Japan's major PCB manufacturing plant, CMK, issued a press release on the 5th of August, announcing that the US-China trade tensions have resulted in the automobile market regression and have reduced the sales of PCBs for vehicles as well as communication-related machines (smartphones) and that PCB sales for game consoles are expected to decrease. Together with the order reduction of vehicle PCB, the decline has also resulted in the weakening in the capacity utilization of Japanese factories as well as an increase in the associated cost burden of investments for growing production in Thai factories. As a result, the objective of consolidated revenue this year (April 2019 to March 2020) will be revised and lowered from the original estimate of JY94 billion to JY87 billion (a reduction in 3.6% year-on-year), the objective of consolidated operating margin is lowered from JY4 billion to JY2 billion (a reduction in 46.9% year-on-year), and the objective of consolidated net profit is lowered from JY2.7 billion to JY1.2 billion (a reduction in 40.5% year-on-year).

 

CMK also announced their financial statement for the previous quarter (April-June 2019) and their consolidated revenue dropped by 3.5% to JY21.311 billion, the consolidated operating profit margin decreased by 81.0% to JY144 million, and the consolidated net loss is JY74 million (their net profit last year was JY239 million).

 

In addition, CMK’s PCB for automobile sales last year increased by 6% to JY17.3 billion, while the sales of PCB for communication-related equipment (smartphone) drastically decreased by 71% to JY200 million. Moreover, the PCB sales for AV/digital home appliances were JY200 million (this amount is equal to the same period in 2018), while the PCB sales of digital cameras decreased by 25% to JY300 million and the sales of PCBs for game consoles were 0 (it was JY400 million in the same period last year).

 

In terms of regional performance, the revenue of CMK in the Japanese market fell by 4.2% to JY12.27 billion compared to that of the same period last year. As for the market in China, the revenue fell by 8.3% to JY3.74 billion, in Southeast Asia, the revenue increased by 10.9% to JY3.722 billion, and in Europe and the United States, the revenue decreased by 13.8% to JY1.578 billion.

 

As indicated by the statistics released by the Japan Packaging Circuits Association (JPCA) on July 12, the output of Japanese printed circuit boards (PCB: hardboard + flexible board + module substrate) fell by 14.9% to 1.014 million square meters in May 2019 compared to the same period last year, showing a decline for the sixth consecutive month. Furthermore, the sales output has decreased by 3.5% to JY36.918 billion, showing a decline for the fifth consecutive month. (News source: MoneyDJ).