09/18/2013 //
Chart 1 summarizes industrial production growth (month in 2013 vs. same month in 2012) for key countries. European growth slowed in July. Chart 2 supports this July European slowdown with only the UK growing and Germany, France, Italy and the EU27 contracting.
However, based on the August PMI leading indicator (Chart 3) the outlook looks better going into autumn.
Europe's electronic industry contracted in July, hopefully to regain growth in August and beyond as noted above. Based on July 2013 Eurostat data:
Thanks to our colleague Michael Gasch here is an update on the European printed circuit industry:
Leading indicators rose for all major Asia countries, suggesting that sales will improve beyond August (Chart 19)
For Taiwan listed companies, many with manufacturing in China, consolidated sales were:
The worldwide smart connected device market, comprising PCs, tablets, and smartphones, is forecast to grow 27.8% year-over-year in 2013, slightly lower than the 30.3% growth in 2012. The growth will be driven by tablet and smartphone shipments, while the PC outlook has been lowered by 10% in 2013. As a result, the International Data Corporation (IDC) Worldwide
Quarterly Smart Connected Device Tracker expects tablet shipments to surpass total PC shipments (desktop plus portable PCs) in the fourth quarter of 2013 (4Q'13). PC shipments are still expected to be greater than tablet shipments for the full year, but IDC forecasts tablet shipments will surpass total PC shipments on an annual basis by the end of 2015. Smartphones will continue to ship in high volumes, surpassing 1.4 billion units in 2015 and accounting for 69% of all smart connected device shipments worldwide.
In terms of shipment value, the worldwide smart connected device market will again exhibit double-digit year-over-year growth of 10.6% in 2013, but this growth will gradually slow to just 3.1% in 2017. The tapering revenue forecast reflects the increasing impact of low-cost smartphones and the white box tablet market. Worldwide smart connected device value is expected to be $622.4 billion in 2013, of which $423.1 billion will come from the sub-$350 smartphone and sub-$350 tablet segments collectively. "At a time when the smartphone and tablet markets are showing early signs of saturation, the emergence of lower-priced devices will be a game-changer," said Megha Saini, Research Analyst with IDC's Worldwide Quarterly Smart Connected Device Tracker. "Introducing new handsets and tablet devices at cheaper price points along with special initiatives like trade-in programs from Apple and BestBuy will accelerate the upgrade cycle and expand the total addressable market overnight."
IDC expects the lower-cost devices to drive interest worldwide and help to spark uptake among first-time buyers in commercial sectors like education. A new round of device cannibalization is also expected to kick in, but this time with large-screen (5+ inch) smartphones beginning to impact the smaller (7-8 inch) tablet market. "The device world has seen several iterations of cannibalization impacting different categories, with the last few years focused on tablets cannibalizing PC sales," said Bob O'Donnell, Program Vice President, Clients and Displays. "Over the next 12-18 months, however, we believe the larger smartphones, commonly called 'phablets', will start to eat into the smaller-size tablet market, contributing to a slower growth rate for tablets."
Looking forward, the worldwide smart connected device space will continue to surge, with overall shipments surpassing 2 billion units by the end of 2015 with a market value of $735.1 billion. In terms of device mix, total PC shipments accounted for 28.7% of the smart connected device market in 2012 while tablets accounted for 11.8% and smartphones for 59.5%. By 2017, total PCs are expected to drop to 13%, while tablets and smartphones will contribute 16.5% and 70.5% respectively to the overall market. The shift in demand from the more expensive PC category to more reasonably priced smartphones and tablets will drive the average selling price (ASP) for the collective market from $462 in 2012 to $323 in 2017.
SEMI reported that worldwide semiconductor manufacturing equipment billings reached US$ 7.55 billion in the second quarter of 2013, up 3% vs. first quarter of 2013 and 27% lower than the same quarter a year ago.
Worldwide semiconductor equipment bookings were $9.17 billion in the second quarter of 2013, 5% lower than the same quarter a year ago and 18% higher than the bookings figure for the first quarter of 2013.
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.