Ups and downs in America: beaten up during the just ended recession, U.S. makers are relying on 50 years of "people skills" to recapture the glory days.After two and a half agonizing years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time 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. business "all of a sudden" showed signs of life late last August. First felt in Asia two to three weeks earlier, the recovery has spread everywhere, although Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). is in general still weak by comparison. Those PCB makers that
endured and survived reorganized re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. their business models and are once again in growth mode. In this article, we pay special attention to the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. PCB industry, whose output slowed to half of its peak (in 2000), but now shows strong growth. We examine the region's history and me how many companies disappeared, changed hands and resurged trader different names. In 1966 this author attended his first IPC (1) (InterProcess Communication) The exchange of data between one program and another either within the same computer or over a network. It implies a protocol that guarantees a response to a request. meeting. In that meeting, IPC assessed the world PCB output to be about $500 million, slightly more than half of which came from the U.S. (or more appropriately, North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Traditionally, our neighbor, Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , has produced about 10% of the continent's output, while Mexico's output is very small, less than 2% of the total. Therefore, hereafter In the future. The term hereafter is always used to indicate a future time—to the exclusion of both the past and present—in legal documents, statutes, and other similar papers. "U.S." includes all North America). The ups and downs ups and downs pl.n. Alternating periods of good and bad fortune or spirits. ups and downs Noun, pl alternating periods of good and bad luck or high and low spirits of the industry, as shown in TABLE 1, are interesting in that they are more or less in sync with cycles of the general economy, with one exception: the late 1970s. The U.S. economy (and therefore, its PCB industry) followed a cyclic cyclic /cyc·lic/ (sik´lik) pertaining to or occurring in a cycle or cycles; applied to chemical compounds containing a ring of atoms in the nucleus. cy·clic or cy·cli·cal adj. 1. pattern of about four years up until 1991. Following the oil embargo Oil embargo may refer to:
The U.S. economy was flooded with imports in the mid '80s, particularly from Japan, whose currency exchange rate was about 270 yen to the dollar. In 1985, the finance ministers of seven nations got together at the Plaza Hotel The Plaza Hotel in New York City is a landmark 19-story luxury hotel with a height of 250 feet (76 m) and length of 400 feet that (122 m) occupies the west side of Grand Army Plaza, from which it derives its name, and extends along Central Park South in Manhattan. in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. to discuss how to correct the situation. This meeting resulted in the "Plaza Accord Plaza Accord Agreement among country representatives in 1985 to implement a coordinated program to weaken the dollar. ," the main decision of which was to let the Japanese yen “Yen” redirects here. For the other use, see Yen (disambiguation). “JPY” redirects here. For the Australian singer with the same moniker, see John Paul Young. float. As a result, the yen appreciated nearly 100% almost overnight, rising to 140:$1. This forced Japanese exporters to rush to low-cost southeast 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" for production. Ironically i·ron·ic also i·ron·i·cal adj. 1. Characterized by or constituting irony. 2. Given to the use of irony. See Synonyms at sarcastic. 3. , Japan came back stronger than before, the start of its "bubble A bit in bubble memory or a symbol in a bubble chart. economy," which burst in 1991. Completely out of sync Out of Sync: A Memoir is the upcoming autobiography of American pop singer Lance Bass, set to be published on October 23, 2007. It features an introduction by Marc Eliot, a New York Times , 1991 was the year the U.S. economy started to recover, following a dip in late 1989. Over the next nine years, the U.S.'s version of the bubble inflated, until the end of 2000. It is painful to recall what happened in 2001 through the better part of 2003. The statistics compiled by IPC in the early 1970s may not be accurate, but assuming they are, U.S. PCB production increased by 22 times over the 30-year period from 1970 to 2000. In 1989, this author happened to record sales revenues of the top 30 U.S. makers (one Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. maker, Circo Craft, was included). The following year, a year in which a general recession began, marked the beginning of the end for many captive captive said of naturally wild or feral animals kept in captivity for educational and scientific investigation with no attempt being made to domesticate them. PCB shops, which were sold or closed. We shall discuss the fate of captive shops later. