Circuits Assembly Online Magazine - Features

TOKYO - UMC Electronics, a large EMS provider based in Japan, will open a second plant in China to meet growing demand.

The company will install a reported 100 SMT lines in the plant, according to a report in a Japanese language publication translated by Dominique Numakura's EPTE newsletter.

UMC expects sales of 52 billion yen this year, the report said.

SAN JOSE -- North American-based manufacturers of semiconductor equipment posted a 90-day moving average of $1 billion in orders in April and a book-to-bill ratio of 0.80, signaling a likely slowdown ahead, according to SEMI.

A book-to-bill of 0.80 means that $80 worth of orders were received for every $100 of product billed for the month.

The three-month average of worldwide bookings in April was $1 billion, up 1.5% above revised March figures of $988.4 million but down 37% year-on-year.

The three-month average of worldwide billings in April was $1.25 billion, down 1.6% from revised March levels and 10% from a year ago.

"A minor decrease in billings and a commensurate increase in bookings slightly raises the book-to-bill ratio," said Stanley T. Myers, president and CEO of SEMI. "However, we are in a stasis period, where we have yet to see a significant change in business for North American-based providers of new semiconductor manufacturing equipment."

BALTIMORE -- North American production of printed circuit boards will be flat this year, a leading analyst predicted.

Speaking Thursday at IPC's semiannual market research meetings, Dr. Hayao Nakahara said that production of circuit boards in North American rose 11% to about $5 billion last year, but that 2005's soft start makes it unlikely that growth will be achieved this year.

Dr. Nakahara, a PCD&M columnist who is widely recognized as the world's top authority on PCB production, said that North American-based PCB makers produced $890 million worth of high technology boards worldwide last year. Dr. Nakahara defined high technology as boards of 18 or more layers. The U.S. remains the top producer worldwide of such boards, with a 54% share, Dr. Nakahara said.

The figures do not include backplanes; the U.S. built $300 million worth of backplanes in 2004; about half the worldwide total, according to Dr. Nakahara.

However, North America's share of the overall PCB market is 14%, down from about 40% in 2000. Most of North America's loss has been China's gain: the nation has surged to 25% share, up more than 15 points during that period.

From 1995 to 2000 North American companies spent $4.8 billion on acquisitions of PCB capacity. Of that sum, just $1 billion worth remains open, Dr. Nakahara said.

PCB Production Forecast, 2005-07
2005 2006 2007

China 34.0 26.0 16.0

N. America 6.0 2.0 1.0

Japan 1.0 1.2 1.4

Europe 1.0 1.0 1.0

S. Korea 22.0 15.0 10.0

Taiwan 15.0 7.0 5.0

Thailand 5.5 4.0 4.0

Source: N.T. Information Ltd., May 2005

MINNEAPOLIS, MN - The co-located SMTA International and ATExpo show on Sept 25-29, in Rosemont, IL, will once again feature the Emerging Technologies Summit. The summit is a series of three paper sessions and a panel discussion (moderated bySteve Greathouse of Intel Corp.) addressing the latest trend in electronics manufacturing and assembly.

The first session, Roadmaps, will feature papers on iNEMI's Optoelectronics Roadmap for 2004, Emerging Nanotechnology and Its Effect on Electronics Manufacturing, and Free Silicon Marketing Strategy.

The next session, Turning Lead Into Gold, will feature papers on Gold Bump Technologies, Flip Chip Ultrasonic Gold-to-Gold Interconnect for High Bump Count Devices, Adhesive Flip Chip for Large Arrayed Devices, and Packaging of High-Power LEDs Using Au Studbump Interconnects.

The last session, Advanced Power Technology, will feature papers on mPowerChip: A Solution for Integrated Power for Microsystems and Integration of Active and Passive Components Using Chip in Polymer Technology.

For further details and for event registration, visit smta.org/smtai/

Vienna - AT&S, Europe's largest PCB manufacturer, began construction last week on a second plant in Shanghai. When it comes online in 15 months, the 75,000m² production facility will triple the company's capacity in China.

"The second plant in Shanghai will definitively put us in the position as the most modern high performance printed circuit board manufacturer in the high-tech segment," said Willi Dörflinger, chairman, in a statement. "The new capacity will come just at the right time in the second half of 2006, enabling us to tend to the climbing demand in the HDI microvia area."

Upon completion of the plant, located next to the existing plant, about 50% of AT&S' global capacity will come from its plants in India and China.

The company's step toward Asian expansion takes place exactly four years after the cornerstone was laid for the first plant.

TEMPE, AZ -- Three-Five Systems, a small-tier EMS company, today said it would review a possible sale or merger to as losses continue to mount.

reported first -quarter losses from continuing operations of $24.2 million, down from a loss of $3.8 million last year. The company posted net sales of $20.2 million for the quarter ended March 31, down from $23 million.

The total net loss, which includes discontinued operations, was $39.4 million, 
down from a loss of $6.6 million in the year-ago quarter.

The sales drop was due to significantly reduced EMS sales in the U.S., the company said, primarily from customers rescheduling orders to later in 2005.

Gross margin dollars were $2.6 million less than in the comparable quarter in 2004. Selling, general and administrative expenses rose, due to increased severance, consulting, accounting and legal expenses

During the quarter TFS took a $2.5 million loss on assets relating to ERP implementation, 
and $900,000 for costs associated with continuing lease obligations for vacated facilities. 

The company also took a $12.9 million charge for the impairment of goodwill for its EMS business 
and large panel display business in Marlborough.

Ina statement, the company said that the substantial losses sustained in the past 
several years has led to the retention of SG Cowen & Co. review strategic alternatives aimed 
at maximizing stockholder value. Based on SG Cowen's advice, the company has exited 
the display business and has signed a nonbinding letter of intent to sell its RF operations in Manila, 
leaving its EMS operations in Penang, Malaysia, and Redmond, WA. It said it is looking at several merger 
or recapitalization options. 

"Our alternatives include sale of all or part of our EMS business, merging with another company, 
recapitalization and continuation of our business, or seeking joint venture partners.

TFS guided for flat second-quarter revenue from ongoing operations. "For the remainder of 2005, our focus 
will be on cost reductions and restructuring our EMS business to achieve cash flow breakeven. We believe that 
the combination of our new product introduction and medical and military operations in Redmond with our 
high-volume, cost-effective offshore operations in Penang will provide a strong foundation for our EMS
business in the future."

At the end of the quarter TFS had cash and restricted cash of $12.4 million vs. $16.2 million 
at the end of the fourth quarter 2004.

Year-on-year, days sales outstanding rose to 46 from 38, inventory turns were flat at 5.1 and cash conversion 
cycle rose to 62 days from 58.