ACL Contract Electronics Manufacture

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Welcome to the Assembly Contracts Quarterly Report
With this, we aim to inform our industry colleagues of any relevant news, component lead time updates or market conditions that may affect the manufacture of your product, or the electronics industry in general.
With ACL, in Manchester, as your partner you receive unsurpassed manufacturing quality, delivered on time every time by our IPC trained, experienced workforce. We have hundreds of accounts with suppliers worldwide giving us the ability to source components where others may struggle.

Our sophisticated bespoke, in-house written, purchasing, QA, and production control software is continuously modified in response to market changes. Materials are always purchased well in advance of delivery dates, giving you peace of mind.
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I hope you find the following informative. Please feel free to get in touch if you have any questions or comments.
Supply Chain & Manufacturing
As in quarter 3 pricing has remained relatively high, but is stable. Lead times have reduced somewhat as demand is controlled. The semi-conductor manufacturers have increased production in response to the recent market upturn.
ST logic parts remain on allocation due to their plans to exit this market. They are catching up on supply but we suggest entertaining alternative manufacturers in order to avoid lead time issues and obtain competitive pricing long term.
The fire at memory manufacturer Hynix has pushed up prices in the DRAM market but lead times have remained stable.

Goldman Sachs Group Inc. expects the cost of raw materials to be lower next year. The statistics, however, show a fourth consecutive monthly increase due to further price hikes of crude oil and non-ferrous metals. Much of this increase is linked with positive signs of growth in China who have experienced increases in manufacturing output throughout this year.

Sterling enjoyed a spike as UK manufacturing output activity rose further and traders bet on interest rates rising sooner than the Central bank suggested as UK recovery accelerates and unemployment falls.
Tantalum prices have seen stabilisation through 2013 as demand and supply find a harmonious level.
UK & Global Trends
Germany's growth slowed to a three-month low whilst France showed insignificant growth. Modest growth in other Eurozone countries represents the first period of growth since early 2011.
The Euro has struggled of late after an unexpected rate cut from the European Central Bank.
USD has still being trying to find support from their positive jobs data. As a result Sterling has found itself at an 11 month high against the USD and is also strengthening against the Euro.

Quarter 4 saw the UK manufacturing sector increasing with EEF predicting growth next year of 2.7pc. Demand remains high growing at its fastest rate in two and a half years. New Order strength is the strongest in 20 years and Rob Dobson (senior economist at Markit) predicted the sector is to beat the 0.9pc increase in output witnessed last quarter.

Purchasing Managers UK Index rose to 58.4 (Below 50 represents contraction) in November, it's highest since February 2011, from 56.5 in October affording the pound a five-year high against various other major currencies. Encouraging Sterling strength further is the rate at which the manufacturing sector took on new staff. Markit suggest the pace of employment is the fastest for more than two years having created around 5,000 new jobs a month.

The UK unemployment rate this month has fallen to a four and a half year low of 7.4pc and is expected to drop below 7pc in late 2014, early 2015. As a result interest rates could rise sooner than expected making GBP more attractive to investors. Coupled with continued growth sterling should remain supported, particularly against the Euro.

Chinese New Year is from the 31st January to 7th February with celebrations lasting as long as 15 days. With factory shut downs, longer lead times are to be expected. Supply in the weeks running up to CNY is strained as demand increases. In order to ensure product availability and avoid possible delivery hurdles we kindly advise you to place orders a little more in advance.

Please find enclosed ACL's brochure together with a component pricing and lead time breakdown.

If you would like to discuss any manufacturing requirements please don't hesitate to get in touch with me.
Arthur Woode
Director


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