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. FabFile data compiled by Harvey Harvey, city (1990 pop. 29,771), Cook co., NE Ill., a suburb S of Chicago; inc. 1895. Its manufactures include steel castings, metal products, chemicals, machinery, and electronic equipment. Harvey has an oil research center. The city was founded by Turlington W. Miller, PTH PTH abbr. parathyroid hormone Parathyroid hormone (PTH) A chemical substance produced by the parathyroid glands. This hormone is a major element in regulating calcium in the body. board production capacity in 2000 in the U.S. was halved halve tr.v. halved, halv·ing, halves 1. To divide (something) into two equal portions or parts. 2. To lessen or reduce by half: halved the recipe to serve two. 3. by 2002, and the total number of employees bottomed out at 42,000, from a peak of 75,000. It is estimated that the U.S. PCB manufacturing sector employed 90,000 including about 15,000 part-timers. By the end of 2002 nearly all part-timers had lost their jobs. The 2002 U.S. PCB output reflects the reductions in capacity and employment. The slight increase in 2003 output is thanks to the strong recovery of business that began that August. 2004 will see growth of about 11%, judging from the current state. However, not all of this will come from increases in volume; inflation will account for some gains. The U.S. PCB industry maintained a 28 to 30% share of the world production until 2000. Japan owned an equal share. Onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. U.S. production dropped to 16% in 2003, although U.S.-owned makers maintained close to a 20% share of world production once their factories overseas are accounted for. China took over the No. 2 position, and may overtake o·ver·take tr.v. o·ver·took , o·ver·tak·en , o·ver·tak·ing, o·ver·takes 1. a. To catch up with; draw even or level with. b. To pass after catching up with. 2. Japan as the leading PCB producer by the end of 2007. Back to the U.S. market. TABLE 2 reveals several interesting items. 1. In 1989, of the top 30 PCB firms, 11 were captive makers, whose shares accounted for 56% in that year. By 1999, only two captive shops made the top 30. By 2003, captive shops were all but extinct. 2. In 1989, $200 million in overseas production came from IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) plants in Yasu, Japan, and Sindelfingern, Germany, and Hewlett Packard Europe. Over the next decade, overseas production by U.S. firms shot up to $1 billion, a whopping increase. It gained an additional 34% from 1999 to 2000 ($1.34 billion) and stayed about the same in 2003 (FIGURE 1). 3. Practically all of the overseas production started as acquisitions, with the exception of flex circuit See flexible circuit. operations. Acquired operations have been expanded considerably since. 4. By 2000, all but five of the Top 30 in 1989 lost their original names due to acquisitions or simply going out of business. 5. It is nearly impossible to make an accurate assessment of bare-board revenue from flex-circuit makers. 3M has flex manufacturing facilities in three countries: the U.S., Japan and Singapore. 3M does not breakout revenues derived from its flex activities; its 2003 output ($280 million) is a wild guess. Innovex has a finishing plant and an assembly plant in Thailand. Of the company's 2003 revenue of $168 million, it is estimated that $100 million comes from Thailand (including assembly value). The U.S. operation of M-Flex may have generated just $40 million and here again, $100 million or more may have come from its plant in Suzhou, China. Parlex is engaged in assembly operations and about half of its revenue seems to have come from China operations. Listing flex makers alongside rigid-board makers may be comparing apples and oranges. Evaluate the positions with caution. 6. The top 15 makers in 2003 reported potential growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. of between 10% and 50% for calendar 2004. This, combined with higher prices, will likely boost U.S. PCB output by 10 to 15% overall (11%, conservatively) in 2004. The U.S. industry has been characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by myriad Myriad is a classical Greek name for the number 104 = 10 000. In modern English the word refers to an unspecified large quantity. The term myriad is a progression in the commonly used system of describing numbers using tens and hundreds. mergers and acquisitions. The total purchase price and subsequent expansion and closure costs shouldered by U.S. makers to date is an estimated $4.5 billion to $5 billion. The experience of those acquirers was very expensive, to say the least. Looking at U.S. PCB history, the combined revenue of the top 30 makers increased by 120% from 1989 ($2.49 billion) to 1999 ($5.5 billion). It gained 39% from 1999 to 2000. The share of the Top 30 increased dramatically, mostly via acquisitions. In 2003, the Top 30's share dropped by 52%, to $3.71 billion (overseas production included) from $7.67 billion in 2000. Domestic North American production increased 88% from 1989 to 1999 and an additional 40% from 1999 to 2000. However, it lost steam, falling to $2.37 billion in 2003 from $6.28 billion in 2000, a 62% decline. Overseas production, on the other hand, increased tremendously over the past 14 years. As large U.S. makers beef up capacity, particularly in China, production abroad will continue to increase. The production value by captive shops is probably less than 1% of the overall market today. It is said that at some point in the 1970s, there were close to 2,000 PCB manufacturing facilities in the