IPC Releases PCB Industry Results for October 2011

Flexible circuit shipments in October 2011 were down 11.3 percent and bookings declined 10.3 percent compared to October 2010. Year to date, flexible circuit shipments increased 0.3 percent and bookings increased 1.7 percent. Compared to the previous month, flexible circuit shipments decreased 25.8 percent and flex bookings were down 14.3 percent. The North American flexible circuit book-to-bill ratio in October 2011 declined to 0.95.

For rigid PCBs and flexible circuits combined, industry shipments in October 2011 decreased 9.6 percent from October 2010, as orders booked decreased 0.1 percent from October 2010. Year to date, combined industry shipments were down 1.1 percent and bookings were down 8.8 percent. Compared to the previous month, combined industry shipments for October 2011 decreased 11.9 percent and bookings decreased 1.4 percent. The combined (rigid and flex) industry book-to-bill ratio in October 2011 remained at 0.99.

“North American PCB sales are down from the previous month, but this is a normal seasonal pattern,” said Sharon Starr, IPC market research director. “The good news is that rigid PCB orders are holding steady,” she added.

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 two to three months.

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 89 percent of the current PCB industry in North America, according to IPC’s World PCB Production Report.

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, IPC asks survey participants for the percent of their reported shipments that were produced domestically (i.e., in the USA or Canada). In October 2011, 83 percent of total PCB shipments reported were domestically produced. Domestic production accounted for 83 percent of rigid PCB and 79 percent of flexible circuit shipments in October by IPC’s survey participants. These numbers are significantly affected by the mix of companies in IPC’s survey sample, which change slightly in January, but are kept constant through the remainder of the year.

Bare Circuits versus Assembly
Flexible circuit sales typically include value-added services such as assembly, in addition to the bare flexible circuits. In October, 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’ businesses. 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 and short-term volatility. 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 more than three consecutive months 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 PCB Statistical Program Report each month. Statistics for the previous month are not available until the last week of the following month.