IPC releases December 2008 PCB industry results.
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Press Release Summary:
December findings from North American PCB Statistical Program show a general decrease in rigid PCB shipments, with a book-to-bill ratio falling to 0.89. For flexible circuits, with a ratio of 1.08, shipments were generally down, while bookings rose 23.8% over Dec 2007 and nearly doubled over Nov 2008. Combined, both rigid and flex, the book-to-bill ratio dropped to 0.90. Orders have trailed shipments for 9 straight months, however the industry ended 2008 1% ahead of 2007.
Original Press Release:
IPC Releases PCB Industry Results for December 2008
BANNOCKBURN, Ill., USA, February 2, 2009 - IPC - Association Connecting Electronics Industries® announced today the December findings from its monthly North American Printed Circuit Board (PCB) Statistical Program.
PCB Industry Growth Rates and Book-to-Bill Ratios Announced
Rigid PCB shipments are down 14.2 percent and bookings are down 24.5 percent in December 2008 from December 2007. Year to date, rigid PCB shipments are up 0.9 percent and bookings are down 5.5 percent. Compared to the previous month, rigid PCB shipments decreased 0.9 percent and rigid bookings decreased 4.6 percent. The book-to-bill ratio for the North American rigid PCB industry in December 2008 fell to 0.89.
Flexible circuit shipments in December 2008 are down 17.1 percent, but bookings are up 23.8 percent compared to December 2007. Year to date, flexible circuit shipments are up 3.4 percent and bookings are down 3.1 percent. Compared to the previous month, flexible circuit shipments are up 23.7 percent and flex bookings nearly doubled, up 99.9 percent. The North American flexible circuit book-to-bill ratio in December 2008 jumped to 1.08.
For rigid PCBs and flexible circuits combined, industry shipments in December 2008 decreased 14.5 percent from December 2007 and orders booked decreased 21.1 percent from December 2007. Year to date, combined industry shipments are up 1.1 percent and bookings are down 5.3 percent. Compared to the previous month, combined industry shipments for December 2008 are up 0.6 percent and bookings are up 1.3 percent. The combined (rigid and flex) industry book-to-bill ratio in December 2008 dipped to 0.90.
"Rigid PCB orders have trailed shipments for nine straight months now, and that is reflected in a declining book-to-bill rate," said IPC President Denny McGuirk. "Strong orders have been keeping the flexible circuit segment growing, but the whole industry's December sales were weaker than in prior years. However, the industry ended the year about 1 percent ahead of 2007," he concluded.
The book-to-bill ratios are calculated by dividing the value of orders booked over the past three months by the value of sales billed during the same period from companies in IPC's survey sample. A ratio of more than 1.00 suggests that current demand is ahead of supply, which is a positive indicator for sales growth over the next two to three months.
Book-to-bill ratios and growth rates for rigid PCBs and flexible circuits combined are heavily affected by the rigid PCB segment. Rigid PCBs represent an estimated 90 percent of the current PCB industry in North America, according to IPC's World PCB Production and Laminate Market Report.
The Role of Domestic Production
IPC's monthly survey of the North American PCB industry tracks bookings and shipments from U.S. and Canadian facilities, which provide indicators of regional demand. These numbers do not measure U.S. and Canadian PCB production. To track regional production trends, however, IPC asks survey participants for the percent of their reported shipments that were produced domestically (i.e., in the USA or Canada).
In December 2008, 86 percent of total PCB shipments reported were domestically produced. Domestic production accounted for 85 percent of rigid PCB and 89 percent of flexible circuit shipments in December by IPC survey participants. These numbers are significantly affected by the mix of companies in IPC's survey sample, which may change slightly in January, but are kept constant through the calendar year.
Bare Circuits Versus Assembly
Flexible circuit sales typically include value-added services such as assembly, in addition to the bare flex circuits. In December, the flexible circuit manufacturers in IPC's survey sample indicated that bare circuits accounted for approximately 68 percent of their shipment value reported for the month. Assembly and other services make up a large and growing segment of flexible circuit producers' businesses. This figure is also sensitive to changes in the survey sample, which may occur at the beginning of each calendar year.
Interpreting the Data
Year-on-year and year-to-date growth rates provide the most meaningful view of industry growth. Month-to-month comparisons should be made with caution as they may reflect cyclical effects. Because bookings tend to be more volatile than shipments, changes in the book-to-bill ratios from month to month may not be significant unless a trend of three consecutive months or more is apparent. It is also important to consider changes in bookings and shipments to understand what is driving changes in the book-to-bill ratio.
The information in IPC's monthly PCB industry statistics is based on data provided by a representative sample of both rigid and flexible PCB manufacturers in the USA and Canada. IPC publishes the PCB Book-to-Bill Ratio and the PCB Statistical Program Report each month. Statistics for the previous month are not available until the last week of the following month.
About IPC
IPC (www.IPC.org) is a global trade association based in Bannockburn, Ill., dedicated to the competitive excellence and financial success of its 2,700 member companies which represent all facets of the electronics industry, including design, printed board manufacturing, electronics assembly and test. As a member-driven organization and leading source for industry standards, training, market research and public policy advocacy, IPC supports programs to meet the needs of an estimated $1.7 trillion global electronics industry. IPC maintains additional offices in Taos, N.M.; Arlington, Va.; Garden Grove, Calif.; Stockholm, Sweden; and Shanghai and Shenzhen, China.
