Northbrook, Ill.--April 22, 1998--A majority of United States printed wiring board (PWB) and electronics manufacturing services industry (EMSI) companies continue to experience little or no pricing pressures as a result of the Asian economic crisis. That's according to the Institute for Interconnecting and Packaging Electronic Circuits (IPC), which released results of its survey, "Effects of the Asian Economic Crisis on the US PWB and EMS Industries." It is the second in a series of studies performed by IPC on the impact of the Asian crisis.
96 US companies (58 PWB, 32 EMS, and 6 who indicated that they served both segments) responded to the IPC survey, out of a total population of 535, representing an 18 percent response rate.
52 percent of PWB manufacturers and 86 percent of EMSI companies say the Asian economic crisis has had no impact on their businesses. In the January survey, 65 percent of U.S PWB manufacturers said they were feeling no ill effects from the Asian situation. EMSI companies were not tracked in the earlier study.
Among PWB manufacturers, large companies were most likely to experience pricing pressure. 78 percent of PWB companies with 1997 revenues of $40 million or more reported experiencing pricing pressure. Of those companies, 50 percent reported pricing pressures in the mild-to-strong range. Participants who were not affected by the Asian crisis were asked to indicate why. The key factors were identified as: customer base--55 percent, the custom nature of their work--21 percent, technology level--14 percent, and emphasis on service--10 percent.
The majority of respondents to the IPC survey are optimistic that the events in Asia will have no impact on their earnings in 1998. Exactly two-thirds of all respondents indicated earnings would be unaffected. EMS companies were the most secure; only 14 percent expected earnings to be negatively affected, compared with 43 percent of PWB manufacturers. The view of PWB companies remained relatively constant between the two survey periods in the study. In January, 41 percent of PWB manufacturers reported they expected earnings to be affected.
Respondents were also asked to report if the Asian crisis would make it more likely that they would increase sourcing of certain key items from Asian suppliers. Overall impact on sourcing is expected to be low, with over 80 percent of respondents indicating that the Asian economic crisis would have no impact on sourcing of PWBs, components, and chemicals.41 percent of all PWB companies indicated that current events would make sourcing of laminate from Asia more likely. In January, 27 percent of PWB companies indicated the crisis might lead them to increase laminate sourcing from Asian suppliers.
Stephanie A. Kaplan, IPC director of market research
(847) 509-9700, ext. 317
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