Archive for August, 2013

PostHeaderIcon Why European PCB manufacturers should not supply distributors

The eternal topic of conversation amongst the manufacturers of printed circuit boards is the huge success of distributors of Chinese circuit boards on the European markets.
The majority of local manufacturers believe the reason to be the cheaper price. But that is not the whole truth. If we have a look at what sales arguments the majority of distributors have, we will see that all of them offer the complete service package (proto, small series, large series, and different technologies) in a single place, from a single supplier. Such a strategy makes the process of buying printed circuit boards very convenient for customers and excludes local manufacturers from direct contacts. At the same time, it can be seen that distributors are forced to use European manufacturers for fast proto deliveries. Otherwise they are not competitive in terms of the speed of delivery. It can be concluded that European factories should avoid cooperating with distributors, thereby creating the following positive consequences:

1. Distributors will lose part of their main sales argument, i.e. the policy of “getting everything you need in one place” is no longer possible.

2. European manufacturers will be able to establish direct contacts with the customers themselves, which would expand their customer portfolio and make them less vulnerable in terms of a sudden reduction in their customer database, i.e. while previously it was the distributors who was accumulating dozens of customers and acting as a single customer for the manufacturer, now the manufacturers will be able to win the majority of customers by themselves.

3. By reasonably using the difference between the sales price of a manufacturer and the sales price of distributors, it will be possible to reduce the price for customers. Why should customers pay extra money to distributors, if it is possible to order express deliveries directly from European manufacturers?

There can be just one conclusion: we should stop cooperating with distributors in terms of express deliveries, which will breathe new life into the process of the manufacturing of printed circuit boards!



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PostHeaderIcon FLIR Systems awarded a $137 Million contract

FLIR Systems has been awarded an indefinite delivery, indefinite quantity contract from the U.S. Naval Surface Warfare Center, Crane Division.
FLIR will support Naval Air Systems Command’s UH-1 program and the Vertical Takeoff Unmanned Aerial Vehicle program.

The contract is valued at USD 136.6 million and is for FLIR’s commercially developed, military qualified BRITE Star II gimbaled electro-optical/infrared imaging systems, BRITE Star I upgrades, and related spares and services.

Work under this award is expected to be performed out of FLIR’s facility in Wilsonville, OR, and is expected to be completed by August 2018.

“This contract award was the result of our team’s continued effort to bring highly advanced commercially developed solutions to government markets,” said Andy Teich, President and CEO of FLIR. “Our innovative technology, high reliability, timely delivery, low total cost of ownership, and global customer support drive our success in these markets. We are proud to have been selected to provide the U.S. Navy with these highly tactical solutions.”

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PostHeaderIcon Solar industry capital expenditures set to rebound

The sun is finally rising on the global solar business, with growing demand in developing regions helping to ignite the first increase in industrywide capital spending in three years in 2014, according to IHS.
Global capital spending by producers of photovoltaic (PV) modules, cells, ingots, wafers and polysilicon is expected to rise by 30 percent in 2014 to reach $3.0 billion. This will mark the first time that expenditures have increased since 2011, when they grew 8 percent.

The projected growth will bring to an end a two-year period when spending dropped—by a stunning 72 percent in 2012, and by an anticipated 36 percent this year in 2013. During this period, PV industry capital spending will plunge by a gut-wrenching total of $10.6 billion, falling to $2.3 billion in 2013, down from $12.9 billion in 2011.

Solar industry players engage in capital spending in order to purchase manufacturing equipment and facilities used to produce PV raw materials or products. Spending has fallen in recent years because of massive overcapacity and oversupply, which has sent prices down throughout the supply chain.

However, a sustained increase in capacity from emerging economies is set to spur the 2014 recovery.

“South America, Africa and the Middle East now are leading the world in solar capacity additions—and they also are leading the capital expenditure segment of the PV business out of its slump,” said Jon Campos, solar analyst at IHS. “The overcapacity in PV production mainly has been concentrated in the developed solar regions of the United States, European Union and China. But as demand expands in new areas, PV manufacturers are gaining interest in producing their wares in these regions, resulting in new factory openings and boosting local capital spending.”

