IPC releases PCB industry results for July 2008.
Press Release Summary:
August 29, 2008 - According to IPC's monthly North American PCB Statistical Program, rigid PCB shipments are up 5.3% and bookings are down 8.0% in July 2008 from July 2007. Flexible circuit shipments in July 2008 are up 31.8% and bookings are up 9.9% compared to July 2007. For rigid and flexible circuits combined, industry shipments in July 2008 increased 6.9% from July 2007 and orders booked decreased 6.9% from July 2007. Combined industry book-to-bill ratio in July 2008 was 0.94.
Original Press Release
IPC Releases PCB Industry Results For July 2008
Press release date: August 27, 2008
PCB Industry Growth Rates and Book-to-Bill Ratios Announced
Rigid PCB shipments are up 5.3 percent and bookings are down 8.0 percent in July 2008 from July 2007. Year to date, rigid PCB shipments are up 5.7 percent and bookings are up 4.4 percent. Compared to the previous month, rigid PCB shipments decreased 15.9 percent and rigid bookings decreased 18.1 percent. The book-to-bill ratio for the North American rigid PCB industry in July 2008 remained at 0.94.
Flexible circuit shipments in July 2008 are up 31.8 percent and bookings are up 9.9 percent compared to July 2007. Year to date, flexible circuit shipments are up 7.7 percent and bookings are down 6.5 percent. Compared to the previous month, flexible circuit shipments are down 1.5 percent and flex bookings declined 11.8 percent. The North American flexible circuit book-to-bill ratio in July 2008 registered 1.01.
For rigid PCBs and flexible circuits combined, industry shipments in July 2008 increased 6.9 percent from July 2007 and orders booked decreased 6.9 percent from July 2007. Year to date, combined industry shipments are up 5.8 percent and bookings are up 3.6 percent. Compared to the previous month, combined industry shipments for July 2008 are down 15.0 percent and bookings are down 17.6 percent. The combined (rigid and flex) industry book-to-bill ratio in July 2008 was 0.94.
"Shipment growth continued to outpace growth in orders for the fourth consecutive month," said IPC President Denny McGuirk. "This has pulled down the book-to-bill ratio. PCB shipments are up compared to the same month last year, however, and that is a positive indicator for recovery."
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 July 2008, 86 percent of total PCB shipments reported were domestically produced. Domestic production accounted for 86 percent of rigid PCB and 88 percent of flexible circuit shipments in July by IPC survey participants. These numbers are significantly affected by the mix of companies in IPC's survey sample, which change slightly in January, but remain constant through the remainder of the year.
Bare Circuits Versus Assembly
Flexible circuit sales typically include value-added services such as assembly, in addition to the bare flex circuits. In July, the flexible circuit manufacturers in IPC's survey sample indicated that bare circuits accounted for approximately 56 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 Interconnect Manufacturing Services (IMS) Business Report each month. Statistics for the previous month are not available until the last week of the following month.
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 $1.5 trillion global electronics industry. IPC maintains additional offices in Taos, N.M.; Arlington, Va.; Garden Grove, Calif.; Stockholm, Sweden; and Shanghai, China.