Everyone knew 1986 was a terrible year for US printed circuit board manufacturers. But few people realised the extent of the damage to the industry done by plummeting prices and increased competition from the Far East. Prices have fallen as much as 40%, and margins are at an all-time low. And it’s had its effect on the manufacturers, both captive and independent. According to market research firm Kirk-Miller Associates, 65 board makers went under through November of 1986. The Palo Alto, California, company told Electronic News that 1986 was a flat year for circuit board sales, with shipments at $4,100m. But in 1984, shipments were $5,400m.US-based board makers are really facing two problems. The prolonged slump in the computer industry in general has reduced demand for their product. And at the same time, increased competition from manufacturers in Taiwan, Singapore et al have been swiping sales from under their noses. The net result: the closing of almost 7% of all printed circuit board makers, and the flight of the survivors to safer – offshore – manufacturing havens. So far, it has been the small- and medium-sized manufacturers that have suffered the most, Kirk-Miller says. These smaller firms, with sales of under $20m a year, were least able to survive the drastic price cutting and concurrent reduction of margins brought about from increased imports. But the total number of closings might top 100 before all’s said and done. Industry analysts believe that sales will eventually grow again. By 1990, total shipments may reach $5,300m, which is to say, almost to 1984 levels. US firms admit that it will be tough to match Far East prices, but figure that they can eventually turn things around because of better quality and sharper design than their competitors. All of which is discouraging news for our local players here in the UK, the TDS Circuits and Prestwick Circuits of the printed board world.
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