U.S. Probably more than 60% were captive. Hewlett-Packard once owned 11 shops, counting one in Queensferry, Scotland, and one in Germany. Ten years ago the majority of China's PCB facilities were state-owned. Most of these makers in China--the equivalent of captive--will disappear in the next several years. U.S. chemical companies have done much better than PCB makers, even during the last recession, because they developed their businesses in Asia early on. Moving the production of chemicals to overseas facilities is much easier than doing so with PCB plants. More than half their revenues are derived from sales in Asia today Asia Today is a programme produced by BBC News specifically for the continent of Asia. It is shown on BBC World predominantly, but also on other international BBC channels, including BBC America. , for some as much as 80%. U.S.-based equipment makers have not faired as well because their technologies are not so easily transported as those of chemicals. The past three years have been very harsh on Verb 1. harsh on - criticize harshly; "the teacher keeps harshing on the same kid" criticise, criticize, pick apart, knock - find fault with; express criticism of; point out real or perceived flaws; "The paper criticized the new movie"; "Don't knock the food--it's these companies. On the other hand, European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. equipment makers faired better, in part because the euro was low versus the Chinese RMB RMB Right Mouse Button RMB Regional Management Board (USACE) RMB Rolf Maier Bode (musician, band) RMB Ren Min Bi (currency of People's Republic of China) during most of the recession. However, the euro has appreciated some 40% against the RMB (which is pegged peg n. 1. a. A small cylindrical or tapered pin, as of wood, used to fasten things or plug a hole. b. A similar pin forming a projection that may be used as a support or boundary marker. 2. to the U.S. dollar), and Europe now faces a tough time for trade. Today, U.S. production seems to be confined to be in childbed. See also: Confine to: * Quickturn and prototyping. * Specialty products for military electronics, medical electronics, industrial control, IC probe cards A probe card is an interface between an electronic test system and a semiconductor wafer. Its purpose is to provide an electrical path between the test system and the circuits on the wafer, thereby permitting the testing and validation of the circuits at the wafer level, usually , flexible and rigid-flex boards in small-to-medium quantities. Medium- to high-volume products are still made, but above 18 layers. All other categories are more or less extinct. In the early '90s, Asian makers could not make PCBs of eight layers and above reliably in volume. Fur the most prominent Asian makers, making higher layer-count MLB MLB Major League Baseball MLB Minor League Baseball MLB Middle Linebacker (football) MLB Motor Life Boat MLB Matt Leblanc (actor) MLB Mother Love Bone (band) became very attractive, thanks to the higher prices and demand for these products. As Asia ramped capacity of higher layer-count MLBs, prices slid in reverse proportion and as a result, the U.S. price was also dragged down. The higher the layer count, the faster the price erosion. Mass-produced boards below 14 layers are now purchased in the Asia-Pacific region. Fortunately, there are still substantial programs for U.S. makers that command higher prices regardless of layer count, albeit in smaller quantities. According to FabFile, more than 500 PCB makers remain in the U.S. The majority have annual revenues below $10 million, but a number can fabricate boards up to 40 layers using exotic laminate laminate, n a thin slice of porcelain or plastic fabricated in a dental lab, which is cemented to the front of the teeth to cover gaps, whiten stained teeth, or reshape chipped or broken teeth. materials. These small companies lack the fancy production equipment seen in new Asian shops, but what makes them shine are people skills. Such skill is unlikely to migrate easily to Asia Pacific unless companies that have facilities both in the U.S. and in Asia willingly export their "people knowledge." Even so, the transfer of such skills is not a trivial TRIVIAL. Of small importance. It is a rule in equity that a demurrer will lie to a bill on the ground of the triviality of the matter in dispute, as being below the dignity of the court. 4 Bouv. Inst. n. 4237. See Hopk. R. 112; 4 John. Ch. 183; 4 Paige, 364. feat. What also remains in the U.S. is the ability to develop new ideas "New Ideas" is the debut single by Scottish New Wave/Indie Rock act The Dykeenies. It was first released as a Double A-side with "Will It Happen Tonight?" on July 17, 2006. The band also recorded a video for the track. and maintain a skill level that took 50 years to accumulate Accumulate Broker/analyst recommendation that could mean slightly different things depending on the broker/analyst. In general, it means to increase the number of shares of a particular security over the near term, but not to liquidate other parts of the portfolio to buy a security , and the proximity to customers and ability to communicate in the same language. These latter traits are particularly important during initial stages of new-product development. It will be a long time--if ever--before the U.S. PCB industry regains the glory of 2000 but those makers that survived seem to have come back stronger.
