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20 The PCB Magazine • December 2014 seeking a second source elsewhere) suggest a po- tential further shrinkage in output and failure to achieve any positive growth over the next couple of years. With the military and aerospace segments accounting for a large share of the do- mestic market for PCBs, the strong forward order book for commercial airliners should play a part in sustaining demand growth in this region. Japan has been offshoring its electronics production in recent years and domestic pro- duction growth has been mostly negative as can be seen from the 6/12 growth chart of Figure 11, where the growth curve has remained in the negative growth domain for most of the past six years with the exception of 2010 and end of 2013 to early 2014. A short-lived recovery at the end of 2013 almost immediately reversed again and electronics output here would seem to be in decline for the foreseeable future. Even with an immediate and steep upturn in the cycle it will take a year to reach positive growth and history suggests that it would not be sustained. Similarly, Japan's domestic PCB production has continued its downward slope with clo- sures and consolidations. In 2014, the indus- try is struggling, and although the decline is likely to be about 5% quantified in yen, it will exceed 20% if converted to U.S. dollars at cur- rent exchange rates. Figure 12 shows the nega- tive growth driving the Japanese PCB industry contraction since 2010 and the expected lack of growth going forward to 2017. With the rest of Asia, and particularly China, dependent on demand from the West for their export markets, the struggling economies of Eu- rope and to a lesser extent North America have not provided a sufficiently strong market and so demand for computers and portable electron- ics has not increased hugely, with the growing markets for tablets and smartphones offset by reduced demand for PCs and standard hand- sets. Smartphone makers are also experiencing increased pricing competition which is driving revenues down. Revenue growth in Q3 14 has slowed for South Korean electronics companies. Singapore reported a 10% contraction in de- mand for computer peripherals in the first eight months of 2014. Taiwan has increased produc- tion of portables but demand for audio-visual products has fallen. One of the strongest sectors has been com- munications infrastructure, particularly in Chi- na where it is driven by large increases in capital expenditure by its three major operators follow- ing allocation of the 4G licenses. This has re- sulted in a large spurt in production of 4G base stations (both for domestic and export mar- kets). This is clearly shown in Figure 13 which compares the production indices for various ap- plications. Figure 11: Japan electronics production 6/12 growth. (Source: Jeita) 2015 OUTLOOk FOR THE PCB INDUSTRy: A GLOBAL PERSPECTIvE continues