Materials Costs Continue to Improve but Labor Costs Remain a Pain Point for Electronics Manufacturers
IPC Releases November Global Sentiment of the Electronics Supply Chain Report

Electronics industry sentiment improved during November with demand sentiment also taking a solid step up over the last 30 days per IPC’s November 2023 Global Sentiment of the Electronics Supply Chain Report.

And though materials costs continue to improve, labor costs remain a pain point. Three-fifths (62 percent) of electronics manufacturers say they are currently experiencing rising labor costs.

“In this month’s survey, we asked a special question about PCB and EMS production growth,” noted Shawn DuBravac IPC chief economist. “Electronics manufacturers believe the U.S. should adopt strong goals for production growth.” For the PCB sector, roughly 85 percent of respondents reported the five-year goal should be above current levels and the average suggested goal was 9.3 percent of global production. For the EMS sector, roughly 70 percent of respondents indicated a five-year goal above current levels. On average, respondents indicated the EMS industry should target 12.9 percent of global production by 2028 and 17.4 percent of production by 2033.  

Additional survey data show:

  • The New Order Index rose five points to 105 after hitting the lowest level for this index.
  • The Materials Cost Index fell to another new low, dropping four points to 118. The Labor Costs Index rose one point to 130 after declining for two consecutive months.
  • Shipments, orders, capacity utilization, backlogs and profit margins are expected to rise over the next six months, while all other key business indicators are expected to remain relatively stable.

For the report, IPC surveyed hundreds of companies from around the world, including a wide range of company sizes representing the full electronics manufacturing value chain.

View full report.

U.S. Partnership for Assured Electronics Awards Nearly $10 Million to 7 Microelectronics Firms

Seven microelectronics firms received nearly $10 million in combined funding to commercialize technologies of interest to the U.S. military services as winners of the Defense Business Accelerator (DBX) Microelectronics Challenge. This groundbreaking initiative is funded by the Department of Defense (DoD) and led by the U.S. Partnership for Assured Electronics (USPAE).

The challenge aims to revolutionize how the DoD drives the development of dual-use technology, which can be used for both civilian and military applications. The challenge is testing the hypothesis that the DoD can accelerate growth of a robust domestic industrial base by focusing its resources on commercialization of early-stage, hardware-intensive technologies and then scaling them into resilient businesses in partnership with private capital.

The DBX Microelectronics Challenge offered an unprecedented opportunity for advanced technology innovators to vie for funding of up to $2 million each to further commercialize their emerging technologies. The winning companies also will receive commercialization support through an ongoing accelerator program, which includes one-on-one coaching, access to resources and more. The accelerator program’s goal is to not only mature the technology but also scale the domestic business to fill critical gaps in the microelectronics supply chain.

After rigorous evaluation of 279 submissions received via an open solicitation, 25 finalists pitched their groundbreaking ideas at the Defense TechConnect Innovation Summit on November 28. A distinguished panel of industry experts, investors and a DoD representative judged the presentations, selecting the following seven challenge winners for a combined $9.6 million in funding:

  • Freedom Photonics LLC ($1,500,000)
  • Gigantor Technologies ($2,000,000)
  • Momentum Optics ($1,675,000)
  • Mosaic Microsystems ($1,000,000)
  • PseudolithIC, Inc. ($1,000,000)
  • SiliconCore Technology, Inc. ($1,675,000)
  • Soctera, Inc. ($750,000)

“Typically, the timeline from selection to contract award and receipt of funding is several months. DBX leverages the flexibility of Other Transactions Authority (OTA), along with some innovative structuring of the OTA agreement, to enable awardees to receive funding within 48 hours of their selection at the pitch event,” said Christopher Zember, senior fellow for Industrial Base Resilience who is supporting DoD as the architect and lead for this project.

The collaboration between USPAE, a non-profit organization with members spanning the electronics ecosystem, and the DoD’s Manufacturing Capability Expansion & Investment Prioritization Directorate (MCEIP) has been instrumental in driving this initiative forward. Tactical support from Advanced Technology International (ATI), and specifically its TechConnect division, has further fortified the success of the DBX Microelectronics Challenge. To help awardees advance their efforts, Fluent is providing each with key metrics from commercialization assessments and tools for business development.

“We’re honored to move the area of microelectronics forward with this funding and the ongoing accelerator program that we’ll make available to the winners over the next eighteen months,” said Nathan Edwards, executive director of USPAE. “The outcome will be faster access to dual-use technologies for which the military services already have a validated interest.”

