#1828 / A Hiccup for the Taiwanese Electronics Industry ?

 The previous edition of DKN’s newsletter focused on the growth for the printed circuit board industry in Taiwan. I was optimistic that sales will continue to be robust as the electronics market gears up for the holidays, and shipments were on track to show double digit growth compared with the same month last year. I expected volume to grow by more than 15% for the whole year. However, the electronics market in Taiwan experienced a significant downturn during third quarter, so I have to step back from my optimistic outlook.
Shipments for the printed circuit board industry during the second quarter and the beginning of the third quarter came in at double digit growth, and revenue for August increased by more than 13% compared to the same month last year. Manufacturers throughout the mobile device supply chain predicted sales would increase even more during fourth quarter.
Unfortunately, September numbers cannot support this prediction; revenue growth of the printed circuit industry during September unexpectedly dropped to 4.3%. The rigid circuit board segment had a record month for shipments during August; however shipments during September declined by 3.3% compared with the previous month. This was the first month to post a decline since the Chinese New Year vacation. Flexible circuit manufacturers announced an increase in revenue; however, growth rates are slowing.
There are significant differences among printed circuit manufacturers relative to volume. Rigid board manufacturers Unimicron and Nanya PCB reported double digit growth during September, while Compeq, Chin-Poon and Flexium posted negative growth. The largest flex circuit manufacturer, ZD Technology, reported that growth was flat for September.
Apple is the largest business contributor for the electronics and circuit board industry in Taiwan. The manufacturers in the supply chain are anxious about sales for the new iPhone.
The retail price for the new iPhone X is much higher than market analysts expected. Manufacturers are leaning towards a pessimistic opinion for iPhone sales during Christmas due to the high retail price, and are considering decreasing their inventories.
It may be too early to predict buying behaviors of the consumer. Since the economy is firing on all cylinders and the unemployment rate is at record lows, I think sales will be robust for the electronics industry.

Dominique K. Numakura, dnumakura@dknresearch.com
DKN Research, www.dknresearch.com

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Headlines of the week
(Please contact haverhill@dknreseach.com for further information and news.)

  1. Canon (Major electronics company in Japan) 10/11
    Has rolled out a new photolithography equipment with a resolution of 2 micron line/space for 8th generation FPD lines. (2200 x 2500 mm)
  2. NEC (Major electronics company in Japan) 10/11
    Has developed a new noise canceling technology for hearable devices. The technology could be valuable to expand the applicable area to industrial.
  3. JUKI (Major circuit board machine manufacturer in Japan) 10/15
    Has started the partnership with Hitachi to optimize the productivities of the circuit board manufacturing lines introducing IoT.
  4. Murata (Major device manufacturer in Japan) 10/15
    Has developed a series of new coin type lithium batteries with large currency type and heat resistant type for automobile applications.
  5. TDK (Major device manufacturer in Japan) 10/16
    Has released a new all solid state secondary battery “CeraCharge”. It is available for the standard SMT mounting process of the printed circuit boards.
  6. Taiyo Yuden (Major device manufacturer in Japan) 10/16
    Has released a series of new large capacity MLCC type all solid lithium ion second batteries with a size of 32 x 24 mm.
  7. Sharp (Major electronics company in Japan) 10/16
    Has unveiled the first flexible color display of organic EL investing 57.6 billion yens. Size: 6.18”, resolution: 536 ppi
  8. Fujitsu General (Major electronics company in Japan) 10/18
    Has developed a wearable cooling system for business use combining Peltier device and water heat removers.
  9. Murata (Major device manufacturer in Japan) 10/19
    Has demonstrated a series of new flexible Piezo sensors built on thin plastic films. They are capable to detect various modes of mechanical motions.
  10. Taiyo Yuden (Major device manufacturer in Japan) 10/19
    Has developed a series of new packaging technology POL (Power Overlay) for the power devices such as GaN and SiC.
  11. E Ink (Display maker in Taiwan) 10/19
    Has unveiled several new color e-Paper display with 32,000 colors. Size: 13.3” and 32”. Volume production will start in 1Q of 2019.

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