Typical utilisation rates are 85% or above during a normal growth phase. (E.g. UMCs utilisation rate for Q3 2008 was reported to be 85%). This would indicate we are close to the bottom. However it is likely, this slight upturn in the main is due to the replenishment of inventory. BPAs model and analysis of industry surveys would indicate this downturn will be a U shaped with a prolonged time at the lower demand levels. Not least because a significant proportion of semiconductors is used in the consumer durable goods sector - enough said!

 

Responses to BPA's quarterly PCB survey (BPAs forecasting methodology includes surveying the PCB industry supply chain worldwide for short term trends) indicate that output from many Asian and European PCB fabricators has declined by more than 40% in Q1 09. North America has been in slow decline for more than a year and its first quarter revenues have not been hit quite as badly. High volume manufacturing has disappeared from North America and Europe, with the exception in the latter case for automotive PCBs which have still been made in mid-sized volumes in Germany. Indeed it is estimated that between 40% and 50% of the country's output is in this sector, compared to a worldwide sector figure of approximately 4% of total PCB shipments.

 

Surplus inventory appears to be all but used up, with laminators in particular reporting a slight increase in demand. However this is coming from a level that is only half of what it was a year ago. The quarterly results indicate that there has been no significant overall increase in the order books for Q2 (where some companies have won, others have lost) and so Q2 is expected to remain dampened to the same level as Q1. From such a low base, even with recovery in Q3 and Q4, it will be impossible for the industry to stage a full recovery in 2009 and only low growth is expected for 2010.

 

To further compound the decline, a now even more competitive marketplace has put intense pressure on the prices which have been forced down by 5-10% at a time when most fabricators were hoping to push prices up a bit to compensate for the higher raw materials costs experienced in 2008 as fuel prices surged. This has resulted in BPA reducing its value forecast made in November 2008 for 2009 from just under -10% to around -16% for this year. A small % growth is predicted in 2010 as the trend line emerges past the 0 line by the end of the first half of 2010. By 2012 BPA's Worldwide forecast for PCB demand will be back to 2007's level of just over US $49 billion.