WHMA Announces Call for Nominations for Recognition Awards

The Wiring Harness Manufacturer’s Association (WHMA) is accepting nominations for three recognition awards — Hall of Builders, Hall of Fame and Volunteer Excellence. The Hall of Fame and Volunteer Excellence awards will be presented at WHMA’s Annual Global Leadership Summit in February, and the Hall of Builders award will be presented at the Electrical Wire Processing Technology Expo (EWPTE) in May. Nominations require a candidate’s first and last name, company name, award category and reason for nomination.

The WHMA Hall of Builders award honors individuals from WHMA-member companies who have made significant contributions toward advancing the cable and wire harness industry. Hall of Builders inductees are industry veterans, leaders and mentors who are retiring from active service/employment, but whose legacies live on in wire and cable industry today.

The WHMA Hall of Fame is bestowed upon an individual in recognition of extraordinary contributions with broad significance to the cable and wire harness industry and distinguished service to WHMA. The nominee must support the advancement of the industry, consistent with the goals and mission of WHMA. This is the highest level of recognition WHMA can give to a member and is based on exceptional merit over the long term.

The WHMA Volunteer Excellence Award honors individuals from WHMA-member companies who have demonstrated ongoing leadership in WHMA activities and have contributed significant time and talent to the association and the cable and wire harness industry.

Submit your nominations online by December 21, 2023, at https://whma.org/recognition. For more information/questions on nomination requirements, email contact.us@whma.org

WHMA’s Annual Global Leadership Summit Offers Technical Education Workshop on Strategic Practices for Success
Participants will learn how to benefit from lucrative federal programs

Tyler Noesser, senior technical director at alliantgroup, a tax and business consultancy, will present a technical education workshop, “Strategic Practices for Success: Outpacing Competitors, Optimizing Bids and Nurturing Top Talent,” on February 13, 2024, from 3:00-5:00 pm, at WHMA's Annual Global Leadership Summit in Myrtle Beach, S.C.

Noesser will lead an interactive discussion on trends in the industry and provide practical advice on practices that manufacturers can implement immediately. He will detail recent legislative updates to powerful credits and incentives that have helped WHMA members claim millions in federal funds. Noesser will explain how these changes apply to wire harness manufacturers and how they can benefit from these lucrative federal programs.

“In today's competitive market, businesses must be strategic in their approach to remaining competitive, lowering bids, and retaining skilled workers,” said David Bergman, WHMA executive director. “We look forward to learning how the alliantgroup, can help company owners in the cable and wire harness industry take full advantage of federal and state tax credits, incentives, and deductions in order to successfully compete both in the U.S. and abroad.”

For more information on the leadership summit including schedule, exhibition, speaker profiles, sponsorship opportunities, or to register for event, visit https://annualconference.whma.org.

Statement of Support from IPC for New Actions to Strengthen America’s Supply Chains, Lower Costs for Families, and Secure Key Sectors

Statement attributed to Chris Mitchell, IPC Vice President of Global Government Relations

IPC welcomes the actions outlined today by the U.S. Government “to strengthen supply chains critical to America’s economic and national security.”

The COVID-era disruptions experienced by the U.S. electronics manufacturing industry spotlight the extent to which the United States has outsourced its industrial base impacting everything from automobiles to aircraft to consumer products. The investments being made under the CHIPS and Science Act, Defense Production Act, and Inflation Reduction Act must cover more than just a few key products such as semiconductors – they also need to include the full electronics manufacturing system that enables semiconductor chips to function including printed circuit boards (PCBs) and integrated circuits (IC) substrates.

We are pleased to see today’s actions complementing last week’s announcement of a National Advancing Packaging Strategy. In addition, IPC welcomes the creation of a Cabinet-level Council on Supply Chain Resilience and a new quadrennial review process to ensure a comprehensive approach to this vital issue. We also applaud the actions to solidify the U.S. defense industrial base and the emphasis on international cooperation.

 

North American PCB Industry Sales Up 3.9 Percent in October
IPC releases PCB industry results for October 2023

IPC announced today the October 2023 findings from its North American Printed Circuit Board (PCB) Statistical Program. The book-to-bill ratio stands at 0.97.

Total North American PCB shipments in October 2023 were up 3.9 percent compared to the same month last year. Compared to the preceding month, October shipments were up 6.3 percent.

PCB bookings in October were up 14.9 percent compared to the same month last year. October bookings were down 8.7 percent compared to the preceding month.

“PCB shipments for October were slightly better than expectations,” said Shawn DuBravac, IPC’s chief economist. “Weaker orders for the month suppressed the book-to-bill. Orders over the last three months are 20 percent below last year's levels.”

