#2020 / Is There Improvement from The Global Electronics Industry?

The end of July is fast approaching. The impact of Covid-19 on the global economy remains uncertain, and tensions between the U.S. and China heated up last week. Electronic companies can’t forecast business trends with this uncertainty within the market.
The Japanese PCB industry had a slow start in 2020, but showed strong gains in February and March. Rigid build-up circuit boards, the core products in the industry lead in growth with an increase over 57% during the first quarter comparing year over year. We hoped these results would remain strong during the pandemic. Unfortunately, business slowed down during April and declined significantly during May, and continues to decrease.
Why the choppy market? Industry analysts believe the upswing during the first quarter came from the replenishment of the supply chain in China. EMS companies ordered a lot of high density circuits used in smart phones. Once the Out Of Stocks were fixed in the supply chain, business slowed down for circuit manufacturers.
The PCB industry in Taiwan looks different compared with last year. The decline in January was serious compared to other years, but the business decline during the Chinese New Year was negligible. Monthly revenue posted a positive growth (3.8%) comparing year over year for the same period. The growth rates for rigid circuits are more stable than flexible circuits. This was expected because most demand for printed circuits comes from mobile devices, in particular smart phones. Global shipments of smart phones continues to decrease for the last four years and Taiwanese PCB manufacturers are slowly finding new customers remain profitable.
The market trends of the global semiconductor are not very understandable. Shipments significantly dropped since the end of 2018 and rebounded during the first half of 2019. Global markets have very different results indicated on the graph pasted below:

Monthly shipments of the semiconductors by region (billion $)

The country that is the largest semiconductor producer in the world is China. Their market has been volatile since 2018. Business dropped during the first quarter but rebounded quickly. This volatile market makes it difficult to forecast sales for the rest of the year. The markets in Europe and Japan are stable in low levels; North American market is somewhat stable; other Asian countries are declining slowly.
Forecasts for our industry are all over the place. Global demands for semiconductor devices are declining, and the COVID-19 pandemic can negatively impact the market. Still, several manufacturers are planning large investments to increase manufacturing capacities, and many customers are increasing purchases to hedge against any supply line disruption.
With all this uneasiness, predictions and forecasts are the equivalent of a coin toss. Let’s be optimistic and hope for a great outcome!

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. TIT (Technical college in Japan) 7/9
    Has succeeded to make large crystalline semiconductor on plastic films with high speed by simple dipping process. It could be available for RTR process.
  2. TPCA (PCB industry organization in Taiwan) 7/15
    June PCB shipment increased 2.2% from May, and 5.6% from the same month of the previous year. The total of the first half of 2020 increased 3.8%
  3. JPCA (PCB industry organization in Taiwan) 7/17
    May PCB shipment declined 10.1% from April, but increased 1.0% from the same month of the previous year. Rigid build-up boards had a sharp drop.
  4. TSMC (Major semiconductor manufacturer in Taiwan) 7/21
    Will increase the investment remarkably in 2020. The company expect big growth for 3nm/5nm process by 5G devices from 2021.
  5. TDK (Major device manufacturer in Japan) 7/21
    Has developed a new heat resistant capacitors using modified polypropylene film. Ii is available at 125 degree C.
  6. TIT (Technical college in Japan) 7/21
    Has discovered a phenomena super conductor thin layer structure of LiNbO2 becomes transparent conductor.
  7. Nexperia (Module supplier in Japan) 7/27
    Has unveiled a new DFN (Discrete Flat No Lead) package for automobile applications.
  8. Onkyo (Major audio manufacturer in Japan) 7/27
    Has co-developed a new Android TV “TCL QLED TV 8K X 915 with TCL Electronics Holding.
  9. Asics (Major sport shoes manufacturer in Japan) 7/27
    Has developed new smart shoes with acceleration sensor and blue tooth device to measure running conditions of the athletes.
  10. Yano Research (Market research company in Japan) 7/28
    Forecasts a stable growth of the power semiconductor market from 2021 through 2025. The decline in 2020 could be half of 2009.

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