BPA Forecasts a U-Shaped Slow Recovery for Semiconductor and PCB Industries

BPA Consulting compared world PCB forecast with the semiconductor forecast, noting that though the PCB industry fell in Q1 2009 to -20 percent, the semiconductor sector fell even lower to -25 percent.

When comparing the present decline in growth, starting from a peak in 2004 and dipping to a low in 2009 for both market segments, the circumstances are not the same as in the decline in 2001, a report said. In 2001, inventory levels were at an all-time high in anticipation of orders for computer and networking infrastructure equipment that never came.

Neither the circumstances nor the results will be as drastic, BPA said. Growth rates did not reach the same heights, levels of inventory were not over-estimated, and the slowdown has taken longer before demands went negative.

Late in Q1, semiconductor manufacturers reported minor improvements on the demand side in order rates and capacity with utilization rising above the 50 percent levels, the first QoQ increase since Q2 2008. Typical utilization rates are more than 85 percent during a normal growth phase. This indicates, according to BPA, that the industry is close to the bottom of this recessionary cycle with a slight upturn indicating a U-shaped recovery with prolonged time at the lower demand levels.

Responses to BPA’s worldwide PCB survey show that output from many Asian and European PCB fabricators has declined more than 40 percent in Q1 09. North American PCB output has been declining slowly during the past year. Q1 revenues have not been hit as badly, the survey revealed.

High volume manufacturing has disappeared from North American and Europe, with the exception of automotive PCBs, which have still been produced in mid-size volumes in Germany. It is estimated that approximately 40 to 50 percent of Germany’s output of PCBs is in the automotive sector, compared to a worldwide sector of approximately 4 percent of total PCB shipments.

PCB surplus inventory appears to be used up, with laminators reporting a slight increase in demand, though this increase comes from a level that is only half of what it was at this time last year, the report said. There has been no significant increase in orders for Q2 over Q1 this year. Even with recovery happening in Q3 and Q4, BPA estimates that it would be impossible for the industry to stage a full recovery in 2009 and only low growth is expected for 2010.

BPA has reduced its value forecast for global PCB manufacturing made in November 2008 for 2009 from -10 to -16 percent. A small growth is predicted for 2010, but by 2012, BPA’s worldwide forecast for PCB demand will be back to 2007’s level of more than $49 billion.

EDN, a sister publication of EM Asia