U.S. Tech Market Shows Signs of Life
A Refresh Cycle At Last

April 10, 2010
By Larry Barrett

Thanks to a boost from a substantial corporate upgrade cycle and the improved demand for strategic software investments in Software-as-a-Service (SaaS) and service-oriented architecture (SOA) projects, the U.S. technology market is poised for robust rebound in 2010, according to Forrester Research’s latest report.

After years of delaying or truncating investment in new equipment and software, enterprise customers are finally opening up their wallets for IT purchases that improve overall organizational efficiency and help companies differentiate themselves from their competitors, researchers said.

“The tech downturn of 2008 to 2009 is unofficially over,” Andrew Bartels, a Forrester vice president and principal analyst, said in the report. “With growing evidence that an economic recovery started in the US and other countries in Q3 2009, the pieces are in place for a 2010 tech spending rebound.”

In 2010, Forrester is predicting the total U.S. IT market will grow 8.4 percent, up from the 8.1 percent improvement it previously forecast. It now expects global IT spending will improve about 7.7 percent this year, a little slower than it previously forecast mainly due to international currency fluctuations.

Computer equipment, particularly the replacement of older PCs, servers and storage equipment, is now expected to surge 11.1 percent from 2009 while software sales will improve 10.5 percent.

“For software, growth will result from a mixture of the revival of deferred licensed software purchases following the 2009 capital freeze, ongoing growth in SaaS software, and continued strong growth in smart computing platform technologies like service-oriented architecture (SOA) infrastructure, virtualization software, and analytics,” the report said.

Computer equipment sales are now projected to rise to around $83 billion with PCs accounting for roughly $39 billion of that. Communications equipment will top out at $108 billion, while telecom services and IT services and outsourcing spending will check in at $191 billion and $165 billion, respectively.

Total U.S. business and government IT spending will total more than $741 billion this year, of which about $194 billion will be spent on software — the single largest category. New applications will represent $88 billion in investment, followed by custom applications at $43 billion and middleware and operating systems software coming it at $52 billion and $11 billion apiece.

Forrester’s findings dovetail with early projections from major manufacturers, software developers and independent research firms.

Gartner earlier this year predicted total PC unit shipments would improve more than 20 percent this year to a total of more than 366 million units shipped, up from 305.8 million units in 2009.

By industry, Forrester expects U.S. financial services and insurance companies to increase their total IT spend by 11.4 percent this year while manufacturers and telecom companies will ramp up their IT spending by 9.8 percent and 9 percent, respectively.

Larry Barrett is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

Please see us at: www.pcb-solutions.com is a supplier of Domestic and Asian Rigid, Flex and Rigid-Flex Printed Circuit Boards (PCBs), Domestic Tier I PCBA, Domestic Sheet Metal, Domestic Injection Molding and other Custom Fabricated Services

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James Brown
V.P. Sales & Marketing
PCB Solutions, LLC
jamesb@pcb-solutions.com

PCB Industry Growth Rates and Book-to-Bill Ratios Announced
Rigid PCB shipments are down 2.0 percent while bookings increased 19.8 percent in January 2010 from January 2009. The book-to-bill ratio for the North American rigid PCB industry in January 2010 remained strong at 1.06.

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Flexible circuit shipments in January 2010 were down 4.1 percent but bookings were up 59.3 percent compared to January 2009. The North American flexible circuit book-to-bill ratio climbed above parity to 1.03.

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For rigid PCBs and flexible circuits combined, industry shipments in January 2010 decreased 2.1 percent from January 2009, as orders booked increased 22.2 percent from January 2009. The combined (rigid and flex) industry book-to-bill ratio in January 2010 held steady at 1.05.

“The best news from our January PCB surveys is the huge growth in orders compared to January of last year,” said IPC President Denny McGuirk. “Sales are still down slightly from last year but are increasing steadily,” he added. “The book-to-bill ratio for all PCBs has stayed above 1.0 for nine months now, indicating continued sales growth in 2010,” McGuirk concluded.

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The book-to-bill ratios are calculated by dividing the value of orders booked over the past three months by the value of sales billed during the same period from companies in IPC’s survey sample. A ratio of more than 1.00 suggests that current demand is ahead of supply, which is a positive indicator for sales growth over the next two to three months.

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Book-to-bill ratios and growth rates for rigid PCBs and flexible circuits combined are heavily affected by the rigid PCB segment. Rigid PCBs represent an estimated 90 percent of the current PCB industry in North America, according to IPC’s World PCB Production and Laminate Market Report.

Every January, IPC opens its monthly statistical programs to new participants, resulting in a slight change in the survey sample. Therefore, January’s month-to-month growth rates are not available. Reporting of month-to-month and year-to-date growth rates will resume next month.

The Role of Domestic Production
IPC’s monthly survey of the North American PCB industry tracks bookings and shipments from U.S. and Canadian facilities, which provide indicators of regional demand. These numbers do not measure U.S. and Canadian PCB production. To track regional production trends, however, IPC asks survey participants for the percent of their reported shipments that were produced domestically (i.e., in the USA or Canada). In January 2010, 82 percent of total PCB shipments reported were domestically produced. Domestic production accounted for 82 percent of rigid PCB and 72 percent of flexible circuit shipments in January by IPC’s survey participants. These numbers are significantly affected by the mix of companies in IPC’s survey sample, which changed slightly in January but will remain constant through the remainder of the year.

Bare Circuits Versus Assembly
Flexible circuit sales typically include value-added services such as assembly, in addition to the bare flex circuits. In January, the flexible circuit manufacturers in IPC’s survey sample indicated that bare circuits accounted for about 56 percent of their shipment value reported for the month. Assembly and other services make up a large and growing segment of flexible circuit producers’ businesses. This figure is also sensitive to changes in the survey sample, which may occur at the beginning of each calendar year.

