IPC Releases IMS/PCB Book-to-Bill Ratio and
IMS/PCB Business Report for July 2006

BANNOCKBURN, Ill., August 28, 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 July 2006 remained positive a 1.02.  The North American flexible circuit book-to-bill ratio held steady at 1.01.  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 July 2006 was 1.02.  Some analysts find the separate ratios for rigid and flex more meaningful than the combined ratio, however, 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.

Rigid PCB Growth
Rigid PCB shipments are up 8.6 percent and bookings are up 21.1 percent in July 2006 from July 2005.  Year to date, rigid PCB shipments are up 11.0 percent and bookings are up 14.8 percent.  Rigid PCB shipments from the survey sample decreased 20.8 percent from the previous month and rigid bookings decreased 20.5 percent from the previous month.

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Flexible Circuit Growth
Flexible circuit shipments in July 2006 were up 5.5 percent and bookings were down 36.6 percent compared to July 2005.  Year to date, flexible circuit shipments are up 1.5 percent and bookings are down 12.7 percent.  Compared to the previous month, flexible circuit shipments from the survey sample decreased 22.3 percent and flex bookings decreased 44.9 percent.

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Total Industry Growth
For rigid PCBs and flexible circuits combined, industry shipments in July 2006 increased 8.4 percent from July 2005, and orders booked increased 14.4 percent from July 2005.  Year to date, combined industry shipments are up 10.3 percent and bookings are up 12.5 percent.  Combined industry shipments for July 2006 are down 20.9 percent over the previous month, and bookings are down 22.7 percent over the previous month.
            “The book-to-bill ratio in both segments of the industry is holding steady at just above parity,” said IPC President Denny McGuirk.  “This suggests that sales will continue to grow modestly during the next few months.  July is typically a slower month in the cyclical PCB industry, but sales in both segments are up compared to July 2005,” McGuirk added.

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 represents 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 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 July 2006, 86 percent of total PCB shipments reported were domestically produced.  Domestic production accounted for 86 percent of rigid PCB and 97 percent of flexible circuit shipments in July 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 at the beginning of each year.

Bare Circuits Versus Assembly
Flexible circuit sales typically include value-added services, such as assembly, in addition to the bare flex circuits.  In July, the flexible circuit manufacturers in IPC’s survey sample indicated that bare circuits accounted for about 60 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.

For more information, contact IPC Director of Market Research Sharon Starr at SharonStarr@ipc.org ( 847-597-2817), or Piyamart Hom-Uem at PiyamartHolmgren@ipc.org (847-597-2868)

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 $3.4 trillion global electronics industry. IPC maintains additional offices in Taos, N.M.; Arlington, Va.; Garden Grove, Calif.; Stockholm, Sweden; and Shanghai, China.