufactured worldwide. Rigid boards amount to 70% of the total revenues, generating 1.07 trillion yen, while the total companies involved are nearly split evenly: 141 reported being rigid manufacturers and 151 being flex and rigid-flex. (3) At the beginning of the year the manufacturers were optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that 2004 would see renewed growth and the first half of the year seemed to support this optimism. However, the second half has seen a significant reduction in production rates due to an overabundance o·ver·a·bun·dance n. A going or being beyond what is needed, desired, or appropriate; an excess: teenagers with an overabundance of energy. of product stocked by the customers. Additionally, last year boasted a very active typhoon typhoon: see hurricane. season, with nine striking Japan and causing wind and water damage in a number of cases. Added to this were at least two major earthquakes that disrupted the manufacturing process. High-volume production has also been transferred offshore, mainly to China, where the labor rates allow for lower selling prices compared to the costs of production within Japan. The outlook for 2005 does not appear to be as optimistic as in years past, with most looking to the second half of the year before double-digit increases are expected. Overall, a modest increase of 8% is expected. China China has reported growth this year of over 50% in both quantity and value. (4) Some of these figures must be viewed with caution, as a number of the companies reporting are foreign-owed and the parent company also reports their China operations in their own yearly figures. Needless to say, there have been increases within China as more companies either selected Chinese companies Chinese owned companies can be defined as enterprises within mainland China, Hong Kong, Macau and the Republic of China (Taiwan):
Flex manufacturing is now being performed at over 200 companies in China, ranging from the small proto shops to others with over 50 [m.sup.2] of production space. Flex in China is +reported to account for a full 17% of worldwide production, overtaking Taiwan, Singapore and Korea to become number two in Asia behind Japan. (5) China also continues to export workers to other Asian countries Noun 1. Asian country - any one of the nations occupying the Asian continent Asian nation country, land, state - the territory occupied by a nation; "he returned to the land of his birth"; "he visited several European countries" to work in the manufacturing of PCBs. Due to the restrictive nature of some of the Chinese laws Chinese law Law that evolved in China from the earliest times until the 20th century, when Western socialist law (see Soviet law) was introduced. The oldest extant and complete Chinese law code was compiled in AD 653 during the Tang dynasty. and the protective import and export regulations, China remains a growing center for the lower technology interconnects while the high-density manufacturing remains outside of its borders. Taiwan Although Taiwan remains third among Asian manufacturers with 13% of the worldwide production, it has seen double-digit increases in the higher technology interconnects such as HDI flex and IC substrate applications. (6) In addition to the more than 40 flex companies now in operation, there has also been an increase in the number of substrate suppliers doing business there. Volume production has been shifting to the lower-cost area of mainland China, while keeping the higher technology products such as multilayer boards, rigid-flex and multilayer flex in their own facilities. See FIGURE 2. The products leading this growth within Taiwan have been flexible circuits and IC substrate manufacturers, with total revenues for these two approaching NT$50 billion out of a total production value of NT$243 billion. See FIGURE 3. Still leading domestic production value is multilayer, accounting for 43% of the total revenue generated. (7) [FIGURES 2-3 OMITTED] Korea Another bright spot in Asian manufacturing is Korea, with all of the flex manufacturers seeing 50% increases in revenues generated last year, while the total rigid and flex suppliers provided 8.5% of the worldwide production. (8) Both the rigid and flex companies apply insider preferences in both suppliers and the end-customers they produce for. This philosophy stems from the Korean government's earlier attempt to limit the number of suppliers able to provide products to OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and manufacturers to only Korean companies. These regulations have been relaxed over the years and now the most cost-effective suppliers are able to do business in Korea. They are also very protective of their own intellectual property, only outsourcing the lowest level of production to their overseas locations, in order to compete on the world market they have relied on automation instead of offshore sites' cheap labor. This has worked better for rigid boards than for flex, because of the labor-intensive operations necessary for flexible interconnects. The cell phone is the largest single market, with over 50% served, with Samsung and LG Electronics being the major players. Korea has been heavily dependent on its Japanese counterparts to provide the direction for their technology roadmaps The context of product management The existence of product managers in the product software industry indicates that software is becoming more and more commercialized as a standard product. , usually following Japan by six to 12 months. This trend is being reduced by the Korean government's decision to allow recouping of R&D funds over a 2-3 year period. This has provided the impetus for indigenous R&D efforts to become a large percentage of capital reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. back into their own companies. There are approximately 100 circuit manufacturers now in Korea with more being added each year. ROBERT L. TURUNEN is vice president of DKN Research (Haverhill, MA). He can be reached at turunen@comcast.net. DOMINIQUE K. NUMAKURA is managing director of DKN Research and publisher of Electronic Packaging Technologies. He can be reached at dnumakura@attglobal.net. REFERENCES (1.) Japanese Printed Circuit Association (JPCA JPCA Japan Petrochemical Industry Association ) Electronics Circuit Industry Survey Report 2004 (2.) Taiwan Printed Circuit Association (TPCA TPCA Toyota Peugeot Citroën Automobile (Czech Republic) TPCA Texas Pest Control Association TPCA Texas Petroleum Marketers and Convenience Store Association TPCA Toxic Pits Cleanup Act TPCA Tennessee Primary Care Association ) Flash News 2004 (3.) JPCA (4.) China Printed Circuit Association news release, June 28, 2004. (5.) PCB PCB: see polychlorinated biphenyl. PCB in full polychlorinated biphenyl Any of a class of highly stable organic compounds prepared by the reaction of chlorine with biphenyl, a two-ring compound. 007 news release, Nov. 22, 2004 (6.) TPCA (7.) TPCA (8.) TPCA |
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