TABLE 1. U.S. PCB Production, 1957-2004
YEAR $ MILLION GROWTH (%) COMMENTS
1957 30 IPC founded
1970 500 AAGR was 21% from 1957 to 1970
1971 450 -10 Recession; lots of layoffs
1972 600 33
1973 900 50
1974 1000 11
1975 750 -25 Israel-Arab War, followed by
oil crisis
1976 1000 33
1977 1400 40
1978 1800 29
1979 2200 22
1980 2700 23
1981 2800 4
1982 2924 7
1983 4060 24
1984 4943 22
1985 4080 -17 "Unfair" currency exchange
rates, Plaza Accord
1986 4033 1 Japanese yen shot up in value
by 100% in one year
1987 5127 27
1988 5941 16
1989 5738 -3 Recession hits
1990 5432 -5
1991 5250 -4 A decade of prosperity and
bubble economy
1992 5500 4
1993 5530 1
1994 6229 13
1995 6846 10
1996 7572 11 Viasystems formed, triggers
M/A activity
1997 8179 8
1998 8234 1 Why was growth so small?
1999 8965 9 Everyone buying and selling
shops
2000 11530 29 Softening begins in November
2001 7380 -36 Worst PCB recession, lasts 30
months
2002 5367 -28 Massive industry reorganization
2003 5468 2 "Sudden" recovery in latter
half of August
2004E 6042 11 Robust recovery expected, some
growing by 50%
Notes: Method of data collection was crude until about mid '80s. World
output estimated about $500 million total in 1966.
TABLE 2. Leading North American PCB Makers, 1989-2003
CO. 1989 SALES CO.
1. IBM * 415 Hadco
2. AT&T * 240 Tyco
3. Hadco 152 Viasystems
4. DEC * 125 Sanmina
5. Diceon 125 Photocircuits
6. Photocircuits 122 Honeywell ACI
7. H-P * 110 IBM *
8. Zycon 85 DDi
9. Tyco 82 Multek
10. ACI 75 Merix
11. Circo Craft 74 TTM
12. Unisys * 70q Compeq Int'l
13. Sigma Circuits 65 Innovex
14. Tektronix * 64 Teradyne
15. Bureau of Engraving 63 3M
16. Continental (AZ) 55 Sheldahl
17. ACID Litton 55 Toppan
18. Universal 53 Circuit Systems
19. Altron 52 Parlex
20. Rockwell * 48 Circuit-Wise
21. Lika/Tandy 44 Automata
22. Circuit-Wise 42 The Bureau
23. GE * 40 ACID Litton
24. TI * 38 Mektec
25. Aero Scientific 38 S. Bay Circuits
26. Amp-Akzo 38 Raytheon *
27. Cray Research * 35 Herco Tech.
28. Automata 32 Carolina Circuits
29. Parlex 29 Omni Circuits
30. Honeywell * 28 Korea Circuit AM
Top 30 subtotal 2494 120%
Domestic 2394 88%
Overseas 200 500%
Captive 1409 -74%
CO. 1999 SALES CO.
