IPC Releases IMS/PCB Book-to-Bill Ratio and
IMS/PCB Business Report for December 2005

BANNOCKBURN, Ill., January 26, 2006—IPC—Association Connecting Electronics Industries® announced today the findings from its monthly Printed Circuit Board (PCB) Statistical Program.

PCB Book-to-Bill Ratio
The North American rigid PCB industry book-to-bill ratio for December 2005 remained strong at 1.09, but the North American flexible circuit book-to-bill ratio declined to 0.95.  These ratios are based on monthly data collected from PCB producers that participate in IPC’s monthly PCB Statistical Program.  The combined (rigid and flex) industry book-to-bill ratio in December 2005 remained positive at 1.06.  This combined ratio has become less relevant to analysts, however, due to the divergence between the rigid PCB and flexible circuit segments of the industry in growth rates and book-to-bill patterns.

The 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 the companies in IPC’s survey sample.  A ratio of more than 1.00 suggests that current demand is ahead of supply, which indicates probable near-term growth.

Rigid PCB Growth
Rigid PCB shipments are up 9.5 percent and bookings are up 14.2 percent in December 2005 from December 2004.  Year to date, rigid PCB shipments are down 2.9 percent and bookings are up 3.9 percent.  Rigid PCB shipments from the survey sample increased 8.7 percent from the previous month and rigid bookings increased 12.5 percent from the previous month.

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Flexible Circuit Growth
Flexible circuit shipments are up 30.2 percent and bookings are up 40.3 percent in December 2005 from December 2004.  Year to date, flexible circuits shipments are up 30.3 percent and bookings are up 19.1 percent.  Compared to the previous month, flexible circuit shipments from the survey sample increased 2.8 percent and flex bookings increased 2.9 percent.

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Total Industry Growth
For rigid PCBs and flexible circuits combined, industry sales billed (shipments) in December 2005 increased 13.8 percent from December 2004, and orders booked increased 20.4 percent from December 2004.  Year to date, combined industry shipments are up 3.4 percent and bookings are up 7.7 percent.  Combined industry shipments for December 2005 are up 7.2 percent over the previous month, and bookings are up 9.7 percent over the previous month.

“Sharp drops in the book-to-bill ratio for flexible circuits are no cause for alarm unless the ratio continues at low levels for several months.  This is because bookings in this segment are so volatile,” said IPC President Denny McGuirk.  “Flexible circuit sales actually ended the year 30 percent ahead of 2004.  Rigid PCB sales ended the year 3 percent below the 2004 level.  Overall, 2005 sales for the PCB industry as a whole were 3.4% ahead of 2004.” McGuirk concluded.

The book-to-bill ratios and growth rates for rigid PCBs and flexible circuits combined are heavily affected by the rigid PCB segment, which represents more than 75 percent of the current PCB market in North America.  The influence of flexible circuits is growing, however, as flexible circuit shipments have shown stronger growth than rigid PCBs over the past two years.

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or to view historical index data )

The Role of Domestic Production
IPC’s monthly survey of the North American PCB industry tracks bookings and shipments from US and Canadian facilities, which provide indicators of regional demand. These numbers do not measure US and Canadian PCB production. IPC asks survey participants for the percent of their reported shipments that were produced domestically (i.e., in the USA or Canada). In December 2005, 73 percent of total PCB shipments reported were domestically produced. Domestic production accounted for 84 percent of rigid PCB and 38 percent of flexible circuit shipments in December.

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 about 40 percent of their shipment value reported for the month. Assembly and other services make up a large and growing segment of flexible circuit producers’ business.

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.

For more information, contact IPC Director of Market Research Sharon Starr at SharonStarr@ipc.org or 847-597-2817.

About IPC
IPC is a global trade association based in Bannockburn, Ill., dedicated to the competitive excellence and financial success of its more than 2,200 member companies, which represent all facets of the electronic interconnection industry, including design, printed circuit board manufacturing and electronics assembly.  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 a $40 billion U.S. industry employing more than 350,000 people.  IPC maintains additional offices in Taos, N.M.; Washington, D.C.; Garden Grove, Calif.; Stockholm, Sweden; and Shanghai, China.  For more information, visit www.ipc.org.