October PCB book to bill chart 1
October 2023 PCB book to bill ratio 2

Detailed Data Available

Companies that participate in IPC’s North American PCB Statistical Program have access to detailed findings on rigid PCB and flexible circuit sales and orders, including separate rigid and flex book-to-bill ratios, growth trends by product types and company size tiers, demand for prototypes, sales growth to military and medical markets, and other timely data.

Interpreting the 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 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 three to twelve months. A ratio of less than 1.00 indicates the reverse.

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 reflect seasonal effects and short-term volatility. Because bookings tend to be more volatile than shipments, changes in the book-to-bill ratios from month to month might not be significant unless a trend of more than three consecutive months is apparent. It is also important to consider changes in both bookings and shipments to understand what is driving changes in the book-to-bill ratio.

IPC’s monthly PCB industry statistics are based on data provided by a representative sample of both rigid PCB and flexible circuit manufacturers selling in the USA and Canada. IPC publishes the PCB book-to-bill ratio by the end of each month.

North American EMS Industry Down 7.4 Percent in October
IPC releases EMS industry results for October 2023

IPC announced today the October 2023 findings from its North American Electronics Manufacturing Services (EMS) Statistical Program. The book-to-bill ratio stands at 1.23.

Total North American EMS shipments in October 2023 were down 7.4 percent compared to the same month last year. Compared to the preceding month, October shipments decreased 0.5 percent.

EMS bookings in October decreased 19.5 percent year-over-year and decreased 4.8 percent from the previous month.

“EMS bookings were weak for the second consecutive month. The year-to-date trend for bookings declined to its lowest level of the year,” said Shawn DuBravac, IPC chief economist.

October 2023

Detailed Data Available

Companies that participate in IPC’s North American EMS Statistical Program have access to detailed findings on EMS sales growth by type of production and company size tier, order growth and backlogs by company size tier, vertical market growth, the EMS book-to-bill ratio, 3-month and 12-month sales outlooks, and other timely data.

Interpreting the 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 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 three to twelve months. A ratio of less than 1.00 indicates the reverse.

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 reflect seasonal effects and short-term volatility. Because bookings tend to be more volatile than shipments, changes in the book-to-bill ratios from month to month might not be significant unless a trend of more than three consecutive months is apparent. It is also important to consider changes in both bookings and shipments to understand what is driving changes in the book-to-bill ratio.

IPC’s monthly EMS industry statistics are based on data provided by a representative sample of assembly equipment manufacturers selling in the USA and Canada. IPC publishes the EMS book-to-bill ratio by the end of each month.

IPC Applauds New U.S. Government Strategy for Advanced Packaging
$3 Billion in CHIPS Act Funding to Support Vital Electronics Technology

The U.S. Government’s announcement today of a national strategy for “advanced packaging” under the CHIPS for America Program is a big step toward ensuring the resiliency and security of the U.S. supply chain for advanced electronics.

The “Vision for the National Advanced Packaging Manufacturing Program” (NAPMP), released today by the U.S. Commerce Department, says approximately $3 billion will be used to drive U.S. leadership in advanced packaging, with an initial funding opportunity to be announced in early 2024.

IPC has been the leading advocate for a “silicon-to-systems” approach to implementation of the CHIPS Act. A silicon-to-systems approach recognizes the importance of silicon fabrication, while underscoring the need for broader electronics manufacturing capabilities—including PCB fabrication and electronics assembly—to ensure that the U.S. can manufacture cutting edge technologies.  

“Advanced packaging” today is driving semiconductor innovation by introducing greater electronic interconnection within semiconductor packages. Electronic interconnection is a capability that has been marginalized in the U.S. but is now key to U.S. semiconductor leadership. 

“Indeed, advanced packaging is poised to play a major role in the development of chips for artificial intelligence, cloud computing, and medical applications, among many other next-generation technologies,” the Commerce Department stated earlier this year. 

However, a 2021 IPC report found the U.S. has only just begun to invest in advanced packaging, while nations in Asia have sprinted ahead to develop the lion's share of capabilities and capacity. The U.S. only accounts for 3% of global semiconductor packaging and lacks even state-of-the-practice capabilities.  

IPC has documented that an “ecosystem” approach covering several related electronics technologies is essential to achieving the goals of the CHIPS Act. For example, IPC believes the U.S. Government also must build up domestic capacity to produce advanced integrated-circuit (IC) substrates and printed circuit boards (PCBs).

“Bolstering chip production without commensurate growth in advanced packaging, PCB fabrication, and electronic assembly is likely to lengthen the supply chain and exacerbate glaring vulnerabilities in U.S. electronics manufacturing,” says Chris Mitchell, IPC VP of Global Government Relations.

For more information: Advanced Packaging Semiconductors | IPC Industry Initiatives