Emerald Group Publishing Limited
Copyright © 2004, Emerald Group Publishing Limited
Lights in the sky
Lights in the sky
Keywords: Intellect, IPC, PCIF, Printed circuit boards, Industry
Our industry has now seen some signs for optimism. This is borne out by the recently issued improved book-to-bill ratios from Intellect's own statistical evidence and the upbeat presentation given by Walt Custer at Intellect's PCIF Conference in Cheltenham. At the conference, Mark Smyth of the Royal Bank of Scotland also gave a positive slant on the economy in both the UK and the USA with the caveat that the improvement globally is very USA-dependent. Significant growth patterns are expected to continue in China and that region is set for unusual heights, probably at the expense of many large-scale manufacturing sites across the world.
It seems inevitable that to grow and prosper the UK PCB and EMS industries will need to focus on modest runs and highly-specialised work with dedicated service whilst diverting any large-scale commitments to offshore facilities.
Institute of Printed Circuits (IPC) in the USA has recently faced some criticism for backing the "Buy America Act'' which was championed by the IPC's Government Relations Committee whilst at the same time being criticised for duplicity by opening an office in China. My view is that the IPC will be damned whatever route it takes. Both actions have their merit. The former for preserving a strategic necessity and the latter based on the premise that a presence in China will enable them to influence standards on a global basis.
The trend of Reverse Auctions in the USA and elsewhere is a worrying one. These auctions encourage the lowest price and put printed circuit boards into the commodity bracket where they do not belong. It also discourages Research and Development and relegates it down the ladder from OEMs to the supply chain. This is what has happened in Europe. An industry is only as good as the integrity and robustness of its R&D and its supply chain.
PCIF held its 20th Annual Conference in Cheltenham on 15 October. This was a cracker, entitled "Focusing on the Future". There were seven first class speakers straddling many topics to assist CEOs in making meaningful decisions in a difficult market place. The Fabricators held a special Forum on 7 October with the guest speaker being Ms Geraldine Alliston, the DTI's Director of the Electronics Unit who gave a comprehensive talk covering DTI's policy on business support matters. In this Geraldine emphasised that DTI do consider PCBs to be of strategic importance.
Plans are in hand for the 2004 PCIF programme with the various groups normal quarterly meetings continuing to be a regular feature. The Institute of Circuit Technology (ICT) calendar includes four seminars and its Annual Symposium in June. ICT also holds regular Council Meetings. The seminars are free of charge but a small charge is levied for the Annual Symposium. Some ideas retaining the spirit of previous times with a new approach are being developed for the next PCIF Conference.
It would not be surprising for any observer looking into the PCB industry in Europe to be somewhat confused by the numeracy and complexity of Associations and Federations that now exist. As we know Intellect embraces the PCIF with its PCB Fabricator, EMS and Supply Chain members along with FEI and CSSA. That is clean and simple. Then we have European Institute of Printed Circuits (EIPC) and EIPC UK. EIPC specialises in putting on conferences for the edification of the European PCB industry and has a well-deserved reputation for doing that. EIPC UK was formed this year from past members of Circuit Equipment and Materials Association (CEMA) and is an outpost now of the EIPC. The ICT is UK-based and represents individual engineers in the UK PCB industry; it specialises in running seminars and an annual symposium for PCB engineers. ICT is part of the Intellect CMS sector sitting alongside the PCIF members; similarly the Electronics Design Realisation Group (EDRG) representing individual design engineers is also part of the CMS sector. In Europe also there is EPIA and European Electronic Component Manufacturers' Association (EECA). European Packaging and Interconnection Industries Association (EIPA) is one of the four Industry Associations resulting from the new organisation of EECA set up in March 2001. Its mission statement is "Broadcasting the identity and the messages of the European Packaging and Interconnection Industry throughout Europe and worldwide". Then there is European IT and Communications Technology Association (EICTA), which represents a wide range of members across Europe. Association of Franchised Distributors of Electronic Components (AFDEC) is run very successfully by Gary Kibblewhite and provides an excellent service to that branch of our industry. The IPC (USA based) is setting up a UK chapter of its well-established Design Council and cooperating with our own EDRG to do so. There are many more but those, I believe, are the key ones for our part of the world in Europe. In a period when there is so much difficulty in the industry it behoves us all to collaborate where that is appropriate.
There was an interesting article in the Economist of 25 October entitled "Tilting at Dragons". It states that the rich world's scapegoat of choice for the demise of their manufacturing jobs is China. However, this may be too simplistic. It is true that the yuan is undervalued and, now Mr Hu has declared that his officials will set up a study with American government experts to gradually make the yuan convertible. Tying it to a wider basket of currencies may be the best option. The writer made the point that the heart of rich countries' complaints is an unwillingness to accept responsibilities for their own economic faults.
The cheering news about more optimism in our industry is very welcome and the surviving companies deserve some respite after the most demanding and steep downturn this sector has ever experienced. Walt Custer reported in the IPC's September Review magazine that electronic equipment orders in the USA have been continually improving since last November. Instruments and controls, medical equipment, military electronics and now computers are all contributing to this expansion with only the communications and internet sectors remaining flat. The book-to-bill ratios in the USA's PCB industry showed at 1.02 and 1.03 in June and July 2003, respectively.
We look forward to a more encouraging 2004.
Frank CoultardComponents and Manufacturing Services, Intellect