November sales for Taiwan-listed companies (many of which manufacture in China) were just released:
- Electronic equipment shipments rose 3.2% sequentially from October 2015 but were down 1.1% compared to October 2014. YTD 2015 is up 4.1% compared to the same period in 2014 (Chart 1).
- ODM sales were up 2.9% sequentially from October but down 0.5% in November 2015 versus November 2014. YTD they were up 5% compared to 2014 (Chart 2).
- TFT-LCD display producers’ sales continued to decline (Chart 3).
- Semiconductor shipments to Asia/Pacific are well aligned with Taiwan/China electronic equipment shipments on a 3/12 growth basis. There appears to be no inventory building (Chart 4).
- Wafer foundry sales dropped sharply in November after jumping in October (Chart 5).
- Package and Test (Chart 6) and memory (Chart 7) shipments declined while passive component sales were little changed from October (Chart 8).
- Solar/photovoltaic products saw modest sequential growth in November versus October (Chart 9).
- Printed circuit board sales were flat in November versus October. YTD they are down 2% compared to the same period in 2014 (Chart 10).
- CCL (PCB laminate) sales dropped sharply in November (Chart 11). YTD 2015 versus 2014 CCL shipments were unchanged.
Source: Company financial reports aggregated by Custer Consulting Group
Worldwide Semiconductor Manufacturing Equipment Billings increased 9% y/y to US$9.6 billion in 3Q’15; Bookings fell 7% y/y to $8.7 billion (Chart 12)
SEMI reported that worldwide semiconductor manufacturing equipment billings reached US$9.6 billion in the third quarter of 2015. The billings figure is 3% higher than the second quarter of 2015 and 9% higher than the same quarter a year ago. The data is gathered jointly with the Semiconductor Equipment Association of Japan (SEAJ) from over 100 global equipment companies that provide data on a monthly basis.
Worldwide semiconductor equipment bookings were $8.7 billion in the third quarter of 2015. The figure is 7% lower than the same quarter a year ago and 14% lower than the bookings figure for the second quarter of 2015.
Cellphones Remain Largest Driver of IC Sales, but Growth Stalls; Market for Internet of Things expected to be high-flyer through 2019
The total production value of electronic systems is forecast to decrease 2% in 2015 to an estimated $1,423 billion, marking only the fourth time in history that the systems market registers a decline (previous years were 2001, 2002, and 2009). Total electronic system sales are forecast to reach $1,614 billion in 2019, which represents a compound annual growth rate (CAGR) of 2.1% from $1,454 billion in 2014. Chart 13 compares the relative market sizes and projected growth rates of nine major systems segments covered in IC Insights’ recently released 2016 edition of its IC Market Drivers report. These nine market categories represented approximately 70% of the estimated total production value of all electronic systems in 2015.
Among individual end-use systems covered in detail in the 2016 IC Market Drivers report, cellphones expanded their lead over standard personal computers (desktops and notebooks) as the largest electronic systems market in 2015 after overtaking PCs for the first time in 2013.
Cellphones accounted for 18% of total electronics systems sales ($262.2 billion) versus about 13% for standard PCs ($187.4 billion) in 2015. Cellular phone sales are projected to rise by a CAGR of 2.9% in the 2014-2019 period, while standard PC revenues are expected to slump by an annual rate of -1.7%, partly due to longer upgrade cycles for standard PCs, the influx of tablet computers into the mix of computing platforms, and the growing use of smartphones to access the Internet.
The Internet of Things system market is forecast to show the highest average annual growth rate (21%) through 2019. Aside from this one high-flying market, however, no other system category is forecast to average annual growth of more than 7%. In fact, the standard PC, tablet, and game console system markets are forecast to decline through 2019.
Global Automotive PCB Market Expected to Grow 6.5% y/y to USD 5.28 billion in 2015 (Chart 14)
Global automotive PCB market size was around US$ 4.96 billion in 2014, and is expected to grow by 6.5% to US$ 5.28 billion in 2015.
This compares to an overall global PCB market scale of roughly US$ 59.6 billion in 2014 and an estimated growth of 0.8% in 2015. Automotive PCB is the fastest-growing field in PCB industry, and will sustain the momentum until at least 2019.
