Business Cycles in the Electronic Equipment Food Chain - Growth Comparisons and Forecasts for Process Consumables & Equipment,Passive Components,Semiconductors and Electronic Equipment
Fluctuating demand for electronic equipment has led to repetitive “boom and bust” business cycles throughout the electronics
“food chain.” Double ordering,inventory building and component outages in expansionary times are followed by
recessionary periods where demand shrinks,excess inventory must be consumed and severe downward pricing and margin
pressures are the norm. Raw material and process equipment suppliers see amplified demand in growth periods and severe
draughts during recessions because of inventory building and reductions at each level of the supply chain.
This paper compares the relative growth (and time shifts) at each level of the supply chain at various periods in the business
cycle. Items studied include:
- Economic indicators
- Electronic equipment orders,shipments and inventories by end market
- Semiconductors
- Connectors
- Printed circuit boards
- EMS demand
- Process consumables and equipment used to manufacture and test “members” of the electronics food chain.
Global and N. American data sources are identified and utilized including process consumables from the IPC statistical
surveys.
These data sources can be used to understand and predict the timing and magnitude of forthcoming downturns and recoveries
in the electronic industry business cycle. The methodology discussed applies to the entire “food chain” – electronic
equipment manufacturers,EMS companies,PCB and other component manufacturers and suppliers of materials and
equipment to these companies.