IPC Releases IMS/PCB Book-to-Bill Ratio and
IMS/PCB Business Report for February 2007

BANNOCKBURN, Ill., March 30, 2007—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 February 2007 climbed to 0.96.  The North American flexible circuit book-to-bill ratio increased to 0.97.  The combined (rigid and flex) industry book-to-bill ratio in February 2007 reflected these gains and grew to 0.96.  These ratios are based on monthly data collected from PCB producers that participate in IPC’s monthly PCB Statistical Program.  Some analysts find the separate ratios for rigid and flex more meaningful than the combined ratio, because of the divergence in recent years 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.

Industry Growth
Rigid PCB shipments are down 9.9 percent and bookings are down 19.1 percent in February 2007 from February 2006.  Year to date, rigid PCB shipments are down 6.8 percent and bookings are down 19.2 percent.  Compared to the previous month, rigid PCB shipments increased 2.0 percent and rigid bookings increased 4.2 percent.

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Flexible circuit shipments in February 2007 were up 2.7 percent and bookings were up 29.5 percent compared to February 2006.  Year to date, flexible circuit shipments are up 8.2 percent and bookings are up 5.6 percent.  Compared to the previous month, flexible circuit shipments decreased 0.6 percent and flex bookings were down 2.0 percent.

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For rigid PCBs and flexible circuits combined, industry shipments in February 2007 decreased 9.2 percent from February 2006, and orders booked decreased 17.4 percent from February 2006.  Year to date, combined industry shipments are down 6.0 percent and bookings are down 18.1 percent.  Compared to the previous month, combined industry shipments for February 2007 are up 1.8 percent and bookings are up 3.9 percent.

“Following a four-month decline in the PCB industry’s book-to-bill ratio, it is finally turning upward,” said IPC President Denny McGuirk.  “The flexible circuit segment began its upward climb in December of 2006, and the rigid PCB segment showed its first up-tick in February 2007.”  He continued, “Book-to-bill ratios in both segments are still below parity, which indicates a slowdown in growth in early 2007.  But sales and orders in both segments are following their usual seasonal patterns.”

The 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 85 percent of the current PCB market in North America, according to IPC’s World PCB Production and Laminate Market Report for the Year 2005.

(Click here for all the charts in PDF
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 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 February 2007, 91 percent of total PCB shipments reported were domestically produced.  Domestic production accounted for 91 percent of rigid PCB and 96 percent of flexible circuit shipments in February by IPC’s survey participants.  These numbers are significantly affected by the mix of companies in IPC’s survey sample, which remains constant throughout each calendar year, but may change with the January survey results.

Bare Circuits Versus Assembly
Flexible circuit sales typically include value-added services such as assembly, in addition to the bare flex circuits.  In January, the flexible circuit manufacturers in IPC’s survey sample indicated that bare circuits accounted for about 84 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.  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.

Contact for the Media:
Sharon Starr, IPC Director of Market Research
P:  847-597-2817
E:  SharonStarr@ipc.org

About IPC
IPC (www.ipc.org) is a global trade association based in Bannockburn, Ill., dedicated to the competitive excellence and financial success of its 2,400 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 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.