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Speaking of this Year — 2003
December 31, 1969 |Estimated reading time: 3 minutes
By Christine F. Della Monaca
Speaking of this Week reflects on events in the electronics assembly industry every Friday. It appears in a special Wednesday edition this week to discuss the events of 2003.
When trying to sum up a whole year, it's best to start with the indicators, such as IPC — Association Connecting Electronics Industries' book-to-bill ratio. While we only have numbers through November right now, the graph of the year shows a good trend.
The book-to-bill began the year at 1.02, rising from 0.96 in December. It stayed above 1.00 for the year, except when it dipped to 0.97 in April, and climbed to a year-high of 1.18 in October. This is beginning to approach 2000's astronomical numbers — indeed, the highest book-to-bill number that year was 1.23 in May, but it dropped to 0.92 by December. Meanwhile in November 2003, the ratio dipped slightly to 1.13, but the news for all of 2003 is better than 2002's year of book-to-bills mostly underwater, averaging 0.96 for the year. And according to IPC, a ratio of more than 1.00 suggests that current demand is ahead of supply, indicating near-term growth.
Speaking of growth, the end of 2003 saw more of it than the beginning. Take trade shows, for example. We attended APEX, as always, in March in Anaheim, Calif. According to IPC, attendance was at 7,200 total visitors (attendees and exhibitors) to 393 booths over the three days. This is down substantially from more than 11,000 total visitors to 559 booths in 2002. At the same time, Assembly Technology Expo, held in late September in Chicago, attracted 11,397 visitors over its three-day period. This is down slightly from 12,048 in 2002. But while ATExpo represents only a slice of electronics assembly in the Electronics Assembly Pavilion, with 200 of the show's 600 exhibitors in 2003, the co-located SMTA International conference saw more than 40 sessions and special events this year, up from 30 in 2002.
Financial results also looked good, with companies updating guidance and often actually delivering the goods with upgraded quarterly results. While we won't see a complete picture until January or February 2004, DEK, for example, hinted in August that sales figures from its Asia-Pacific, European and American businesses showed month-on-month growth in unit sales for the first half of 2003.
China continues to tease, fascinate and even vex some companies in the industry. But many of them are still going there for the first time or expanding their existing presence. Companies from such diverse areas as Richardson Electronics, KEMET, Polyonics, AIM, Agilent Technologies, DEK, GSI Lumonics and Cognex, to name a few, all made inroads there this year. In addition, trade shows like electronicaChina and ProductronicaChina, to debut in 2004, promise to show us the lay of the land, supplementing what we learned at IPC's International Printed Circuit and Electronics Assembly Fair in Guangzhou earlier this month.
Moving on to mergers and acquisitions, companies continued to come together as they've always done, and will do. JUKI Automation Systems Europe partnered with Tecnomatix Technologies Ltd., and JUKI in the U.S. signed a Comprehensive Business Alliance Agreement with Universal Instruments Corp. And while blockbuster deals were few for the second year in a row, the biggest news of the year was a divestiture. Cookson Electronics plc sold its equipment division, Speedline Technologies Inc., to KPS Special Situations Fund II for US $10 million. Ray Sharpe, CEO of Cookson Electronics, came to our office here in Nashua, N.H. before the deal went down to discuss the company's focus on materials, as well as the company's Shared Intelligence initiative. He was positive about the divestiture (although he couldn't give us specifics at the time), as well as the company's materials business. We also talked to Pierre de Villeméjane, president of Speedline, who felt that while the equipment business faces challenges, the company was poised for growth in 2004. Let's hope that's the case for the whole industry.
Traditionally, I don't make predictions in this year-end column, and I'm sticking to that. This industry is just too cyclical and unpredictable. But I will say I think 2004 could be the year.
Happy new year.
Have some insight on the industry? See something you don't agree with? Think I'm right on? Send it all to me at mailto:christinef@pennwell.com.