Encouraging news for the PCB industry
March 8, 2001 |Estimated reading time: 1 minute
Walt Custer reports two pieces of encouraging news for the PCB industry Encouraging news for the PCB industry
Walt Custer reports two pieces of encouraging news for the PCB industry:
Taiwan personal computer and component suppliers are reporting a much better February than January. More importantly, the US factory order report (January data released March 6, 2001) shows that electronic equipment orders are not collapsing. While components continued to "nosedive," January communications equipment orders actually increased.
According to the attached chart, PCB orders now appear to have "overcorrected," suggesting a resumption of growth in the next two to three months.
I still believe that this downturn is inventory reduction-driven. OEMs and CEMs are cashing in excess/over/double-ordered inventory to improve short-term cash flow. While the impact is staggering to the supply chain, it should be short-lived. Once inventories are depleted (and assuming electronic equipment orders hold), then replenishment must begin again, soon.
If inventories are reduced to low levels, there could be a "snapback" in PCB orders in late spring. I am not absolutely sure yet, but the current data supports the "massive, relatively short-lived, inventory reduction-driven" model.
Watch the charts over the next few months! Maybe some groans will start to change to smiles. No promises yet-but at least some encouraging news.