CircuiTree - July 2008 - (Page 40)

By Walt Custer and Jonathan Custer-Topai Electronic Equipment, Semiconductors, and PCBs: Has Short-Term North American Growth Peaked? n the ﬁrst quarter of this year the North American electronics industry seemed to weather the recession storm clouds reasonably well. However, as the second quarter unfurls, there may be more reason for concern. In spite of the weak dollar helping U.S. exports, local electronic equipment consumption must be feeling the pinch. With more and more formerly disposable income now being spent at the gas pump and food store, and record home foreclosure levels, we can only assume that all but the wealthy will have to curtail discretionary electronics purchases. And, in fact, the numbers are beginning to reﬂect a slowdown. Domestic electronic equipment order and shipment growth may have peaked in March (Chart 1) as the 3/12 rate-of-change headed south in April. We are still in positive territory (3/12 > 1.0) but an end-market slowdown appears in process. April semiconductor shipment growth looked quite promising (on the surface). Per Chart 2, chip shipments to North America (a measure of electronic assembly activity) were up 6 percent in 4/08 versus 4/07. Chart 1 Chart 3 However, much of the April 2008 chip growth appears to have been due to semiconductors playing catch-up with electronic equipment. Chips and equipment should grow at the same rate—but they rarely do this. Excess ordering and inventory builds are typically followed by downward corrections. Per Chart 3, chip growth has been below end-market demand since early last year. Presumably excess chip inventories were built in 2006, which had to be worked down in 2007. Then, in late 2007 through early 2008, excess inventories were depleted and chip shipments growth picked up. However, we now appear at an upper turning point. Electronic equipment growth is slowing and presumably semiconductor growth will soon peak and begin to correct downwards. North American PCBs are playing the same game. Per Chart 4, rigid PCB shipments were up an impressive 12.2 percent and orders up 5.6 percent in April 2008 versus April 2007. However (Chart 5), PCBs (like chips) recently appear to have experienced inﬂated growth due to catching up—hence the nice ﬁrst quarter North American printed cirChart 2 Chart 4 40 July 2008 • circuitree.com http://circuitree.com

Table of Contents Feed for the Digital Edition of CircuiTree - July 2008

CircuiTree - July 2008 Contents My Line Industry Review Tech Talk Flexible Thinking Toward a PCB Production Floor Metric for Go/No Go Testing of Lossy High-Speed Transmission Lines Intelligent Design 20-Year Retrospective Ask the Flexperts Environmentally Speaking BPA Growth Curves Considering Design Variants to Maximize Process Efficiency Market Outlook Technical Product Spotlights Classified Ads Upcoming Events Ad Index

CircuiTree - July 2008

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