North American PCB Industry Results
BANNOCKBURN, Ill., USA,August 26, 2009 — IPC — IPC — Association ConnectingElectronics Industries® announced today the July findings fromits monthly North American Printed Circuit Board (PCB) StatisticalProgram.
PCB Industry Growth Rates and Book-to-Bill RatiosAnnounced
Rigid PCB shipments declined 26.2 percent and bookings were down22.3 percent in July 2009 from July 2008. Year to date, rigid PCBshipments were down 28.9 percent and bookings fell by 28.7percent. Compared to the previous month, rigid PCB shipmentsfell 11.8 percent and rigid bookings decreased 22.9 percent. Thebook-to-bill ratio for the North American rigid PCB industry inJuly 2009 pulled back slightly to 1.09.
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Flexible circuit shipments in July 2009 went down 14.9 percentand bookings declined 32.9 percent compared to July 2008. Year todate, flexible circuit shipments were down 1.0 percent and bookingswere down 9.0 percent. Compared to the previous month, flexiblecircuit shipments went down 17.8 percent and flex bookingsdecreased 41.6 percent. The North American flexible circuitbook-to-bill ratio in July 2009 fell back to 0.94.
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For rigid PCBs and flexible circuits combined, industryshipments in July 2009 decreased 25.3 percent from July 2008 andorders booked decreased 23.1 percent from July 2008. Year to date,combined industry shipments were down 27.1 percent and bookingswere down 27.4 percent. Compared to the previous month, combinedindustry shipments for July 2009 decreased 12.3 percent andbookings went down 24.5 percent. The combined (rigid and flex)industry book-to-bill ratio in July 2009 retreated to 1.07.
“After the encouraging results in June, rigid PCB sales in Julyfell back to the negative growth rates of prior months and flexiblecircuit growth rates continued to decline,” said IPC PresidentDenny McGuirk. “The year-on-year growth rates in rigid PCBs and forPCBs overall continue to improve each month, although they arestill negative. For the industry as a whole, the book-to-bill ratioremains positive.”
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The book-to-bill ratios are calculated by dividing the value oforders booked over the past three months by the value of salesbilled during the same period from companies in IPC’s surveysample. A ratio of more than 1.00 suggests that current demand isahead of supply, which is a positive indicator for sales growthover the next two to six months.
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Book-to-bill ratios and growth rates for rigid PCBs and flexiblecircuits combined are heavily affected by the rigid PCB segment.Rigid PCBs represent an estimated 91 percent of the current PCBindustry in North America, according to IPC’s World PCBProduction and Laminate Market Report.
The Role of Domestic Production
IPC’s monthly survey of the North American PCB industry tracksbookings and shipments from U.S. and Canadian facilities, whichprovide indicators of regional demand. These numbers do not measureU.S. and Canadian PCB production. To track regional productiontrends, however, IPC asks survey participants for the percent oftheir reported shipments that were produced domestically (i.e., inthe USA or Canada). In July 2009, 88 percent of total PCB shipmentsreported were domestically produced. Domestic production accountedfor 88 percent of rigid PCB and 85 percent of flexible circuitshipments in July by IPC survey participants. These numbers aresignificantly affected by the mix of companies in IPC’s surveysample, which may change slightly in January, but are kept constantthrough the calendar year.
Bare Circuits Versus Assembly
Flexible circuit sales typically include value-added services suchas assembly, in addition to the bare flex circuits. In July, theflexible circuit manufacturers in IPC’s survey sample indicatedthat bare circuits accounted for approximately 76 percent of theirshipment value reported for the month. Assembly and other servicesmake up a large and growing segment of flexible circuit producers’businesses. This figure is also sensitive to changes in the surveysample, which may occur at the beginning of each calendar year.
Interpreting the Data
Year-on-year and year-to-date growth rates provide the mostmeaningful view of industry growth. Month-to-month comparisonsshould be made with caution as they may reflect cyclical effects.Because bookings tend to be more volatile than shipments, changesin the book-to-bill ratios from month to month may not besignificant unless a trend of three consecutive months or more isapparent. It is also important to consider changes in bookings andshipments to understand what is driving changes in the book-to-billratio.
The information in IPC’s monthly PCB industry statistics isbased on data provided by a representative sample of both rigid andflexible PCB manufacturers in the USA and Canada. IPC publishes thePCB Book-to-Bill Ratio and the PCB Statistical Program Report eachmonth. Statistics for the previous month are not available untilthe last week of the following month.