Rising raw material costs. This just came out today from the CircuiTree
Newsletter:
Short Supply, Strong Demand Translate into
Rising PCB Materials Prices
CircuiTree Magazine Newsletter
As summer approaches, the PCB supply chain is already heating
up. Reports from all parts of the world point to the same
problem: raw material costs are rising along with seasonal
temperatures. The question is will rising prices cool down
demand? Or, perhaps worse, will they cause increased
inventories?
Thus far, materials price increases have been a global
phenomenon. For example, in Europe copper clad laminate prices
have risen 28% since November 2003, according to the German
trade association Verband der Leiterplattenindustrie (VdL). The
association cited a rise in glass cloth and copper prices as
reasons for rising laminate prices. VdL also believes escalating oil
prices are pushing up resin prices, along with dry film and
soldermask prices. In Asia, a number of Korean and Chinese
fabricators have reported rising CCL prices between 20 and 30
percent.
Despite rising prices, materials and component shortages are
evident in many regions of the world. This is especially true in
Asia, where flexible circuit board makers are facing a polyimide
shortage. According to a report from Taiwan-based DigiTimes,
polyimide "has fallen in short supply due to expanding flexible
PCB applications...." DigiTimes estimated that Taiwanese flex
circuit makers are watching polyimide supply lag "behind demand
by around 15%."
On the rigid side, a number of Korean and Chinese fabricators
have reported rising CCL prices, along with other key materials.
"[Raw materials] have increased about 30% from last year's third
quarter," said one representative of Korean fabricator LG
Electronics. "This year, copper has had the highest increase--by
170%. This is a hard situation to overcome for a PCB shop, but
we must.....". Red hot end markets--particularly those that need lower
layer
count multilayers--might account for much of the supply
shortage. During his presentation at the IPC TMRC meetings in
Baltimore, industry analyst Walt Custer examined some circuit
board end markets. He observed that the computer sector
accounts for "one-third of the multilayer demand in the world."
That, in turn, "swings material consumption globally." With
desktop and notebook computers ruling the roost in Chinese
multilayer production, September's pre-Christmas PCB orders
could see a real shortage of PCB materials. "If materials are in
short supply now," commented Custer, "watch out when we hit
the busy season."
If material and component shortages continue, Custer fears OEMs
might repeat the sins of the past by over-ordering. This fear
seems valid. According to a published report by Reed Business
Information, multilayer PCB leadtimes "stretched in the first
quarter." Reed said the "average leadtime was 6.8 weeks in
December, but leadtimes moved out to 13 weeks by April." The
information service called this "bad news for buyers," citing
lengthening leadtimes despite the fact that "electronic equipment
production declined in the first quarter compared to the fourth
quarter of 2003."
The anomaly of rising PCB orders and lower electronic equipment
production must be tracked. Custer discussed this disparity--and
the danger if it continues--during his TMRC talk. "The industry
might now be entering a period where PCB manufacturers and
suppliers should exercise some caution," he said. "We're seeing
extended lead times and selective component shortages. That
looks like an inventory build-up, so be careful
Happy Holden
"Jana Carraway" <[log in to unmask]>
05/27/2004 05:33 PM
Please respond to jana.carraway
To: "TechNet E-Mail Forum." <[log in to unmask]>, <[log in to unmask]>
cc:
Subject: RE: [TN] Board Price Increases
What is the reason for the price increase? What are the current drivers
for
this?
Jana Carraway
Micro Systems Engineering, Inc.
6024 S.W. Jean Road
Lake Oswego, OR 97035
503.697.5291, ext 1180
email: [log in to unmask]
-----Original Message-----
From: TechNet [mailto:[log in to unmask]]On Behalf Of Happy Holden
Sent: Thursday, May 27, 2004 12:20 PM
To: [log in to unmask]
Subject: Re: [TN] Board Price Increases
Yes, we have increased our prices twice in the last 4 months and many of
the other Taiwanese manufacturers and China pcb shops have done so or are
planning to increase them.
Happy Holden
NanYa PCB
David Suraski <[log in to unmask]>
Sent by: TechNet <[log in to unmask]>
05/27/2004 12:21 PM
Please respond to "TechNet E-Mail Forum."; Please respond to David Suraski
To: [log in to unmask]
cc:
Subject: [TN] Board Price Increases
Hi All,
I have heard that some PWB fabricators have been increasing their prices
by up to 35% to compensate for increases in laminate costs. Has anyone
else heard or seen this?
Thanks,
David
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