Component Orders Flatten in March.

Orders for electronic components flattened out, after steep declines in January and February, compared to the record growth levels from the first quarter of 2000. Comparisons to last year continue to point to a slowdown, but manufacturers are beginning to see some positive signs according to the Electronic Components, Assemblies & Materials Association (ECA, Arlington, VA).

The Department of Commerce reported that production figures rose 0.4 percent in March, the first increase since last September. Inventories of durable goods decreased in February, also for the first time in nearly a year. "Both indicators are good news for electronic component manufacturers," says Bob Willis, president. "We expect to see inventories continue to decrease and end-use markets begin to grow in conjunction with increased production rates."

Average selling prices for many electronic components rose during 2000 as shortages and demand ruled the market. While orders are down in the first quarter of 2001, pricing remains fairly stable across most industry segments.

"Orders are nowhere near their 2000 levels, but they are beginning to stabilize," says John Denslinger, senior vice president of sales for Murata (Smyrna, GA) and ECA vice chair. "Our average selling prices increased last year and they seem to be holding steady this year. We're beginning to see a lot of optimism for the second half of the year."

ECA's monthly index is derived from weekly order reports from approximately 30 electronic component companies. Although derived mostly from passive and electromechanical component companies, the index is representative of the economic trends in the general component industry.

Cell Phones: Flextronics Edges to the Top

A study released by Strategy Analytics (London, England) forecasts that Flextronics (San Jose, CA) will become Western Europe's second largest cell phone manufacturer with 34.5 million units, or an 18.4 percent production share, in 2001.

The report predicts that Flextronics will grow its European production share by 950 percent, and jump from number 9 to number 2 in Europe, with the completion of the Ericsson (Stockholm, Sweden) deal. With an 18.4 percent production share, Flextronics is closing in on Nokia's (Finland) European market of 22 percent.

These findings are presented in a study published recently by the organization within its Electronics Production Monitor, Europe service. This service provides companies in the telecom semiconductor industry with insights into key markets, technology and consumer behavior trends. The company's latest report, European Production of Telecommunications Equipment, provides analysis of eight major product categories within European telecoms production-including digital cellular handsets and digital cordless telephones.

For more information on the report, visit www.strategyanalytics.com.

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Copyright [copyright] 2001 Miller Freeman LLC