Dawn arrives for solar spending in emerging economies

After going up 23 percent in 2013, solar capital spending in emerging economies is expected to rise in the low 40 percent range for every year through 2017. In contrast, following zero growth in 2013, the established markets are expected to shrink by 5 to 10 percent during every year through 2017. Among all the emerging economies, the largest percentage increase in capacity is occurring in South America, Africa and the Middle East.

Emerging markets account for 7.9 gigawatts (GW) of the world’s total announced capacity for PV materials and products from ingots through modules, with the potential to climb to nearly 11GW by 2017. Capital investments for the foreseeable future will largely remain in the areas of crystalline wafer production, cell and module equipment.

Ending capital punishment

The expected increase in capital spending comes as a welcome and long-anticipated change from the dismal conditions that have plagued the market in recent years. The solar shakeout has peaked and an inevitable return to reinvestment in equipment and technology is due in the near term.

“Our research is showing a return to market equilibrium with regard to supply and demand,” Campos said. “Overcapacity seems to be correcting itself, and from the last few financial announcements, a handful of solar companies have returned to profitability and widened margins. The last piece of the recovery puzzle is capital spending and investment in high-efficiency technology.”

Spending spree

Beyond the rise in demand from emerging countries, other factors are contributing to the recovery in capital spending.
PV suppliers are engaging in new technology upgrades in order to enable higher efficiency and lower dollar-per-watt production costs. Equipment is also critical in allowing PV manufacturers to differentiate their products. Such differentiation can improve profitability and margins.

Current and potential trade conflicts concerning Chinese PV products could drive production to other locations, such as South America, Southeast Asia, Africa and the United States. In particular, U.S. states like Mississippi and Michigan are attractive regions for PV production because they provide cheap electricity and affordable land to manufacturers.

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PostHeaderIcon In search of a successor – Microsoft CEO steps down

Steve Ballmer, CEO of Microsoft, has decided to retire whitin the next 12 months – after more than a decade as the company’s CEO – its time to step down.
Microsoft will initiate the process of chosing Mr. Ballmer’s successor. In the meantime, Ballmer will continue as CEO and lead Microsoft through the next steps of its transformation.“There is never a perfect time for this type of transition, but now is the right time,” Ballmer said. “We have embarked on a new strategy with a new organization and we have an amazing Senior Leadership Team. My original thoughts on timing would have had my retirement happen in the middle of our company’s transformation to a devices and services company. We need a CEO who will be here longer term for this new direction.”

The Board of Directors has appointed a special committee to direct the process, which includes founder and Chairman of the Board Bill Gates.

“As a member of the succession planning committee, I’ll work closely with the other members of the board to identify a great new CEO,” said Gates. “We’re fortunate to have Steve in his role until the new CEO assumes these duties.”

Whether Microsoft will look whitin or outside the company for Ballmer’s successor is unknow, some analyst talk about wanting to see Stephen Elop, CEO of Nokia, as the new leader of Microsoft – others think that we’ll see Kevin Turner, Microsoft’s current COO, stepping up.

PostHeaderIcon Large-Sized LCD panels suffer surplus inventory levels in 1H13

A glut of large-sized LCD panels used in the television and IT sectors arose at the end of the first half this year as production consistently outpaced shipments.
A total of 47.7 million square meters (msqm) of LCD panels for use in televisions and public information displays were produced globally during the first six months of the year, according to a new LCD Fab and Inventory Management tracker from IHS Inc. (NYSE: IHS), a leading global source of critical information and insight. In comparison, shipments amounted to only 46.8 msqm. This meant that production for TV panels exceeded shipments by 2.0 percent.

Meanwhile, 18.4 msqm of LCD panels were produced during the same period for monitors, notebook computers and tablets comprising the IT sector. Shipments also came out lower at 18.0 msqm—similar to what occurred in the TV sector—so that IT panel production exceeded shipments by 2.6 percent.

