IPC Releases IMS/PCB Book-to-Bill Ratio and
IMS/PCB Business Report for September 2005
BANNOCKBURN, Ill., October 25, 2005—IPC—Association Connecting Electronics Industries® announced today the findings from its monthly Printed Circuit Board (PCB) Statistical Program.
PCB Book-to-Bill Ratio
The North American rigid PCB industry book-to-bill ratio for September 2005 rose to 1.07, while the North American flexible circuit book-to-bill ratio continued high at 1.52. These ratios are based on monthly data collected from PCB producers that participate in IPC’s monthly PCB Statistical Program. The combined (rigid and flex) industry book-to-bill ratio in September 2005 continued its climb to 1.18. This combined ratio has become less relevant to analysts, however, due to the divergence between the rigid PCB and flexible circuit segments of the industry in growth rates and book-to-bill patterns.
The 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 the companies in IPC's survey sample. A ratio of more than 1.00 suggests that current demand is ahead of supply, which indicates probable near-term growth.
Rigid PCB Growth
Rigid PCB shipments are down 0.5 percent and bookings are up 20.2 percent in September 2005 from September 2004. Year to date, rigid PCB shipments are down 4.7 percent and bookings are down 1.2 percent. Rigid PCB shipments from the survey sample increased 11.1 percent from the previous month and rigid bookings increased 14.9 percent from the previous month.
Flexible Circuit Growth
Flexible circuit shipments are up 28.0 percent and bookings are up 81.4 percent in September 2005 from September 2004. Year to date, flexible circuits shipments are up 27.4 percent and bookings are up 28.7 percent. Compared to the previous month, flexible circuit shipments from the survey sample increased 4.3 percent and flex bookings increased 84.5 percent.
Total Industry Growth
For rigid PCBs and flexible circuits combined, industry sales billed (shipments) in
September 2005 increased 5.3 percent from September 2004, and orders booked increased 36.7 percent from September 2004. Year to date, combined industry shipments are up 1.2 percent and bookings are up 5.9 percent. Combined industry shipments for September 2005 are up 9.4 percent over the previous month, and bookings are up 32.8 percent over the previous month.
“PCB sales were up in September, following the typical seasonal pattern,” said IPC President Denny McGuirk. “Compared to last year, rigid PCB sales are staying flat and flexible circuits are continuing their strong growth trend. September bookings numbers are way up in both segments of the industry, which is an encouraging sign for fourth-quarter business.”
The book-to-bill ratios and growth rates for rigid PCBs and flexible circuits combined are heavily affected by the rigid PCB segment, which represents more than 75 percent of the current PCB market in North America. The influence of flexible circuits is growing, however, as flexible circuit shipments have shown stronger growth than rigid PCBs over the past two years.
for all the charts in PDF
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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. IPC asks survey participants for the percent of their reported shipments that were produced domestically (i.e., in the United States or Canada). In September 2005, 71 percent of total PCB shipments reported were domestically produced. Domestic production accounted for 84 percent of rigid PCB and 33 percent of flexible circuit shipments in September.
Bare Circuits Versus Assembly
Flexible circuit sales typically include value-added services, such as assembly, in addition to the bare flex circuits. In September, the flexible circuit manufacturers in IPC’s survey sample indicated that bare circuits accounted for about 17 percent of their shipment value reported for the month. Assembly and other services make up a large and growing segment of flexible circuit producers’ business.
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. 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 three consecutive months or more 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 Interconnect Manufacturing Services (IMS) Business Report each month. Statistics for the previous month are not available until the last week of the following month.
For more information, contact IPC Director of Market Research Sharon Starr at SharonStarr@ipc.org or 847-597-2817 or SharonStarr@ipc.org.
IPC is a global trade association based in Bannockburn, Ill., dedicated to the competitive excellence and financial success of its more than 2,200 member companies, which represent all facets of the electronic interconnection industry, including design, printed circuit board manufacturing and electronics assembly. As a member-driven organization and leading source for industry standards, training, market research and public policy advocacy, IPC supports programs to meet the needs of a $40 billion U.S. industry employing more than 350,000 people. IPC maintains additional offices in Taos, N.M.; Arlington, Va.; Garden Grove, Calif.; Stockholm, Sweden; and Shanghai, China. For more information, visit www.ipc.org.