I consider electronics manufacturing in Taiwan to be the barometer for the global consumer electronics industry. Market trends can be predicted by analyzing shipping data from Taiwanese circuit board manufacturers. Every year annual volume increases, despite certain monthly slow cycles. Historically, sales during February decrease due to the Chinese New Year vacation, and it rebounds quickly during March. Volume continues to increase for the remainder of the year, with sales peaking during October/ November as customers load in for the Christmas rush. December and January are always the sluggish times.
During the three quarters of 2018, there was a sharp drop in shipments to customers. February posted a remarkable decrease compared to the same month last year (negative growth). Volume returned to normal levels during March and took off for the rest of the year, posting double digit growth every month as the Christmas flurry is just around the corner. Major circuit manufacturers are optimistic to achieve a 15% growth in 2018, while manufacturers from other countries and regions are expecting a 10% growth.
Flexible circuits are posting larger growth rates than rigid circuit boards because the majority of increases in sales from the electronics industry are coming from mobile devices (smart phones, tablet PCs and smart watches). During the 1990s, the flex circuits segment was less than one tenth of rigid board production. Last year flex circuits production moved up to 4th in terms of sales, and this year it is trending to reach 3rd. Today, the largest circuit manufacturer in the world is ZD Technology in Taiwan, and the majority of their production is flexible circuits.
Several market analysts are concerned with two non-financial factors surrounding the electronics industry in Taiwan.
The first one is the relatively high prices for the new iPhones released in September. Analysts expect sales to be less this year compared to Apple’s original business plan, which will have a dribble down effect in the Taiwanese supply chain for Apple’s products.
The second concern is the trade war between the United States and China. The majority of productions for Taiwanese manufacturers are conducted in Mainland China. A trade war will hurt everyone.
I am optimistic for the Taiwanese electronics manufacturers. The iPhone is bit pricey, but the economy keeps chugging along and consumers have more disposable income. As far as talks between the U.S. and China, I believe both countries will find a middle ground and avoid and all out trade war.
Dominique K. Numakura, email@example.com
DKN Research, www.dknresearch.com
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Headlines of the week
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- PALTEK (Venture company in Japan) 9/20
Will commercialize a new low cost robot suit “Muscle Suits” to support disabled people cooperating with Tokyo Rika University.
- Mitsubishi Electric (Major electric & electronics company in Japan) 9/27
Has developed a new lighting technology what simulate blue sky inside of the buildings.
- Toshiba Memory (Major semiconductor manufacturer in Japan) 9/27
Has completed the construction of 6th building to expand the manufacturing capacity of 3D flush memory devices.
- Olympus (Major optical equipment manufacturer in Japan) 9/28
Has rolled out a new end video scope “IPLEX GX/GT” for industrial use. It will be valuable for manufacturing and maintenance of aircrafts and automobiles.
- Renesas (Major semiconductor manufacturer in Japan) 9/28
Has decided to close the manufacturing plant in Kochi Prefecture because of low productivity. The property will be sold to Marusan Sangyo.
- AIST (Major R&D organization in Japan) 9/28
Has developed a new cathode material of the potassium ion battery (4V). It is effective to reduce the cost of secondary batteries.
- Rohm (Major device manufacturer in Japan) 10/3
Has rolled out the new small size LED series “CSL0901/0902” with optical lens for the speed indicators of the automobiles. Size: 1.6 x 2.8 x 1.9 mm
- Riken (Major R&D organization in Japan) 10/3
Has developed a new organic base elastic photovoltaic cell with a conversion rate of 10.5% for wearable and medical devices.
- Toyota (Major automobile manufacturer in Japan) 10/3
Has agreed to develop hydrogen smart fuel cell battery system including fuel cell train with JR East.
- Hitachi Metal (Major metallic material supplier in Japan) 10/4
Has developed a new soft ferrite core material for the magnetic components of the mobile devices and automobile devices.
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