IPC Releases PCB Industry Results for May 2007

BANNOCKBURN, Ill., July 3, 2007 — IPC — Association Connecting Electronics Industries® announced today the May findings from its monthly North American Printed Circuit Board (PCB) Statistical Program.

PCB Industry Growth Rates and Book-to-Bill Ratios Announced
Rigid PCB shipments are down 14.8 percent and bookings are down 12.2 percent in May 2007 from May 2006.  Year to date, rigid PCB shipments are down 10.9 percent and bookings are down 17.7 percent.  Compared to the previous month, rigid PCB shipments increased 6.7 percent and rigid bookings increased 2.1 percent.  The book-to-bill ratio for the North American rigid PCB industry in May 2007 dipped slightly below parity at 0.98.  This indicates that, during the next two to three months, sales of rigid PCBs are likely to continue at about the same level below the 2006 as the industry has been seeing so far this year.   

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Flexible circuit shipments in May 2007 were down 10.1 percent and bookings were up 2.9 percent compared to May 2006.  Year to date, flexible circuit shipments are up 0.7 percent and bookings are up 23.8 percent.  Compared to the previous month, flexible circuit shipments increased 15.7 percent and flex bookings were down 0.4 percent.  The North American flexible circuit book-to-bill ratio continued its climb to 1.32 in May, indicating probable sales growth in the near term.

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For rigid PCBs and flexible circuits combined, industry shipments in May 2007 decreased 14.5 percent from May 2006 and orders booked decreased 11.2 percent from May 2006.  Year to date, combined industry shipments are down 10.3 percent and bookings are down 15.6 percent.  Compared to the previous month, combined industry shipments for May 2007 are up 7.2 percent and bookings are up 1.9 percent.  The combined (rigid and flex) industry book-to-bill ratio in May 2007 remained just above parity at 1.01.

“In the rigid PCB segment, book-to-bill ratios are hovering at or slightly under parity, which suggests that this year’s business is likely to hold steady but remain below last year’s levels for at least a few more months,” said IPC president Denny McGuirk.  “In the flexible circuit industry, the book-to-bill ratio is still climbing due to recent increases in bookings and generally flat shipment growth. Overall PCB sales in the first five months of 2007 are now about 10 percent below the same period in 2006,” he added, “which reflects the current economic slowdown.”

(Click here for all the charts in PDF
or to view historical index data )

The book-to-bill 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 is a positive indicator for sales growth over the next two to three months.

(Click here for all the charts in PDF
or to view historical index data )

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 88 percent of the current PCB market in North America, according to IPC’s World PCB Production and Laminate Market Report for the Year 2006, which will be published in late July.

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 May 2007, 89 percent of total PCB shipments reported were domestically produced.  Domestic production accounted for 89 percent of rigid PCB and 96 percent of flexible circuit shipments in May 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 April, the flexible circuit manufacturers in IPC’s survey sample indicated that bare circuits accounted for about 80 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.