Circuits Assembly - October 2008 - (Page 14)

W TCH A Semis Leap Trends in the U.S. electronics equipment market (shipments only). % Change May Computers and electronics products Computers Storage devices Other peripheral equipment Nondefense communications equipment Defense communications equipment A/V equipment Semiconductors Components1 Nondefense search and navigation equipment Defense search and navigation equipment Medical, measurement and control rRevised. Market Edited by Chelsey Drysdale PC, Cellphone Prospects Strong YTD 1.8 -2.9 -1.0 3.1 0.3 25.7 -12.1 -4.3 -1.1 0.7 4.7 10.7 Juner -3.6 -3.3 2.1 -2.2 5.7 2.8 -5.8 -14.3 -0.7 3.7 -8.0 -5.4 July* 9.0 -0.2 2.8 -10.6 0.8 9.4 -0.3 46.2 -0.2 -5.2 -1.2 15.3 -2.7 7.7 -6.7 -2.3 4.9 1.9 -6.7 -21.3 -2.2 0.9 9.8 -2.4 LOS ALTOS, CA – PC and mobile phone manufacturers are upbeat about second-half prospects, says Henderson Ventures (hendersonventures.com), pointing to a 12% jump in semiconductor bookings during the second quarter. Henderson is forecasting an 8.9% increase for shipments this year, after a 3.2% gain in 2007. But the spreading global economic slump will undercut 2009 consumer spending for PCs and cellphones, the firm adds. Unit semiconductor growth will suffer, but the plunge in 2008 investment spending will keep chip prices from cratering. Consequently, 2009 revenues are predicted to increase 7.2%. An economic revival is forecast to spur a 14.5% jump in chip sales in 2010. *Preliminary. 1Includes semiconductors. Seasonally adjusted. Source: U.S. Department of Commerce Census Bureau, September 3, 2008 Report: EMS Labor Costs Rising SAN JOSE – The average cost of labor for EMS in most global geographies continues to rise at a rate equal to or slightly above the currency-adjusted local inflationary index, according to Charlie Barnhart & Associates (charliebarnhart.com). Exceptions are the US, Mexico and India, where the cost of labor for both assembly and box build was down marginally on improved absorption. The largest increases in the cost of EMS value-added services occurred in Western Europe and China, the firm says. Both these trends are expected to continue through 2008, as a result of the strengthening of the dollar against the euro and yuan, or its weakening against the peso and rupee, according to Barnhart. The majority of outsourcing continues to chase a diminishing available capacity principally located in the river deltas of China and the non-euro-based countries of Central and Eastern Europe. While the industry continues to add capacity, these regions are approaching operational limits because of shortages in qualified human and infrastructural resources, says the firm. The composite business risk indicator fell this reporting period (signifying decreasing risk) in North America, Eastern Europe, Thailand and Australia and rose (increasing risk) in Malaysia, India and China. Mexico, Thailand and Eastern Europe are the best value, lowest risk solutions for high-volume requirements, says Barnhart. Separately, Guangdong's local government has increased the minimum monthly wage by approximately 20% per year beginning in July, according to published reports. The government plans to double worker’s income in the five years. August Continues Manufacturing Decline TEMPE, AZ – Economic activity in the manufacturing sector failed to grow in August, said the Institute for Supply Management (ism.ws). While new orders rose 3.3 points sequentially, production dropped slightly to 52.1%. Inventories were up 4.3 points to 49.3%, and customer inventories were up 7.5 points to 54.5%. Backlogs inched to 43.5%. The August PMI dropped 10 basis points to 49.9%. (A reading above 50% indicates the manufacturing economy is generally expanding.) “The decline in manufacturing during August,” said ISM spokesman Norbert J. Ore, “continues the 2008 trend toward negligible growth or contraction each month, but ultimately results in very little overall change in the sector. This month’s report is showing the first signs of lower prices, as the prices index fell significantly, though still at an inflationary level. Export orders picked up additional momentum, and that is important to manufacturers, as domestic demand remains soft for most industries.” The overall economy grew for the 82d consecutive month, according to ISM. Apr. PMI New orders Production Inventories Customer inventories Backlogs 48.6 46.5 49.1 48.1 45.0 51.5 May 49.6 49.7 51.2 48.0 47.0 46.0 June 50.2 49.6 51.5 51.2 55.0 47.5 July 50.0 45.0 52.9 45.0 47.0 43.0 Aug. 49.9 48.3 52.1 49.3 54.5 43.5 Source: Institute for Supply Management, Sept. 2, 2008 Industry Market Snapshot Book-to-bills of various components/equipment. Mar. Semiconductor equipment1 Semiconductors2 Rigid PCBs3 (North America) Flexible PCBs3 (North America) Computers/electronic products4 0.87 1.82% 1.00 0.99 5.18 Apr. 0.82 3.82% 1.01 0.99 5.16 May 0.78 4.18% 0.95 1.01 5.07 June 0.81r 5.91%r 0.94 1.02 5.21r July 0.83p 7.10%p 0.94 1.01 4.98p Metals Index Price Per Lb. Date LME Cash Seller and Settlement for Tin LME Cash Seller and Settlement for Lead Handy and Harman Silver (COMEX Silver) LME Cash Seller and Settlement for Copper 9/10/07 $6.77 $1.37 $186.09 $3.34 6/2/08 $9.60 $0.89 $246.52 $3.62 7/7/08 $10.60 $0.71 $262.02 $3.88 8/4/08 $9.84 $0.98 $253.83 $3.67 9/2/08 $8.82 $0.88 $186.68 $3.34 Sources: 1SEMI, 2SIA (3-month moving average growth), 3IPC , 4Census Bureau, ppreliminary, rrevised 14 Circuits Assembly OCTOBER 2008 circuitsassembly.com http://www.hendersonventures.com http://www.hendersonventures.com http://www.charliebarnhart.com http://www.ism.ws http://www.circuitsassembly.com

Table of Contents Feed for the Digital Edition of Circuits Assembly - October 2008

Circuits Assembly - September 2008 Contents Letters Caveat Lector Industry News Market Watch Talking Heads Global Sourcing Screen Printing Better Manufacturing 'Checking Up' on Medical Electronics Solder Ball Attachment Using Laser Soldering Improving QFN Reliability Reflow Soldering Tech Tips Test and Inspection Process Doctor Pb-Free Lessons Learned Alternative Energies Eastern Advances Product Spotlight Ad Index Assembly Insider Technical Abstracts

Circuits Assembly - October 2008

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