“The large-sized LCD panel market in the first half of 2013 suffered from slow demand, primarily driven by an underperformance of sales in China, the world’s biggest LCD TV market,” said Ricky Park, senior manager for large-area displays at IHS. “In all, TV set makers proved unable to generate growth during the first half despite a slew of holidays—including the Lunar New Year and Labor Day—plus last-minute promos put up just before the end of the Chinese government’s subsidy program in May to encourage new consumer purchases.”

The same lackluster demand was in evidence for panels in the IT sector, where consumers and businesses alike showed little enthusiasm for buying new monitors or laptop PCs. Instead, devices like smartphones and tablets were the preferred items of purchase, selected for their appeal and ease of use, Park noted.

Given the slow demand, panel makers reduced utilization rates for their fabs to 79 percent during the first half—5 percent lower than the average recorded during the second half of 2012. Still, the deliberate curtailment in fab utilization was not enough to prevent an increase in accrued panel inventory. Accumulated stockpiles for TV panels amounted to 8.7 msqm, up 12 percent from the second half last year. For IT panels, the figure was 2.9 million msqm, an increase of 19 percent.

The slow demand and high inventory of the first half resulted in a price drop for panels during that time frame. The open-cell price of 32-inch high-definition, 60-hertz TV panels fell by 7.5 percent, while that for IT panels was down approximately 4 percent.

“The current excessive inventory levels portend badly for the rest of the year,” said Alex Kang, senior analyst for large-area displays at IHS. “Production is projected to exceed shipments again in the third quarter, and the second half overall is forecast to be negatively affected by the inventory overhang from the first half of the year.”

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PostHeaderIcon Aspocomp’s Q2 – a lot like Q1

Aspocomp’s second quarter net sales remained on par with the previous quarter at EUR 4.8 million, which for the company is a rather disappointing result.
As a result of the sluggish market, the company has once again adjusted the full-year net sales forecast.
© Aspocomp

Aspocomp CEO, Sami Holopainen, gives his review of the quarter:

“Demand has remained slack in 2013. Every time the situation improved, a weaker period followed, and the market softened as summer approached. The telecommunications sector remained down. Our net sales remained on a par with the previous quarter at EUR 4.8 million and therefore the net sales of the first half of 2013 amounted to a disappointing EUR 9.8 million. The operating result was EUR -0.4 million, which was improved by a one-time item.

Cash flow from operations during the period was EUR 0.0 million. Aspocomp’s gearing ratio is negative and the financial ratio is still good, which has enabled us – and will enable us in the future – to step up our development of business with new customers and customer segments. In addition to the intensified sales efforts we have focused on stringent cost control and made arrangements to optimize our capacity utilization.

We still expect demand to pick up during the second half of 2013. However, due to the slow recovery, we have again adjusted our forecasts for full-year net sales and operating profit slightly downward.”

Outlook for the future

Net sales in 2013 are expected to amount to EUR 20-23 million and operating result to EUR -1.0-0.0 million.

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PostHeaderIcon Rebound strengthens with new Development Director

Rebound Electronics is strengthening its global business development with the appointment of Mike Fitzpatrick to Group Business Development Director.
Mike joined the company in 2008 as regional sales manager, progressing to sales director in 2011. This new remit has been created to ensure that Rebound customers are aware of, and benefit from, the full range of services available that fit their business needs.

Commenting on his new role at Rebound, Mike said, “This role is going to bring new opportunities at a time when the Group is seeing both expansions in business and an increase in customers. I’m excited to be a part of this growth and looking forward to using my experience to help introduce our group services, which add real value, to more of our customers”.

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PostHeaderIcon China Unicom to provide Goodspeed’s network in China

Uros has entered partnership with China Unicom, that lets international travellers enjoy high-speed mobile Internet in China at a fixed daily rate.
China is the first Asian country where the Goodspeed Internet service is available and with this new addition the service covers now a total of 26 countries, among them also Russia.

