I consider electronics manufacturing in Taiwan to be the barometer for the global consumer electronics industry. Market trends can be predicted by analyzing shipping data from Taiwanese circuit board manufacturers. Annual volume increases every year, despite slow monthly cycles. Historically, sales during February decrease due to the Chinese New Year vacation, and it rebounds quickly during March. Volume continues to increase for the remainder of the year, with sales peaking during October and November as customers prepare for the Christmas rush. December and January are always sluggish.
During the three quarters of 2018, there was a sharp drop in shipments to customers. February posted a remarkable decrease compared to the same month last year, indicating negative growth. Volume returned to normal levels during March and took off for the rest of the year, posting double-digit growth every month as the Christmas flurry is just around the corner. Major circuit manufacturers are optimistic to achieve a 15% growth in 2018, while manufacturers from other countries and regions are expecting a 10% growth.
Flexible circuits are posting larger growth rates than rigid circuit boards because the majority of increases in sales from the electronics industry are coming from mobile devices (smartphones, smartwatches, tablets, etc.). During the 1990s, the flex circuits segment was less than one-tenth of rigid board production. Last year, flex circuits production moved up to the fourth position concerning sales; this year, it is trending to reach third. Today, the largest circuit manufacturer in the world is Zhen Ding Technology (ZDT) Holding Limited in Taiwan, and the majority of their production is flexible circuits.
Several market analysts are concerned with two non-financial factors surrounding the electronics industry in Taiwan. The first is the relatively high prices for the new iPhones released in September. Analysts expect sales to be less this year compared to Apple’s original business plan, which will have a trickle-down effect in the Taiwanese supply chain for Apple’s products. The second concern is the trade war between the United States and China. The majority of productions for Taiwanese manufacturers are conducted in mainland China. A trade war will hurt everyone.
I am optimistic for the Taiwanese electronics manufacturers. The iPhone is bit pricey, but the economy keeps chugging along, and consumers have more disposable income. Regarding talks between the U.S. and China, I believe both countries will find a middle ground and avoid an all-out trade war.
1. PALTEK (Venture company in Japan) 9/20
Will commercialize a new low-cost robot “muscle suit” to support disabled people in cooperation with Tokyo Rika University.
2. Mitsubishi Electric (Electronics company in Japan) 9/27
Developed a new lighting technology to simulate blue skies inside of the buildings.
3. Toshiba Memory (Semiconductor manufacturer in Japan) 9/27
Completed the construction of a sixth building to expand the manufacturing capacity of 3D flash memory devices.
4. Olympus (Optical equipment manufacturer in Japan) 9/28
Released a new industrial videoscope—IPLEX GX/GT. It will be valuable for the manufacturing and maintenance of aircrafts and automobiles.
5. Renesas (Semiconductor manufacturer in Japan) 9/28
Closed the manufacturing plant in Kōchi Prefecture due to low productivity. The property will be sold to Marusan Sangyo.
6. AIST (R&D organization in Japan) 9/28
Developed a new cathode material of the potassium ion battery (4V). It reduces the cost of secondary batteries.
7. Rohm (Device manufacturer in Japan) 10/3
Released a small size LED series—CSL0901/0902—with an optical lens for automobile speed indicators (size: 1.6 x 2.8 x 1.9 mm).
8. Riken (R&D organization in Japan) 10/3
Developed an organic-based elastic photovoltaic cell with a conversion rate of 10.5% for wearable and medical devices.
9. Toyota (Automobile manufacturer in Japan) 10/3
Agreed to develop a smart hydrogen-powered fuel cell battery—including a fuel cell train—with JR East.
10. Hitachi Metal (Metallic material supplier in Japan) 10/4
Developed a new soft ferrite core material for the magnetic components of mobile and automobile devices.
Dominique K. Numakura is the managing director of DKN Research LLC. To read past columns or contact Numakura, click here. Contact email@example.com for further information and news.