Bright Future Forecast For European PCB Market, Despite Pressure On Prices.

LONDON--(BUSINESS WIRE)--Dec. 3, 1996--Despite a period of recessionary pressure with falling board prices and rationalization throughout the market, the outlook for the European printed circuit board industry is positive.

On the basis of strong performance in 1995, during which leading manufacturers reported increases in orders and improvement in sales, there is the expectation the market will stabilize and follow a steady growth pattern in the years to 2002.

This prediction comes from a new study from international market research consultant Frost & Sullivan, which forecasts and analyzes the European PCB market up to the year 2002, and presents in-depth profiles of 50 leading PCB manufacturers.

According to the study, the European market for printed circuit boards is a growing and highly competitive market, with not less than 850 companies present in the marketplace. After many years of steady growth in the 1980s, pushed by the continued development of the electronic data processing and telecommunications applications, the market was badly affected by the Europe-wide recession of 1992 and 1993. Revenues contracted, resulting in negative growth rates in these two years.

But in 1995, the industry staged a strong recovery, building on the growth initiated in 1994, with manufacturers reporting record expansion in revenues. With a 6.4 percent growth rate, the total European market for printed circuit boards was valued at $4.17 billion in 1995.

Although the market is only beginning to stabilize and uncertainty does remain, the outlook is fairly bright, with industry revenues expanding as demand within the electronics industry continues to increase. The industry is, however, still being affected by extreme pressure on prices and margins, despite increased volume sales. Nevertheless, it is forecast that the pace of recovery will step up toward the end of the forecast period, and revenues are expected to reach $7.03 billion in 2002.

In its analysis of the competitive environment, Frost & Sullivan notes that the European printed circuit board market continues to remain fragmented despite a sustained fallout over the previous years of recession. The trend, however, is of a market displaying a "Pareto" curve, with fewer but larger and more capitalized manufacturers accounting for a greater proportion of volume.

Thus, in recent years, the emerging groups include AT&S (Austria), the Ruwel Group (Germany), Forward Circuits (United Kingdom), the FELA Group (Switzerland) and the Zincocelere Group (Italy). On average, the four largest manufacturers in each of the European countries hold approximately 50 percent of the total national market share.

Although industry observers estimated that in 1995 the market contained approximately 900 merchant manufacturers, down from an estimated 2,500 in the early 1990s, a continued reduction in the number of participants is expected. Overcapacity in Germany and the United Kingdom is expected to maintain market rationalisation.

Future competitive factors seem set to include an increase in material prices and continuing price pressure from original equipment manufacturers (OEMs).

According to Frost & Sullivan, the major technology trends within the European PCB market are expected to center on the increased use of surface mount technology and large scale integration on silicon, along with buried and blind vias increasing wiring density.

In terms of the overall printed circuit board market, there has been a marked shift to multilayer products. Driven by requirements in the telecommunications and EDP markets, this sector is forecast to remain the dominant segment increasing its contribution to the market year on year. Multilayer boards with a layer count of more than 12 are forecast to demonstrate the highest growth rate between 1995 and 2002.

In terms of end-user application markets, the telecommunications sector is forecast to become the major market for multilayer, flexible, flexi-rigid and "other" boards, displacing EDP applications. This market is also forecast to be the dominant market at the end of forecast period, just edging out the industrial market. Assessing the PCB market by country, Frost & Sullivan found that Germany is the major market for printed circuit boards in Europe, accounting for 26.5 percent of the overall market of the overall market in 1995. This market is still expected to dominate in 2002 slightly increasing its market to 28.1 percent. Other significant markets are the United Kingdom, France and Italy.

Frost & Sullivan is an international marketing consulting company that monitors the SMT industry for market trends, market measurements, and strategies. This ongoing research is utilized to update a series of research publications and to support industry participants with customized consulting needs. Free executive summaries of all Frost & Sullivan reports are available to the press.

Report No.: 3160-28 Publish date: September 1996 Price: $1950

For information in the United States, please contact:

Amanda Christensen California 415/961-9000 ext. 231 415/961-5042 fax [e-mail] Or, visit our web site at: http://www.frost.com

For all other inquiries, please contact:

Kristina Menzefricke Stefan Gerhardt London Frankfurt 44.171.730.3438 49.69.235057 44.171.730.3343 49.69.234566

CONTACT: Frost & Sullivan

Amanda Christensen, 415/961-9000 ext. 231

Kristina Menzefricke, 44.171.730.3438

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