Interpreting the Data
Year-on-year and year-to-date growth rates provide the most meaningful view of industry growth. Month-to-month comparisons should be made with caution as they may reflect cyclical effects. Because bookings tend to be more volatile than shipments, changes in the book-to-bill ratios from month to month may not be significant unless a trend of three consecutive months or more is apparent. It is also important to consider changes in bookings and shipments to understand what is driving changes in the book-to-bill ratio.

The information in IPC’s monthly PCB industry statistics is based on data provided by a representative sample of both rigid and flexible PCB manufacturers in the USA and Canada. IPC publishes the PCB Book-to-Bill Ratio and the PCB Statistical Program Report each month. Statistics for the previous month are not available until the last week of the following month.

Through the years, the printed wiring board industry has had to evolve in both materials and processes to meet the needs of the world’s electronic challenges. At first the laminate resin systems were inadequate to survive thru multiple thermal excursions of double-sided assembly and rework processes, then the need to meet the high speed signal integrity requirements were needed and now because of the environmentally friendly initiatives of RoHS have again asked the industry to step it up.

Currently most printed wiring boards can meet RoHS (Restriction of Hazardous Materials) directive requirements as long as the boards’ surface finish does not contain lead. Most if not all laminate manufacturers have already removed or reduced mercury, cadmium, hexavalent chromium, polybrominated biphenyls and polybrominated diphenyl ether levels to meet the directive. The challenge has been how to reliably attach components to the PWB without the use of lead, which have higher temperature and longer oven dwell times due to lead free metals being used. For this you need to look at the laminate materials Td rating (Time to Decomposition).

That’s right, even though material Tg has been the main focus of a laminates ability to survive temperature for years, it is not as important as the material’s Td.

Td is the measure of how long a material can handle the higher temperatures of the assembly process. Materials are more thermally resistant as evidenced by their higher Td rating and their ability to achieve a T260 or T288. A T260/288 (Time to Delamination) is the amount of time the material can withstand exposure to 260 / 288°C.

However, if you have a low cost double sided board that requires the use of lead free solder, it may not necessarily mean that you need the higher Tg/Td laminate. Talk to your assembler; you may be spending more than you need to on raw material costs, and being that laminate costs are the single highest material cost of the printed wiring board, it may be worth running some tests by subjecting boards to multiple Pb free reflow cycles to verify it’s resistance to delamination and blistering.

It is true that lead free solder does require higher reflow temperatures and longer dwell times but if the overall density of board is low, it will reflow faster because the entire structure heats up faster and does not require as long of a time in the assembly ovens to get up to the necessary reflow temperature to make a good solder joint, the lower Tg/Td material can reliably withstand the assembly process. Keep in mind that even standard 130dC Tg laminates made today are superior materials that meet RoHS requirements and work well for many different applications and in many cases can take a the thermal excursion of lead free assembly.

On the other hand if you have an expensive multilayer board that has a lot of copper planes, high density, it takes the structure much longer to heat up in order to reflow all the solder joints, in this case you need the extra assurance of high Td rated laminate systems.

If you have questions regarding materials or anything else PCB- Send us an email at info@pcb-solutions.com and we will be happy to guide you in the right direction. For more detailed information on Surface Finishes, visit our Surface Finish presentation in the Tech Zone at http://www.pcb-solutions.com/files/TECHZone-09-02-surface-finish.pdf

Please visit our home page at: www.pcb-solutions.com We are a supplier of Domestic and off-shore Rigid, Rigid-Flex and Flex Printed Circuit Boards (PCBs), Domestic Military PCBs, Domestic Tier I PCBA, Domestic Sheet Metal, Domestic Injection Molding and other Custom Fabricated Services.

http://www.pcb-solutions.com/pcb.html

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Bob Neisis

Quality Manager

PCB Solutions, LLC

bobn@pcb-solutions.com

There is an old saying “Nothing Solders Like Solder” but because of shrinking component footprints, environmental initiatives, cost, reworkability, mixed technology boards, ease of assembly and of course reliability finding the right finish for your product has made the selection of PWB surface finishes a little more complex.

There has been various attempts to solve the many issues, there was high hopes for the many finishes including Organic solderability preservatives, immersion silver, immersion tin, non leaded solder, electroless nickel immersion gold, flash gold, electroless nickel immersion paladium immersion gold however some are not available at all PWB shops, some designs require multiple surface finishes that are not compatible and all of them have there pros and cons.

Other than the tried and true leaded solder, the one surface finish that seems to have lasted the longest and has gained the most acceptance is ENIG (Electroless Nickel Immersion Gold) because it has a long shelf life, a flat surface and is still relatively inexpensive due to the gold’s ultra thin thickness even though gold prices are now reaching all time highs.

The selection of surface finish needs to done with your Electronic Manufacturing Service partner because when assembled boards have solderability issues, they are the ones that have to deal with the domino effect and headaches of costly rework and fleeting schedules.

If your surface finish is the cheapest but often requires assembly rework, the extra cost of a surface finish from the PWB shop is a fraction of the cost when schedules slip, rework starts and blame is in abundant supply.

If you have questions regarding surface finishes or anything else PCB- Send us an email at info@pcb-solutions.com and we will be happy to guide you in the right direction. For more detailed information on Surface Finishes, visit our Surface Finish presentation in the Tech Zone at http://www.pcb-solutions.com/files/TECHZone-09-02-surface-finish.pdf