CircuiTree - April 2009 - (Page 30)

BPA Growth Curves By Francesca Stern Where are Headline the “Green Shoots of Recover?” n contemplating the content of this quarterly column, the British Baroness Shriti Vadera’s unfortunate declaration in early January sprang to mind, i.e. that “a few green shoots of recovery” were visible, while all around companies were ﬁling for bankruptcy and millions of workers were being made redundant. However, it is really more appropriate to consider the positive rather than the negative. It is true that the electronics sector is now in a downturn similar to, but not the same as, what was encountered in 2001-02 with the dot-com crash. There are several distinct differences. In 2001-02, the downturn was conﬁned to mainly the communications and computer sectors and also was worst in Europe and North America. Throughout this ﬁrst downturn, manufacturing capacity transferred to Asia, particularly to China. This time round, every sector and every region is affected. However, while Europe and North America have implemented much improved inventory control and are now less dependent on large volume orders, Asia has become very dependent on large volume orders. Asia (with the exception of Japan) also has not experienced such a severe downturn before and the fall in orders has given rise to excessive inventories, which need to be used up before further orders can be placed with suppliers. At the time this article was written, PCB fabricator capacity utilization in Asia has reduced by up to 50 percent and laminators and other material suppliers have seen their order books reduced accordingly. Now where are the green shoots of growth? BPA’s 2009 semiconductor forecast shows a depression that will last through 2009 and into early 2010. Not as deep as 2001 and 2002, but certainly of longer duration. Figure 1 represents the 12/12 growth curve for semiconductor shipment value. Again, at the time this article was written, the most recent number available is for the end of November 2008. The 12/12 values based on actual data are rep- I resented by the pink data points. Quarterly year end results indicate that Q408 will be at least 20 percent down on Q308 for most of the leading semiconductor companies. The cyclical curves generated from historical results indicate that Q1 and Q2 09 will continue the depression. The downturn will soften in the second half of 2009 and positive growth will be in place by 2010. Semiconductor shipments are dominated by demand for semiconductors in Asia and, thereby, closely interlinked with demand for PCBs and electronics manufacturing in Asia. The 12/12 growth curve for PCB produc- tion in Asia (see Figure 2), therefore, shows a similar but slightly less depressed downturn through 2009 than the semiconductor growth curve (as one would expect at this level of the supply chain). The positive side of all of this is that, in many companies, research and development to produce smaller or alternative, more efﬁcient, more functional, safer, more reliable, and more environmentally friendly products is still continuing and this is what will drive a need for improved materials and technologies. In a ubiquitous example, consider the Fig 1 12/12 World Semiconductor Growth Curve Fig 2 12/12 PCB Growth Curve, Asia 30 April 2009 • circuitree.com http://www.circuitree.com

Table of Contents Feed for the Digital Edition of CircuiTree - April 2009

CircuiTree - April 2009 Contents Lead Wire The Wire Tech Talk Flexible Thinking New GUI Improves Time to Market for Serial RapidIO System Designs Environmentally Speaking Intelligent Design i-Line UV Lithography and Sub-10μm Feature Size Package Substrate Technologies Guest Column BPA Growth Curves Market Outlook Technical Product Spotlights Classified Ads Upcoming Events Ad Index

CircuiTree - April 2009

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