Tommi Uhari, CEO at Uros said: “With around 60 million international visitors yearly and ranked as the third most visited country in the world, China is a perfect fit to our existing coverage. The China Unicom partnership is yet another concrete step in bringing easy Internet access to frequent travellers all over the world. Our aim is to remove the fear of bill shock and let people be themselves and productive also when on the road.”

Mr Xinzhong Zhang, General Manager at China Unicom Jixi branch, commented the agreement: “China Unicom is the only operator in China running WCDMA, or also referred as UMTS, network and service. By the end of 2012, China Unicom has established WCDMA HSPA+ networks in over 330 cities in China, and downlink speed is now upgrading from 21 Mbps to 42Mbps. We are pleased to welcome international travellers to China and to provide them with our high quality 3G data service through Goodspeed.”

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PostHeaderIcon Nistec to acquire Eltek

Israeli EMS-provider Nistec will acquire a majority stake of fellow Israeli PCB manufacturer Eltek.
The companies have entered into an investment agreement, where Nistec will acquire 3.5 million ordinary shares for USD 4.2 million. And on top of that, the company is also acquiring all the holdings of Eltek’s major shareholder – Mr. Yossi Maiman (24.1%) – which will make Nistec, upon completion of the transactions, the majority stakeholder with 50.5%.

Erez Meltzer, Chairman of the Board of Directors of Eltek, commented “After 25 years of being the controlling shareholder of Eltek, Mr. Maiman decided to sell his holdings in the Company to a new owner with strategic ties to the Company’s business. Nistec’s investment in Eltek will enable Eltek to continue to grow and strengthen its leading position in the high-end PCB industry and expand into new niche markets within the industry. Eltek has presented nice profitability in the last nine quarters and I am confident that it will continue on this track in the future.”

Arieh Reichart, President and Chief Executive Officer of Eltek commented, “I would like to thank Mr. Maiman for his long relationship with the Company, supporting our 10 fold growth since he first acquired shares in Eltek, and helping in its positioning at the very front of the worldwide Flex-Rigid PCB industry.”

“We congratulate and welcome Nistec following its decision to significantly invest in Eltek. This investment is an important validation of our vision and achievements and will support our long-term growth plans,” Mr. Reichart concluded.

The investment agreement and certain ancillary agreements are subject to approval at a shareholder meeting scheduled to take place within 60 days.

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PostHeaderIcon ‘GPV’s 2012/13 performance is satisfactory’

Danish contract manufacturer GPV Group come out of a satisfactory full fiscal year 2012/2013, with a 43 percent increase in profits.
GPV, an EMS-provider anchored in Europe and Thailand, shows an increase in operating profit (EBIT) of 30 percent on 2011/12. Profit for the year continues at a modest level, however showing an increase of 43% on last year.

As expected, total revenue for 2012/13 came to DKK 718m (96 million euro) against DKK 740m for 2011/12, a decrease of 3%. The limited decrease in activity level should be seen in relation to the general stagnation/downturn in the market combined with the addition of new products within GPV’s recurring business.

Also in 2012/13, GPV has focused on managing capacity costs and enhancing efficiency with the result that GPV ends 2012/13. Operating profit (EBIT) amounted to DKK 30.2m (4 million euro) against DKK 23.3m for 2011/12.

Profit for the year was DKK 3.9m (just above 0,5 million euro) against DKK 2.7m for 2011/12.


”In 2012/13, GPV continued the development of the basic business at the same time as a range of strategic initiatives have been commenced.
The work on these initiatives will continue in 2013/14, just as more strategic initiatives will be launched. The aim of the focused efforts is to increase the value creation for our customers, for GPV, and for our owners.

FY 2013/14 appears to be characterized by a continuation of the economic instability that prevails especially in Europe, and against this backdrop GPV expects only modest growth in revenue and an operating profit (EBIT) as well as a positive cash flow from operations at level with 2012/13.”



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