04/10/2013 //
The February U.S. “Factory Orders” report was released last week. It contains monthly shipments, orders and inventories for electronic equipment and components as well as related end markets.
Source: www.census.gov/indicator/www/m3/
The Semiconductor Industry Association (SIA) announced that worldwide sales of semiconductors reached $23.25 billion in February 2013, up 1.4% from February 2012. Global sales from February 2013 were 3.8% lower than the January 2013, reflecting seasonal trends, but year-to-date sales through February 2013 were 2% higher than at the same point last year. All monthly sales numbers represent a 3-month moving average.
“Despite persistent economic uncertainty, the global semiconductor industry is off to a promising start in 2013 – led by strength in memory sales – and is ahead of last year’s pace,” said Brian Toohey, president and CEO, Semiconductor Industry Association. “To help spur stronger growth, Congress and the Administration should invest in basic research to boost American innovation, reform the high-skilled immigration system to welcome the top scientific minds from around the world, and modify the tax system so businesses can expand, invest and hire new workers.”
Source: www.sia-online.org/
Custer comments:
Source: Custer Consulting Group
Total worldwide semiconductor revenue reached $299.9 billion in 2012, down 2.6% from 2011, according to Gartner, Inc. With the overall semiconductor market decline, the number of vendors that declined among the top 25 outnumbered those that grew.
Gartner said the top 25 semiconductor vendors' revenue declined slightly faster, at 2.8%, than the industry as a whole and accounted for almost the same portion of the industry's total revenue — 68.9% in 2012, compared with 69.0% in 2011.
"The normal drivers of semiconductor industry growth — the computing, wireless, consumer electronics and automotive electronics sectors — all suffered serious disruption in 2012," said Steve Ohr, research director at Gartner. "Even the industrial/medical, wired communications and military/aerospace sectors ordinarily less affected by changes in consumer sentiment suffered severe declines in semiconductor consumption. Excess inventory levels also remained a growth inhibitor.”
Intel recorded a 3.1% revenue decline, due to falls in PC shipments. However, it retained the number one market share position for the 21st year in a row. Intel's share was 16.4% in 2012, down from 16.5% in 2011.
Source: www.gartner.com
At 51.2 in March, up slightly from 50.9 in February, the JPMorgan Global Manufacturing PMI, a composite index produced by JPMorgan and Markit in association with ISM and IFPSM, signaled expansion for the third straight month.
The U.S. led the global manufacturing output growth in March (Custer comment: Note Chart 19 where Markit has U.S. PMI increasing while ISM has it dropping), and has now seen production rise throughout much of the past four years. The rate of expansion accelerated in China, while growth was recorded in Japan for the first time in ten months. Europe remained the main drag on the global manufacturing sector, with output declining in both the Eurozone and the UK.
Commenting on the survey, David Hensley, Director of Global Economics Coordination at JPMorgan, said: "According to the global PMI, the manufacturing sector continued to expand in March. Indexes of output and new orders rose slightly to levels consistent with moderate, stable growth in global production."
Sources: JPMorgan and Markit Economics
Bradley Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee said: he PMI registered 51.3, a decrease of 2.9 points from February's 54.2, indicating expansion in manufacturing for the fourth consecutive month, but at a slower rate.
Both the New Orders and Production Indexes reflected growth in March compared to February, albeit at slower rates, registering 51.4 and 52.2, respectively. The Employment Index registered 54.2, an increase of 1.6 points compared to February's reading of 52.6. The Prices Index decreased 7 points to 54.5, and the list of commodities up in price reflected far fewer items than in February. In addition, the Backlog of Orders, Exports and Imports Indexes all grew in March."
Source: www.ism.ws/
Traditional PC Market Predicted to Decline 7.6% as Change in Consumers' Behavior Drives Transition to Tablets and Ultramobiles
Worldwide devices (the combined shipments of PCs, tablets and mobile phones) are on pace to total 2.4 billion units in 2013, a 9% increase from 2012, according to Gartner, Inc. Device shipments are forecast to continue to grow, reaching more than 2.9 billion units in 2017, but the mix of these devices will significantly change over the forecast period.
The proliferation of lower-priced tablets and their growing capability is accelerating the shift from PCs to tablets. "While there will be some individuals who retain both a personal PC and a tablet, especially those who use either or both for work and play, most will be satisfied with the experience they get from a tablet as their main computing device," said Carolina Milanesi, research vice president at Gartner. "As consumers shift their time away from their PC to tablets and smartphones, they will no longer see their PC as a device that they need to replace on a regular basis."
As a result, the traditional PC market of notebooks and desk-based units is expected to decline 7.6% in 2013. This is not a temporary trend induced by a more austere economic environment; it is a reflection of a long-term change in user behavior. Beginning in 2013, ultramobiles will help offset this decline, so that sales of traditional PCs and ultramobiles combined show a 3.5% decline in 2013.
Worldwide tablet shipments are forecast to total 197 million units in 2013, a 69.8% increase from 2012 shipments of 116 million units. "Lower prices, form factor variety, cloud update and consumers' addiction to apps will be the key drivers in the tablet market," said Ranjit Atwal, research director at Gartner. "Growth in the tablet segment will not be limited to mature markets alone. Users in emerging markets who are looking for a companion to their mobile phone will increasingly choose a tablet as their first computing device and not a PC."
In the shares of operating systems (OSs) in device sales, the shift to mobile and the fight for the third ecosystem becomes more evident. Android continues to be the dominant OS in the device market, buoyed by strong growth in the smartphone market. Competition for the second spot will be between Apple's iOS/Mac OS and Microsoft Windows.
Tablets are not the only device type that is seeing aggressive price erosion. Smartphones are also becoming more affordable, driving adoption in emerging markets and the prepay segment 5in mature markets. Of the 1.875 billion mobile phones to be sold in 2013, 1 billion units will be smartphones, compared with 675 million units in 2012.
"The trend toward smartphones and tablets will have much wider implications than hardware displacement," said Ms. Milanesi. "Software and chipset architecture also are impacted by this shift as consumers embrace apps and personal cloud."
Source: www.gartner.com
Copper prices have hit an 8-month low as inventories have risen.
Walt Custer is an industry analyst focused on the global electronics industry. Prior to forming Custer Consulting Group he was Vice President of Marketing and Sales for Morton Electronic Materials, a global supplier of specialty chemicals and process equipment for the PCB industry.
Custer has been a member of the IPC trade organization since 1975 where he received both the President's and the Raymond E. Pritchard Hall of Fame Awards. He is currently a member of the IPC Executive Market & Technology Steering Committee. Custer is also a Director of the EIPC European PCB trade organization.
He authors regular “Market Outlook” columns for Global SMT & Packaging magazine, the Journal of the HKPCA and the TTI MarketEYE website.