Weekly Global Update for January 7, 2016

North American PCB Shipments increased 0.4% y/y and Bookings rose 7.9% in November 2015; Book/Bill slipped to 0.98 (Charts 1-5)

IPC announced the November findings from its monthly North American Printed Circuit Board Statistical Program. Slow sales growth continued in November and bookings bounced back, but the book-to-bill ratio slipped below parity to 0.98.

Total North American PCB shipments increased 0.4% in November 2015 compared to November 2014. Year-to-date shipment growth remained at 0.4%. Compared to the previous month, PCB shipments were down 5.8%.

PCB bookings rose 7.9% compared to November 2014, strengthening year-to-date order growth to 2.6%. Orders were up 1.0% in November compared to the previous month.

“Order growth recovered in November for the North American PCB industry, but negative order growth in the preceding two months pulled the book-to-bill ratio below parity for the first time in 14 months,” said Sharon Starr, IPC’s director of market research. “Strong order growth in late 2014 and in many months of 2015 have kept sales growing, although at a very slow pace,” she added.

Source: www.ipc.org

Global and Japanese Electronics and Information Technology Industry Production Forecasts (Charts 6-8)

Production by the global electronics and IT industries is expected to have risen 13% year on year, to ¥318,087 billion in 2015, mainly reflecting the expansion of smartphones and flat televisions and an unexpectedly large positive effect of exchange rates. In 2016, global production is forecast to grow for a fifth straight year, rising 3%, to ¥327,289.8 billion, backed by the expected expansion of devices connecting with the Internet, such as smartphones, toward the CPS/IoT society and the growth of electronic components and devices that respond to demand related to the progress of IT in automobiles and IT solution services for the creation of new value.

In 2015, the world economy continued a sustainable trend of moderate recovery, mainly in developed countries. In the U.S. economy in particular, improvements in employment, consumption and housing investment were noticeable, and capital investment was also recovering. In emerging countries, however, growth slowed due to a deceleration in the Chinese economy and falling resource prices. In this environment, solid increases were seen in the production of smartphones – which benefited from progress in multiband and energy-saving associated with the spread of the high-speed wireless communication network –
and flat televisions with larger screen sizes and higher added value. In addition, movements in exchange rates produced an unexpectedly large positive result. In this situation, total global production by the electronics and IT industries (total of electronics industry and IT solutions and services) in 2015 is expected to climb 13% year on year, to ¥318,087 billion. Of this total, production by the electronics industry (hardware, including electronic equipment, components and devices) is seen rising 14%, to ¥234,582.7 billion, increasing for the fourth straight year.

In 2016, the world economy is expected to see sustainable growth in the U.S. and European economies, taking advantage of low oil prices, and rising consumption and infrastructure development in India and Southeast Asia, among other regions, despite some concerns such as the slower growth rate in emerging countries. In Japan, growth is also anticipated, given higher consumption and an increase in capital investment driven by higher corporate earnings. In the electronics and IT industries, the expansion of devices connected to the Internet, such as smartphones, towards the CPS/IoT society is expected, and the progress of IT in automobiles will also lead to an increase in the number of vehicle-mounted electronic components and semiconductors. In addition, since demand for IT solution services will increase as a result of progress in efforts to create new value in wide-ranging areas in anticipation of the advent of the CPS/IoT society, production by the global electronics and IT industries is expected to achieve a fifth straight year of growth in 2016, rising 3%.

Source: Japan Electronics and Information Technology Association (JEITA)

4Q’15 iPhone Shipments to be 5-10% Short of Original Expectations, say Taiwan Makers

As demand for iPhone 6s and iPhone 6s Plus appear to have slowed down recently, shipments of iPhone devices from production lines in the fourth quarter of 2015 are likely to be 5-10% lower than originally expected, according to Taiwan-based supply chain makers.

The lowered factory shipments are in line with the latest forecasts of iPhone shipments in the consumer-end market, said the sources, adding that most market research firms have lowered overall iPhone device shipment estimates for the fourth quarter of 2015 to 72-75 million units, compared to 76-78 million units predicted earlier, indicated the sources.

Furthermore, overall iPhone shipments for the first quarter of 2016 have also been lowered to 52-56 million units from the previous estimate of 58-60 million units. The revised figures also represent a decline of 12-15% as compared to a year earlier.

Facing declining demand, some makers in the iPhone supply chain have reduced overtime shifts since November and could move the Lunar New Year holidays ahead of schedule, indicated the sources.

Foxconn Electronics' iPhone manufacturing plant in Zhengzhou, China has been indicated as one of the plants which are likely to shift their Lunar New Year holiday schedule, said the sources.

However, Foxconn said that operations at its Zhengzhou plant remain normal and it will implement the holiday schedule in accordance with related regulations as well as the willingness of its workers.