1. IBM * 816 Sanmina-SCI
2. AT&T * 540 Viasystems
3. Hadco 498 Multek
4. DEC * 390 Tyco PCB
5. Diceon 380 DDi
6. Photocircuits 350 Photocircuits
7. H-P * 320 Honeywell ACI
8. Zycon 275 IBM *
9. Tyco 271 3M
10. ACI 140 TTM
11. Circo Craft 130 Manx
12. Unisys * 120 ACD Litton
13. Sigma Circuits 120 Teradyne
14. Tektronix * 110 Compaq Int'l
15. Bureau of Engraving 100 Innovex
16. Continental (AZ) 90 M-Flex
17. ACID Litton 78 Parlex
18. Universal 77 Toppan
19. Altron 76 Circuit Systems
20. Rockwell * 76 Circuit-Wise (1)
21. Lika/Tandy 75 Sheldahl
22. Circuit-Wise 74 M-Wave (2)
23. GE * 66 Int'l Flex Tech.
24. TI * 55 S. Bay Circuits
25. Aero Scientific 53 Grupo Eurocir
26. Amp-Akzo 50 Pycon (3)
27. Cray Research * 49 Ambitech (4)
28. Automata 45 Electropac
29. Parlex 40 Coretec
30. Honeywell * 36 Hallmark (5)
Top 30 subtotal 5500 39%
Domestic 4490 40%
Overseas 1010 37%
Captive 370 -32%
CO. 2000 SALES CO.
1. IBM * 1500 Viasystems
2. AT&T * 1250 Sanmina-SCI
3. Hadco 780 Multek
4. DEC * 550 Tyco
5. Diceon 450 3M
6. Photocircuits 403 Photocircuits
7. H-P * 360 DDi
8. Zycon 250 TTM
9. Tyco 250 Innovex
10. ACI 203 M-flex
11. Circo Craft 195 Hutchinson
12. Unisys * 150 Merix
13. Sigma Circuits 145 EIT (former IBM)
14. Tektronix * 130 Parlex
15. Bureau of Engraving 120 Sheldahl
16. Continental (AZ) 100 Teradyne
17. ACID Litton 90 Coretec
18. Universal 85 Compaq Int'l
19. Altron 80 Northrop Grumman
20. Rockwell * 75 Unicircuit
21. Lika/Tandy 65 Amitron
22. Circuit-Wise 57 Electropac
23. GE * 55 Lone Star
24. TI * 53 Marcel
25. Aero Scientific 50 Minco Products
26. Amp-Akzo 50 Holaday Circuit
27. Cray Research * 47 Advance Circuits
28. Automata 42 Westak
29. Parlex 40 S. Bay Circuits
30. Honeywell * 40 Saturn Electro.
Top 30 subtotal 7665 -52%
Domestic 6278 -62%
Overseas 1387 -3%
Captive 250 -100%
CO. 2003 SALES
1. IBM * 430
2. AT&T * 360
3. Hadco 350
4. DEC * 330
5. Diceon 280
6. Photocircuits 234
7. H-P * 195
8. Zycon 180
9. Tyco 163
10. ACI 146
11. Circo Craft 120
12. Unisys * 113
13. Sigma Circuits 110
14. Tektronix * 82
15. Bureau of Engraving 73
16. Continental (AZ) 68
17. ACID Litton 52
18. Universal 51
19. Altron 50
20. Rockwell * 45
21. Lika/Tandy 33
22. Circuit-Wise 31
23. GE * 30
24. TI * 30
25. Aero Scientific 29
26. Amp-Akzo 28
27. Cray Research * 27
28. Automata 25
29. Parlex 24
30. Honeywell * 23
Top 30 subtotal 3712
Domestic 2370
Overseas 1342
Captive 0
1. 2003 overseas sales: $13 million. 2. 2003 overseas sales:
$8 million. 3. 2003 overseas sales: $18 million. 4. 2003
overseas sales: $17 million. 5. 2003 overseas sales. $21
million. Source: N.T. Information Ltd., May 2004
FIGURE 1. PCB production by U.S. companies
overseas topped $1.3 billion in
2003, more than half in China.
China (50.8%)
Other
Asia (27.6%)
Europe (18.6%)
Latin
America (3%)
Source: N.T. Information
Note: Table made from pie chart.
DR. HAYAO NAKAHARA is president of N.T. information (Huntington, NY) and consulting editor to PCD&M. He can be reached at 631-673-8571; nakanti@optonline.net. |
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