Weekly Global Update for December 31, 2014

U.S. November Electronic Equipment Orders and Shipments Decline

The November U.S. “Durable Goods” report was just released.

• The three month average electronic equipment book/bill ratio was 1.06 (Chart 1) but this positive ratio is a bit misleading as both orders and shipments declined (Chart 2).
• 3/12 Growth rates for both orders and shipments dropped (Chart 3) as they barely remained in positive territory (3/12 >1).
• Defense capital equipment orders and shipments were flat (Chart 4).
• Aircraft shipments declined (Chart 5) as have orders returned to their trend line (Chart 6).
• Communication (Chart 7) and Computer (Chart 8) orders and shipments were also flat.

North American November PCB Results (Charts 9-11)

Total North American PCB shipments decreased 3.4% in November 2014 from November 2013, bringing year-to-date shipment growth to -1.2%. Compared to the previous month, PCB shipments were down 5.0%.

PCB bookings increased by 12.4% compared to November 2013, improving the year-to-date order growth rate to -0.1%. Order growth declined 25.5% in November compared to the previous month when orders were unusually strong.

The North American PCB book-to-bill ratio edged up to 1.06 in November.

“Although PCB sales in North American continued below last year’s level in November, orders again came in above last year,” said Sharon Starr, IPC’s director of market research. “Strong orders in the fourth quarter have driven the book-to-bill ratio into positive territory, which offers hope that year-on-year PCB sales growth will turn positive in 2015,” she added.

Source: www.ipc.org

South Korean PCB Shipments Down 11.5% (Chart 12)

Composite quarterly sales of 11 publicly traded South Korean PCB manufacturers were down 11.5% in 3Q’14 vs. 3Q’13. The decline from the 2Q’13 peak appears to have abated however. The eleven companies included in the sales composite are listed on the bottom of Chart 12.

Source: Company financial reports

North American Semiconductor Equipment November Book/Bill = 1.02 (Charts 13 & 14)

North America-based manufacturers of semiconductor equipment posted $1.22 billion in orders worldwide in November 2014 (3-month average basis) and a book-to-bill ratio of 1.02, according to SEMI.

The three month average of worldwide bookings in November 2014 was $1.22 billion, 10.4% higher than October 2014 and 1.7% lower than the November 2013.

The three month average of worldwide billings in November 2014 was $1.19 billion, 0.5% higher than October 2014 and 6.8% higher than the November 2013.

"With the rise in bookings, the book-to-bill ratio climbed above parity in November," said SEMI president and CEO Denny McGuirk. "2014 has been a solid growth year for the semiconductor equipment market and we expect the foundry and memory sector to continue leading investments in 2015."

Source: www.semi.org

Taiwan, China Notebook Vendors Halt Notebook Sales in Russia

Asustek Computer, Acer, Micro-Star International (MSI), Gigabyte Technology and Lenovo have stopped selling their notebooks in Russia as they have been suffering losses due to a free fall of the country's currency.

These notebook brand vendors' most popular products in Russia are high-end and gaming models.

Source: www.digitimes.com

South Korean and Taiwanese Companies Control 56% of Global 300mm Fab Capacity (Chart 15)

Vast majority of that wafer capacity is local to those two countries.

South Korean and Taiwanese chip companies are well known for manufacturing prowess when it comes to efficiently fabricating huge amounts of IC wafers. Most of the IC industry’s biggest fab facilities are located in these two countries. Because of their fab operation and wafer fabricating expertise, IC companies headquartered in South Korea and Taiwan lead the way in capital-intensive segments of the IC industry such as high-unit-volume products like DRAM and flash memory or foundry services making ICs for companies without fabs and a growing number of companies with fabs.

Source: www.icinsights.com

Global LED Lighting Market $29.90 Billion in 2015 (Chart 16)

Global market demand for LED lighting in 2015 is valued at US$29.90 billion, consisting of US$5.750 billion for Europe, US$5.624 billion for the US, US$5.078 billion for Japan, US$4.568 billion for China, US$1.237 billion for Russia and US$822 million for India, according to Digitimes Research.

On-year growth in 2015 LED lighting market value will be 38.0% for Europe, 33.1% for the US, 13.2%for Japan, 46.5% for China, 26.9% for Russia and 34.1% for India, Digitimes Research indicated.

The Japan market will have the highest LED lighting penetration (LED lighting value as a proportion of total value for all lighting products) of 78.6% in 2015, followed by the U.S. market with 28.7%, the Russia market with 27.5%, the Europe market with 26.3%, the China market with 24.7% and the India market with 24.4%.

Source: www.digitimes.com

End of CRT TV Era (Chart 17)

With the production of cathode ray tube televisions expected to end as early as 2015, Japanese makers are hoping to get a an advantage on its South Korean rivals as customers replace aging TVs with liquid crystal displays in areas such as Southeast Asia and India, where CRT TVs remain popular.

According to DisplaySearch three million CRT sets are expected to be shipped in 2014 to the Asia-Pacific region, which includes Southeast Asia and India, compared with 28.4 million LCD sets. Shipments of LCDs to the region are expected to hit 43.22 million units in 2018.

Worldwide shipments of CRT sets hit 165.93 million units in 2004, about 19 times the number of LCD sets shipped that year.

Source: the-japan-news.com

U.S. GDP Grew at a 5% rate in 3Q’14; Consumer Spending Rose (Chart 18)

The U.S. Commerce Department revised its gross domestic product growth estimate to 5% in the third quarter, citing stronger consumer and business spending.

Source: www.bea.gov/national/