In automotive PCB field, powertrain holds the largest proportion, about 32% for the time being, including mainly Engine Control Unit, Starter, Alternator, Transmission Control, Fuel Injection, and Power Steering. For xEV, complexity, high voltage, high current and high temperature of Inverter and Converter pose extremely high requirements on PCB.
Powertrain seizes over 50%, followed by Body with about 25% (primarily Lighting, HVAC, Power Door and Seat, Keyless, and TPMS). LED lighting, which enjoys a high share, is highly demanding on PCB, usually adopting MCPCB (Metal Core PCB). Thirdly, Safety systems, consisting mainly of ADAS, ABS, and Airbag, make up about 22%. The last is Cockpit systems, mainly covering Instrument Display and Infotainment.
Automotive PCB has exceedingly high requirement on reliability, creating the biggest threshold. Recall system in automobile industry requires makers to take risks of faulty products. As small makers cannot afford this, they are usually ruled out. Challenges for automotive PCB include reliability, high temperature, high frequency, and high current.
PCBs in automotive engine and gearbox need to withstand high temperature above 150 ℃, so ceramic substrates must be used, for ceramic multilayer substrate contains mainly alumina (Al2O3) and aluminum nitride (AlN). High temperature co-fired ceramic (HTCC) PCB is usually sintered at temperature of over 1600 ℃ and the conductor is high-melting point tungsten or molybdenum, which can be sintered together at the same time.
Japanese Murata puts forward low temperature co-fired ceramic (LTCC), which finds few applications. Ceramic substrates are mostly supplied by Japanese KYOCERA and U.S. Rogers. PCBs used by European and U.S. carmakers are largely provided by German Schweizer, Duwel, and Wurth, and U.S. TTM. Japanese carmakers are mainly served by CMK and Meiko.
Automotive safety systems, especially ABS, generally adopt MCPCB (Metal Core PCB). Automotive ADAS needs to use a large quantity of radar which finds shipment of 19 million sets in 2014 and is expected to reach 96 million sets in 2020. In this case, high-frequency PCB will be employed. The PCB usually needs PTFE ceramic and can only be done by the companies (mainly from U.S. Europe and Japan) that are very experienced in RF. xEV is developing rapidly, especially after the outbreak of scandal over VW cheating pollution emissions tests.
Supply of cockpit PCBs are almost taken on by Taiwanese companies. HDI may be needed, as Infotainment becomes more complicated and the size of screen larger. Moreover, the number of automotive displays used also increases, like BMW 7 series using up to 7 displays for each vehicle. All these factors fuel a robust market.
PC supply chain remains pessimistic about demand in 1H’16
Despite seeing growth in third quarter worldwide PC shipments, the PC supply chain is still conservative about demand from the fourth quarter to the first half of 2016 as most PC demand in the fourth quarter comes from price-cut promotions with the only exception being Apple's Mac-series products.
Worldwide Security Appliance Vendor Revenues increased 9.6% y/y to $2.7 billion in 3Q’15 and Shipments grew 9.7% y/y to 585,282 units (Charts 15 & 16)
According to the International Data Corporation (IDC) the total security appliance market showed positive growth in both vendor revenue and unit shipments for the third quarter of 2015 (3Q’15). Worldwide vendor revenues increased 9.6% year-over-year to $2.7 billion, and shipments grew 9.7% year-over-year to a total of 585,282 units. The sub-market with the strongest year-over-year growth was Unified Threat Management (UTM) with a 17.8% increase in revenues. The Firewall, Intrusion Detection and Prevention, and Content Management sub-markets also continued on a growth trajectory with 6.7%, 6.6% and 1.3% year-over-year growth respectively. The Virtual Private Network (VPN) sub-market was the only one showing a year-over-year decline (-16.3%).
"Security products remain a growing industry as threats continue to plague companies. Over the past year the threat landscape has increased, leading to growth globally as no country is free from attacks," said Elizabeth Corr, Research Analyst, Security Products at IDC. “This growth is reflected in the top 5 vendors growing a combined 9.4% year-over-year."