December 3, 2012. IPC—Association Connecting Electronics Industries has announced the October findings from its monthly North American Printed Circuit Board (PCB) Statistical Program. Rigid PCB shipments were down 1.1% in October 2012 from October 2011, and bookings decreased 9.2% year over year. Year to date, rigid PCB shipments grew 4.4% and bookings decreased 0.2%. Compared to the previous month, rigid PCB shipments were down 12.4% and rigid bookings fell 14.3%. The book-to-bill ratio for the North American rigid PCB industry in October 2012 slipped below parity to 0.98.
Flexible circuit shipments in October 2012 were up 15.6%, and bookings were down 18.9% compared to October 2011. Year to date, flexible circuit shipments decreased 4.0% and bookings decreased 10.5%. Compared to the previous month, flexible circuit shipments decreased 10.3% and flex bookings were down 0.5%. The North American flexible circuit book-to-bill ratio remained low at 0.74.
For rigid PCBs and flexible circuits combined, industry shipments in October 2012 were up 0.1% and bookings decreased 10.0%, compared to October 2011. Year to date, combined industry shipments were down 4.4% and bookings were down 1.1%. Compared to the previous month, combined industry shipments for October 2012 decreased 12.2% and bookings decreased 13.4%. The combined (rigid and flex) industry book-to-bill ratio in October 2012 remained slightly below parity at 0.96.
“Although the book-to-bill ratios continued below parity in October, sales rebounded in the flexible circuit segment,” according to Sharon Starr, IPC director of market research. “The industry’s recovery is expected to resume in the near term, but possibly not until early 2013. Action by the U.S. Congress to deal with the ‘fiscal cliff’ will have a significant impact on economic growth and business confidence.”
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 90% 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 percentage of their reported shipments that were produced domestically (that is, in the U.S. or Canada). In October 2012, 82% of total PCB shipments reported by survey participants were domestically produced. Domestic production accounted for 82% of rigid PCB and 84% 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 44% 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.