Strength in a downturn: good show, Tokyo. But flex is still carrying the load.

THE TRADE SHOW season began with InterNepcon, held at Tokyo International Center (Tokyo Big Sight ) Jan. 18-20. In spite of the downward trends of the electronics industry in Asia, the exhibition and conference were bigger than last year's show. Booths occupied every available space on the exhibit floor. I heard that many major companies were unable to reserve booths because of the limited amount of floor space.

The largest section of the show was devoted to lead-free soldering. Major suppliers such as Senju Metal, Cookson and Almit prepared huge booths to this end. They introduced not only soldering materials, but also whole systems, including machines. Their goal was to show manufacturers that they have the experience and capability to be ready when the Rolls Directive deadline rolls around in July 2006.

Flex was a major topic of conversation at InterNepcon. Unfortunately, the limited space on the show floor left room for only a half-dozen flex companies to exhibit. These companies such as Nippon Mektron and Fujikura were promoting pitches smaller than 30 microns with semi-additive or full additive processes.

Over 100 companies exhibited in the new fuel section of the show. These included not only final product manufacturers, but also the manufacturers of the materials, components and equipment. They were expecting a big market in portable electronics in the next few years. Cellular phones and notebook PCs are the major targets.

But the biggest buzz at the exhibition was the great number of the visitors. I don't know the actual amount, but it must have been over 100,000 attendees in three days. Every space on the floor was occupied with business people from opening until closing. I made a speech on flex circuit technology and the room was occupied with 200 people. More than 20 people formed a long line after the session to ask me questions.

Anyway, it was a crazy but exciting exhibition and conference.

Unfinished Business

METI of Japan released its Japanese PCB production data for October. As I had feared, there were clear downward signs.

Usually the PCB industry in Japan rebounds in September from the summer vacation, and it seems to increase shipments until the end of the year for Christmas sales. However, the rebound in September 2004 was not very strong. And October PCB production showed a 5% decline from September to 65 billion yen. This represents a 10% drop from the same period in 2003. The total shipment from January to October still had 6.3% growth over the previous year. Production for 2004 will be almost the same level as in 2003 if there is no strong rebound in the last two months.

Most of the products showed remarkable negative growth in October except double-sided rigid boards. The whole rigid boards segment had a 10.2% decline to 42 billion yen from the same period in 2003. Flex circuits dropped 13.4% to 13 billion yen, and IC substrates showed a 19.8% decline to 10 billion yen. The worst three categories could be rigid IC substrates (-28.4%), four-layer rigid boards (-18%) and single-sided rigid boards (-15.2%). Only double-sided rigid boards had remarkable growth (+17.6%) from the previous year.

The downward trends in Japan's PCB industry were very broad in October. Multiple major applications such as cellular phones and notebook PCs face a shrinking market. If there are no strong recovery signs in the next two months, I expect the slowdown in market demand will be relatively long.

Headlines

Sankyo Seiki (Component manufacturer in Japan). Completed the expansion of manufacturing capacity in China for optical pickups (used in CD-Rs and DVD-Rs) to 7 million units per month.

NTT DoCoMo (The largest cellular phone company in Japan). Introduced the world's first flat-panel speaker for the new model, N506iS. The whole display works as a speaker, and the user does not need to put the phone beside his ear.

Fuji Electric (Major electric/electronics company in Japan). Developed the world's highest memory density--162 Gb per [inch.sup.2]--for hard disc drive by vertical magnetic memory system.

FDK (Major passive component manufacturer in Japan). Commercialized the world's smallest 1A class chip inductor. The MIPF series is 40% smaller than previous products.

Mitsui Chemical (Major chemical company in Japan). Will increase the manufacturing capacity of cyclic olefin co-polymer 20%, to 3,400 tons per year, to cover the growing demands of DVD pickup lenses.

Pora Techno (Electronics material company in Japan). Will invest 5 to 6 billion yen for a joint venture in Taiwan to increase the manufacturing capacity of polarization films of LCD devices. The total capacity will be 8 million [meters.sup.2] per year.

Hitachi Chemical (Major electronics material company in Japan). Will invest 1 billion yen for a dry film resist plant in China. Most of the investment will be used for the production of insulation materials.

Daiwa Kasei (Electronics material supplier in Japan). Developed a new high-efficiency noise protector sheet. The new sheet will be used to protect against noise in LSI chips and PCBs up to 500 MHz.

Hitachi and Sony (Major electronics companies in Japan). Introduced a DVD recording system for the new VCR cameras.

Samsung Electronics (Major electronics company in Korea). Will start using multichip modules for multimedia applications in Japan.

Teijin Du Pont Films (Film manufacturer). Will increase the manufacturing capacity of the thick polyester films for the booming FPD industry in 2006.

Mitsubishi Material (Major material company in Japan). Has commercialized the world's smallest audio module for the power line communications. The module is available for export use only.

Nitto Denko (Major electronic material and flex circuit manufacturer). Co-developed a new electrode membrane material for the methanol base fuel cells with Japan Atomic Energy Research Institute.

Sharp (Major electronics company in Japan). Will introduce the eighth-generation manufacturing line of LCD panels for the next new plant for large TVs. The panel size will be 2.2 x 2.4 m. Will re-start the business of rear-projection TVs for the American market.

Aica Gokyo (PCB material manufacturer in Japan). Co-developed with Toppan Forms a new flexible IC labels for non-flat surface of equipment.

Pioneer (Major electronics company in Japan). Has been developing a next-generation memory device with a memory capacity equivalent to 100,000 DVDs (3 petabits) in a 1 inch square.

Ibiden (The largest PCB manufacturer in Japan). Is planning to invest 23 billion yen for the 2005 fiscal year. It is 2 billion yen smaller than the previous plan because of the downturn.

Nippon Electric Glass (Major glass manufacturer in Japan). In Korea, will open a new manufacturing subsidiary of glass substrates for the growing LCD market. Annual capacity: 3 million [meters.sup.2].

Chunghwa PictureTubes (Major display manufacturer inTaiwan). Will invest NT$220 billion in their seventh-generation LCD manufacturing process. The budget was reduced from the original amount, NT$420 billion.

ShinEtsu Semiconductors (The largest silicon wafer supplier). Will invest 100 billion yen in Japan and the US to expand capacity for 300 mm wafers. The total capacity will be 700,000 wafers per month in 2007.

DOMINIQUE K. NUMAKURA is managing director of DKN Research and publisher of Electronic Packaging Technologies. He can be reached at [e-mail].