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PCB | May 06, 2009

ZVEI: World Market for PCB leaves growth behind

<em>Update</em>: In 2008, the world market for PCBs decreased by 4.8% to 48.9 billion U.S. Dollar, compared to the previous year. This also means that the five years of continuous growth were not continued, reports the German Association of the PCB industry (VdL) and the ZVEI Association Electronic Components and Systems. For 2009, a further decline of the global market - with 13% - is expected.
Asia accounts for almost 3/4 of the entire world market - with 36.25 billion U.S. Dollar. The biggest share goes to Southeast Asia (including China) with 27.25 billion U.S. dollars and Japan with 9 billion U.S. Dollar. However, the market in Southeast Asia (including China) shrank in 2008 by 1.55 billion U.S. Dollar (-5.4%). The decline in Japan was 0.5 billion U.S. Dollar (-5.3%). In 2007, both China and Japan reported growth - 11.4% and Japan 3.8% respectively.

In 2008, the European market is more stable than other markets - even bigger than the American market. The European market volume decreased by 0.05 billion U.S. Dollar (0.8%) to 6.15 billion U.S - compared to an American market volume decline of 0.35 billion U.S. Dollar (5.6% ) to 5.9 billion U.S. Dollar. The European share of the world market increased in comparison to 2007 - from 12.1% to 12.6%.

High financial pressure rested on PCB manufacturers in 2008 (as was the case in previous years); caused by customer demands on price reductions as well as by continuously high costs for energy, chemicals, tools and basic materials. In 4Q/2008, the situation intensified by the very onset of the economic crisis and a rapidly shrinking market; marked by severe dynamics and speed. Both were not predictable as such.

Declining production in Europe - slower decrease in staff numbers
The production volume in 2008 amounted to €2267 million; 10.8% less than in 2007. The number of European manufacturers declined to 307, from 333 in 2007. The number of employees in Europe stood at 22,426 - down from 23,873 in 2007 (down 6.1%). The associations expects the consolidation of the European PCB industry to continue; it will even worsen in 2009 due to the continuing economic crisis.

The production in the German speaking countries Germany, Austria, Switzerland declined by 8% to €1348 million compared to 2007 - less severe as the European average. The number of employees in 2008 decrerased by 3.2% (442). The industry stood at 12,556 employees at the end of 2008.

Electronics industry remains the main customer
Main customer segments in Europe in 2008 were: Industrial Electronics with 33.4% market share, Automotive Electronics with 21.3%; followed by Telecommunications with 14.8%. The segments Consumer Electronics and Information Technology stood at 3.4% and 3.6% respectively. Military Technology was 6.4% and Medical stood at 5.4%. Others accounted for approximately 11.7% of sales.

The niche segments of Military and Medical have growth rates of 17.1% and 9.8% respectively. In Military, the modernisation of systems and in Medical, the development of population structure help that new products emerge. Both sectors have in common that it is usually smaller series with demanding performance quality that are not awarded away to Asia. The sector Industry Electronics was able to hold its position; here, mainly new products - that have to be protected from product piracy - that are not awarded to Asia.

Germany retains top position in Europe
The German production volume stood at €970 million in 2008; after €1,039 million in 2007. The decline was less severe than the European average. The market share of German manufacturer in 2008 in Europe grew to 43% (2007: 41%). There were 77 German PCB manufacturers in Germany in 2008 with 8,956 employees; compared to 80 companies with 9,220 employees in 2007.

Main customer segment for PCBs produced in Germany was Automotive Electronics with 32.1%, followed by Industry Electronics with 31.3% and Telecommunications with 10.1%. Information Technology stood for 5.1% and Consumer Electronics for 2.1% of sales. Military accounts for 2.1% and Medical for 4.1% of sales. Others stood at 13.3%. This means that Military and Medical were growth markets in Germany too.

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