Source: www.digitimes.com

Chipset Vendors Growing Interests in Commercial Drone Market

More chipset vendors have become more serious about the development of the commercial drone market and have come out with related IC parts targeting the emerging market, according to Digitimes Research.

Qualcomm has introduced its Qualcomm Snapdragon Flight platform for consumer drones and robotics applications. The Snapdragon Flight, which is based on a Qualcomm Snapdragon 801 processor, features 4K high resolution camera support, image enhancement and video processing capabilities.

Nvidia has also launched two chipset modules, the Tegra X1and Jetson TX1, for consumer drone products. The two chipset modules feature strong graphics computing capability which can enhance the visual recognition applications of drones, Digitimes Research noted.

Both Qualcomm's and Nvidia's chipset platforms have been adopted by commercial drone makers. The difference is that the Qualcomm Snapdragon Flight solutions are being used as main controlling systems for high-end drones, while Nvidia's platforms are chosen as affixation systems, said Digitimes Research.

Source: www.digitimes.com

Worldwide Desktop Shipments Declined 15% y/y in 2015 and are expected to Fall Another 7% y/y in 2016

Although worldwide desktop shipments are expected to drop up to 15% on year in 2015, the volume in 2016 is only expected to decline less than 7% in 2016 thanks to increasing demand for high-end gaming, professional workstation and embedded-related products, while mini PCs are also expected to see stable demand, according to sources from the upstream supply chain.

Despite the releases of Intel's Skylake processors and Microsoft's Windows10 in the second half of 2015, the weak global economy and weaker-than-expected demand from emerging markets such as China continue to impact the worldwide PC market especially the desktop segment.

Worldwide mini PC shipments will surpass six million units in 2015 and are expected to be over eight million units in 2016. Worldwide all-in-one PC shipments are also expected to rise as demand from China's Internet cafes gradually recovers.

Intel will continue its cooperation with upstream supply partners and will provide more reference design to help reduce partners' costs. Although Intel is seeing its desktop CPU shipments dropping from a year ago, most of the shipment drops are from entry-level product lines, while its mainstream Core processor shipments had flat performance from a year ago. Intel's high-end and top-end K-series shipments will grow 15% on year.

With vendors such as Lenovo, Dell and Hewlett-Packard (HP) turning their focuses to niche product lines, the sources expect the vendors to see lower declines in 2016, while Gigabyte Technology and Asustek Computer, which have already been operating in these segments for a while, will maintain stable performances.

Source: www.digitimes.com

Global Thin and Terminal Client Market Declined 6.7% y/y in 3Q’15 (Chart 9)

The global thin and terminal client market deteriorated during the third quarter of 2015 (3Q’15), declining 6.7% year over year, according to the International Data Corporation (IDC ) Worldwide Quarterly Enterprise Client Device Tracker . Shipments continued to be hampered by strong deployments in 2014, but also ongoing economic and currency pressures in key parts of the market.

Combined with some persistent factors that have negatively affected the market, including budget constraints that delayed major shipments in Asia/Pacific, the emerging markets continued to lag behind mature markets in terms of shipments and projected growth rates going forward.

Furthermore, although the market is increasingly accepting of virtualized client computing, devices such as repurposed PCs and even Chromebooks in some cases, pose viable threats to mainstream thin client purchases.

In light of these challenges, IDC expects 2015 shipments to be more subdued than previously forecast, reaching just 5.1 million units for the year, a drop of more than 6% compared to 2014. IDC expects shipments to return to steady growth from 2016 through 2019, reaching 6.4 million units in 2019.

"Shipments in 2015 are expected to decline more than 6% year over year," said Jay Chou, Research Manager, IDC Worldwide PC and Enterprise Client Device Tracker. "Beyond 2016, we remain optimistic that growth rates will pick up as another cycle of business refresh should fuel renewed growth."

Source: www.idc.com

Exchange rates

Here are current exchange rates vs. the U.S. dollar.

• Trade-Weighted exchange value of U.S. Dollar vs. a broad group of currencies; dollar was 12.5% stronger in 2015 vs. 2014 (Chart 10)
• Euro was 15.4% weaker vs. dollar in 2015 vs. 2014 (Chart 11)
• Canadian dollar was 13.6% weaker vs. U.S. dollar in 2015 (Chart 12)
• Mexico peso was 16.1% weaker (Chart 13)
• Japanese yen was 12.5% weaker (Chart 14)
• China yuan was 2% weaker (Chart 15)
• Taiwan NT$ was 4.5% weaker (Chart 16)
• S. Korean won was 7% weaker (Chart 17)
• Indian rupee was 4.8% weaker (Chart 18)

Source: http://research.stlouisfed.org/fred2/series/

Metal prices

Current metal prices (all down in 2015):

• Copper (Chart 19)
• Tin (Chart 20)
• Silver (Chart 21)
• Gold (Chart 22)

Sources noted on charts