Circuits Assembly - March 2008 - (Page 49)

Trade Groups Table 1. Tax-Exempt Organization Revenues, 2004-06 Revenues ($ millions) Org. AEA ACI ECA EIA iNEMI IPC IMAPS Jedec SEMI SIA SMTA 2004 16.8 10.8 2.2 8.6 NA 12.2 1.9 2.6 44.2 7.2 1.4 2005 17.9 12.5 1.7 4.0 1.7 15.3 1.7 2.5 45.2 7.3 1.4 2006 19.4 11.9 1.6 * 2.0 15.2 1.8 2.6 N/A 8.1 1.7 % Change, 04-06 16 11 -25 -15 25 -8 -1 -12 18 Figures rounded. N/A = not available. *EIA disbanded in 2006. Table 2. Association Size by Membership, 2006 Org. IMAPS SMTA IPC AEA SEMI Jedec ECA iNEMI SIA EIA No. 9,000+1 3,8002 2,644 2,400 2,011 295 92 70 69 NA3 Dues Revenues ($ millions) % of Income 0.31 0.79 2.1 8.6 2.044 1.8 0.37 1.84 5.0 NA3 17 47 14 44 4.44 70 23 92 62 -- 1. Individual memberships. 2. 500 corporate members, remainder individual. 3. EIA disbanded during 2006. 4. 2005 figures. NA = not applicable. Sources: IRS filings, association Web sites, direct interviews. For trade groups, unrelated business income – revenue from activities “not substantially related” to their business purpose – is problematic, with critics contending tax-exempt organizations use tax breaks to unfairly compete with forprofit entities. The debate rages in Washington, where the U.S. House Ways and Means Committee has held more than 10 hearings on the issue since 1987. Conventions and trade shows are among the exemptions from unrelated business income taxes. None of the electronics trade groups in this review specified significant amounts of unrelated business income during the past three years. Other sources of income vary and are generally insignificant. A few groups – SIA, SEMI and IPC among them – generate notable fees from sales of standards, worker and management training programs, and market research activities. $45 million in sales in 2005 (the latest year for which its figures are available). SMTA, which until 2007 did not have its own trade show, relied on dues for 47% of its overall income, while Jedec members were good for 70%. At the extreme, iNEMI’s members footed 92% of the bill (Table 2). Trade shows and conferences are clearly a boon to association coffers. Per its 2006 IRS filings, IPC netted $1.35 million on $4.6 million in industry program revenue. SEMI, which produces the prodigious SemiCon West show that occupies much of downtown San Francisco each July, earned some $28.7 million in 2005. Even stripped-down technical conferences are reliable profit centers: Jedec earned $185,000 on $396,000 taken in from such meetings in 2006; ECA declared $995,752 in revenues against $626,419 in expenses from conferences in 2005. SEMI and AeA reported $2.5 million and $2.7 million in revenues from conferences in 2005 and 2006, respectively. For SMTA and IMAPS, nearly half their respective 2006 revenue came from conferences. Membership By and large, trade organizations follow a similar model of encouraging membership (Table 2) through low dues. Often, as in the case of AeA, SEMI, IPC, iNEMI and others, dues are based on a progressive scale relative to the member company’s annual revenues. Some associations’ memberships are facility-based; others are company-wide. The range can be dramatic, however. For AeA, for instance, the cost of a regular corporate membership can cost as little as $1,000 and as much as $104,000 per year. A typical approach would echo that of SEMI’s, where corporate membership dues are low and raised infrequently. “We try not to exclude new companies and many smaller companies who might view the dues as being cost prohibitive, as we have a ‘startup’ category and have dues that are graduated based on company revenues,” explains SEMI CFO Alfred Drumm. Individual memberships largely drive SMTA and IEEE. The remainder of the tax- See us at IPC Apex Show, Booth #711 49 circuitsassembly.com Circuits Assembly MARCH 2008 http://www.seikausa.com http://www.seikausa.com http://circuitsassembly.com

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Circuits Assembly - March 2008 Caveat Lector Letters Industry News Market Watch Talking Heads Focus on Business On the Forefront Screen Printing What Drives the Crowd? Mastering ESD Control in Automated Handling Systems Beating the RoHS Heat Trade Secrets True to Its Roots The Road Abroad - Strategic Alliance or Greenfield Facility? Tech Tips Wave Soldering Test and Inspection Process Doctor Pb-Free Lessons Learned Getting Lean Materials World Equipment Advances Apex Product Preview Ad Index Assembly Insider Technical Abstracts

Circuits Assembly - March 2008

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