Domestic End Market Demand Improves, Global Personal Computer Forecast Increased, Fab Spending to Grow 88% in 2010, LCD Panel Component Shortages and More

2010.03.08 // Posted by: Walt Custer // Posted in: Articles, Industry Conditions

U.S. “Factory Orders” – Electronic “Food Chain” Growth in January

January shipments, orders and inventories were released last week by the U.S. Department of Commerce.

The electronic equipment book/bill was 0.98 on a 3-month average basis and 0.97 for January alone (Chart 1). Both order and shipment 3-month (3/12) growth moved further into positive territory (Chart 2) as the instrument and control sector continued its steady growth (Chart 3) and defense electronics orders rebounded (Chart 4).

The ratio of electronic equipment inventories/orders eased to its lowest level since mid-2008 (Chart 5) with all sectors in reasonable control (Chart 6).

U.S. vehicle shipments remained flat (Chart 7) as did defense aircraft (Chart 8) although commercial aircraft shipments dipped.

Military electronics orders (Chart 9) rebounded following generally declining demand since mid 2009. Defense capital goods orders (Chart 10) also grew as their book/bill (Chart 11) turned upward.

Electromedical, measurement and control equipment (Chart 11) continued to drive domestic electronics while communication equipment (Chart 12) was flat and computer orders (Chart 13) eased.

Passive components (excluding semiconductors) rose in parallel to end market growth (Chart 14) but semiconductor shipments to N. America (Chart 15) are growing far in excess of end market demand suggesting that a downward correction is imminent.

(Chart 16) summarizes domestic electronic food chain growth. 3-month (3/12) “lead” the annualized (12/12) growth rates. A number of sectors have returned to positive territory on a 3-month basis with most others very close.

Global PC Shipments: 366 Million Units in 2010; Spending Rising 12% to $245 Billion

Global personal-computer shipments are likely to be about 20% higher this year than last year, said Gartner Inc. as it boosted its forecast (Chart 17).

It said shipments worldwide are expected to total 366.1 million units in 2010, with spending rising 12% to $245 billion. In December it projected 13% shipment growth and a 1.9% spending increase.

"The PC industry will be overwhelmingly driven by mobile PCs, thanks to strong home growth in both emerging and mature markets," said George Shiffler, research director at Gartner. "We expect mobile PCs to drive 90% of PC growth over the next three years."

Gartner also said Apple Inc.'s recently announced iPad tablet has stoked industry discussion about tablet PCs and next-generation tablet devices. Gartner thinks vendors could ship up to 10.5 million traditional and next-generation tablet devices globally this year.

Source: Gartner

Worldwide Fab Spending to Grow 88% in 2010 (Chart 18)

According to the World Fab Forecast report released recently by SEMI, 2010 spending on worldwide fab projects, including construction, facilities, and equipping fabs, could grow by 88% over 2009 levels. Since June 2009, SEMI's World Fab Forecast has consistently predicted spending growth rates of more than 60% for 2010.

This latest projection is based on analyses of recently announced increases in capital spending plans, mainly by foundries and memory companies. Spending for memory has mainly gone into upgrading existing capacity, but in recent months, additional investments for new installed capacity have been announced. Also, a number of existing fab projects that were delayed with -the downturn will move forward this year.

"Total spending on fab projects could approach $30.9 billion this year, well above the estimated $16.4 billion spent in 2009," said Christian Gregor Dieseldorff, senior analyst of fab information of the SEMI Industry Research and Statistics group. "The 2010 spending recovery, however, remains substantially below the $46 billion spent in the 2007 peak year."

In 2009, 27 volume fabs closed, including eleven 200 mm fabs and one state-of-the-art 300 mm fab. (Several planned fab closures were pushed out to 2010.) As a result of fab closures and low spending levels in 2009, installed fab capacity declined to 15.4 million wafers per month (200 mm equivalent). Based on current capital spending plans, installed capacity is forecasted to grow 5% to 6% this year to about 16.1 million wafers per month.

Source: SEMI

LCD Panel Makers: Component Shortages through 3Q’10

Some TFT-LCD panel components, mainly backlight units (BLUs), polarizers and reflector sheets, are in short supply, and further shortages are expected to last to the LCD panel peak season of the third quarter, according to market sources.

The short supply of BLUs is mainly due to the labor shortage in China while the shortage of reflector sheets is the result of a shortage of the raw material, PET films, the sources noted, adding that the polarizer shortage is caused by slow capacity expansion by suppliers.

PET films are needed in the production of LCD panels and solar cells. The recent recovery in the solar cell market has tightened supply of PET films to LCD panel makers, the sources added.

Source: DIGITIMES

Global External Disk Storage Revenue Fell 0.7% y/y to $5.29 Billion in 4Q’09 (Chart 19) & (Chart 20)

Sales of computer data-storage equipment dipped less than 1% in the fourth quarter, industry tracker IDC said, as the market continued to rebound from lows seen earlier in the year.

Global external disk storage revenue in the October-December period totaled $5.29 billion. That compares with $5.33 billion in the year ago period.

For the year, the market fell 10.2% to $18.1 billion.

Source: IDC

World Touchscreen Mobile Device Market to Grow 96.8% y/y to 363 Million Units in 2010

The worldwide market for touchscreen mobile devices will surpass 362.7 million units in 2010, a 96.8% increase from 2009 sales of 184.3 million units, according to Gartner. By 2013, touchscreen mobile devices will account for 58% of all mobile device sales worldwide and more than 80% in developed markets such as North America and Western Europe.

"Touchscreens are no longer the preserve of high-end devices and are now being included in many mid-range phones as more companies have been driving the consumer market for affordable touchscreen phones," said Roberta Cozza, principal research analyst at Gartner. "As phone capabilities increase, consumers are becoming much more aware of the benefits of touch interfaces, and vendors are responding."

Source: Gartner

Global Smart-Phone Market: 448 Million Handsets in FY’14

The world market for smart phones will reach 448 million handsets in fiscal 2014, more than tripling in six years, said MIC Research

MIC expects smart phones to account for 26% of the overall market for mobile phones by then, a 15-point increase from fiscal 2008.

The economic downturn is projected to cause the global market for all mobile phones, including smart phones, to dip 2% from fiscal 2008 to 115.86 million units in fiscal 2009, but the company sees growth resuming from fiscal 2010 and a global market of 1.74 billion units in fiscal 2014.

Source: The Nikkei Business Daily

U.S. Manufacturing Growth Pace Slows (Chart 21)

The Institute for Supply Management, an industry trade group of purchasing executives, said its manufacturing index was 56.5 last month, down from 58.4 in January.

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