Original Press Release
IPC Releases PCB Industry Results for November 2008
Press release date: December 29, 2008
BANNOCKBURN, Ill., USA, December 29, 2008 - IPC - Association Connecting Electronics Industries® announced today the November 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 5.8 percent and bookings are down 17.3 percent in November 2008 from November 2007. Year to date, rigid PCB shipments are up 2.4 percent and bookings are down 3.8 percent. Compared to the previous month, rigid PCB shipments decreased 0.2 percent and rigid bookings decreased 5.8 percent. The book-to-bill ratio for the North American rigid PCB industry in November 2008 slipped slightly to 0.94.
Flexible circuit shipments in November 2008 are down 22.6 percent and bookings are down 36.8 percent compared to November 2007. Year to date, flexible circuit shipments are up 5.8 percent and bookings are down 5.5 percent. Compared to the previous month, flexible circuit shipments are down 25.2 percent and flex bookings decreased 45.4 percent. The North American flexible circuit book-to-bill ratio in November 2008 increased to 1.04.
For rigid PCBs and flexible circuits combined, industry shipments in November 2008 decreased 7.0 percent from November 2007 and orders booked decreased 18.8 percent from November 2007. Year to date, combined industry shipments are up 2.6 percent and bookings are down 3.9 percent. Compared to the previous month, combined industry shipments for November 2008 are down 2.3 percent and bookings are down 9.5 percent. The combined (rigid and flex) industry book-to-bill ratio in November 2008 dipped to 0.94.
"PCB orders and shipments continued to decline in November, with flexible circuits being especially hard hit," said IPC President Denny McGuirk. "The flex segment is always more volatile, however, and the current month's poor performance followed an unusually strong October," he added. "Overall, the industry's sales are slowing as the recession deepens. We expect total industry sales to end the year at about the same level as 2007."
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 November 2008, 86 percent of total PCB shipments reported were domestically produced. Domestic production accounted for 86 percent of rigid PCB and 91 percent of flexible circuit shipments in November 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 November, the flexible circuit manufacturers in IPC's survey sample indicated that bare circuits accounted for approximately 70 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.
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 and Shenzhen, China.