North American market - broad growth in 1999, a good start for 2000

Citation

Custer, W. (2000), "North American market - broad growth in 1999, a good start for 2000", Circuit World, Vol. 26 No. 3. https://doi.org/10.1108/cw.2000.21726cab.036

North American market - broad growth in 1999, a good start for 2000

North American market - broad growth in 1999, a good start for 2000 [1]

The North American electronics industry showed reasonable growth in all categories in 1999 vs. 1998. Annual (12/12) and three month (3/12) rates for calendar year 1999 were as in Table I.

In the last three months of 1999 versus 1998 rigid PCB orders were up 9.4 per cent as electronic equipment increased 18.6 per cent driven by a huge (42 per cent) increase in communications equipment. The year 2000 is starting out well although Federal Reserve Board Chairman Alan Greenspan's careful monitoring of inflation signs and ongoing interest rate hikes is sure to slow things down a bit as the year progresses.

Globally $1.08 trillion of electronic equipment was produced in 1999 (Chart 1) of which the USA manufactured $438 billion (Chart 2). US electronic equipment growth by end market can be obtained from the US Department of Commerce "Factory Orders" report issued monthly. Chart 3 shows the 12-month average growth of the four key end markets and Chart 4 lists the largest US electronic equipment companies based upon their equipment sales. Companies highlighted (IBM, Raytheon, Honeywell, Rockwell and Litton) still make bare printed circuit boards - either for captive usage or merchant sale. The balance procures all of their PCBs from external sources.

Table I Annual and three month rates for calendar year 1999

Chart 1World electronic equipment production 1999

Chart 2 US production of electronic equipment 1999 estimate ($B)

Chart 3 US electronic equipment bookings 12 month rolling average

Chart 4

1999 was a year of further consolidation for North American PCB manufacturers. Tyco bought Praegitzer and Advanced Quick Circuits, Viasystems announced a $500 million IPO and their intention to focus on assembly versus bare board fabrication, TTM (time to market), a Thayer company was formed from the merger of Pacific Circuits and Power Circuits, Sanmina bought Altron, Padex purchased Poly-Flex and Innovex bought AdFlex. The former ACI became Johnson Matthey, then AlliedSignal and finally Honeywell in a series of acquisitions and name changes and Dii's Multek PCB operations bought Micro Electronica in Brazil and subsequently Flextronics bought the entire Dii Group. Most recently Sheldahl announced that connector supplier Molex might acquire it.

Chart 5

Chart 6 Industry statistics

Figure 1UK PCB industry three month moving average book-to-bill

On a more personal level Rohm and Haas acquired Morton Intemational in June 1999 and subsequently combined Morton Electronic Matedais, Lea Ronal and Shipley into a huge global matedais supplier - Shipley Ronal. I took early retirement in September and formed Custer Consulting Group. Our Web site www. custerconsultin.q.com contains updated industry growth indicators, my recent presentations (IPC TMRC) and current Circuit World and CircuiTree articles. Also included are details on commercial products - CCG's daily e-mail news service and 240 slide "Business Outlook" presentation as well as information about the extensive market research data and forecasts available from Henderson Ventures (Henderson/Nakahara) and Electronic Outlook Corporation (Anavy/Henderson).

Closing 1999 the Top PCB manufacturers in decreasing order of dollar sales are listed in Chart 5. For the publicly traded companies sales and profits for the most recent quarter vs. the same quarter are found in Chart 6. Although 1999 was a year of growth N. American PCB industry profitability was not stellar. Many of the larger PCB fabrication companies (Sanmina, Flextrenics, HADCO, Litton and Dii (now Flextronics)) have already or are now trending to backplanes and/or PCB assembly to boost their sales and profits.

Walt Custer

Note1 This article was sponsored by Shipley Ronal.