07/20/2016 //
June’s consolidated revenues were just released for Taiwan-listed companies, many of which manufacture in China:
Custer Consulting Group’s PCB leading indicator points to a modest printed circuit board revenue increase ahead (in additional to normal seasonality (Chart 14).
Source: Company Revenues analyzed by Custer Consulting Group
Although still positive, European growth has slowed based upon the most recent (May 2016) data available. Most sectors are still positive (3/12 & 12/12 greater than 100 in Chart 15) but the “leading” 3-month (3/12) growth rates are below the annualized (12/12) values. Some exceptions exist however - wiring devices, loaded electronic boards, etc.
Source: Eurostat data analyzed by Custer Consulting Group
Chip Equipment Spending SEMI Forecasts: Flat 2016, Rebound in 2017
SEMI projects that the worldwide semiconductor equipment market will be flat this year and will rebound in 2017. SEMI forecasts that the total semiconductor equipment market will grow 1% in 2016 (reaching $36.9 billion) after contracting 3% in 2015. An increase of 11% is expected in 2017 for the market to reach $41.1 billion.
Equipment spending had a slow start in the beginning of the year and is expected to accelerate in the second half of the year. Spending growth will continue into 2017 driven by foundries, memory (both 3D NAND and DRAM), MPU, Power, and investments in China. Front-end wafer processing equipment is forecast to grow 2% in 2016 to total $29.3 billion, up from $28.8 billion in 2015. The Test equipment segment is expected to total $3.4 billion, essentially flat when compared to last year. Assembly and packaging equipment and Other Front End equipment are forecast to contract this year, falling to $2.4 billion (-5%) and $1.9 billion (-2%), respectively.
“After a tepid 2015, device manufacturers are beginning to ramp their investments in key industry segments,” said Denny McGuirk, president and CEO of SEMI. “We expect capital spending to improve for the remainder of 2016 and into 2017.”
Taiwan is forecast to continue as the world’s largest spender with $9.5 billion estimated for 2016 and $10.0 billion for 2017. In 2016, China is projected to be the second largest spender at $6.4 billion, followed by Korea at $6.2 billion. For 2017, Taiwan is projected to maintain its leading position while the market in Korea will nudge past the market in China.
In 2016, year-over-year increases are expected to be largest for Rest of World (59%), China (31%), and Europe (6%). Projected year-over-year percentage increases for 2017 are forecast to be largest for Korea (30% increase), Europe (19%), Rest of World (18%) and China (13%).
Source: www.semi.org
Worldwide PC shipments totaled 64.3 million units in the second quarter of 2016, a 5.2% decline from the second quarter of 2015, according to preliminary results by Gartner, Inc. This was the seventh consecutive quarter of PC shipment declines, but Gartner analysts said the market is showing some signs of improvement.
“One of the ongoing problems in the PC market has been the price hike in selected regions due to the weakening local currency against the U.S. dollar,” said Mikako Kitagawa, principal analyst at Gartner. “The price issue has impacted the EMEA and Latin America regions for the past year. However, PC shipment declines became rather modest in the second quarter compared with previous quarters, which suggests a fading currency impact”
“All regions except North America experienced a PC shipment decline. The Latin America region was still very weak largely because of political and economic instability. PC shipments in Latin America are expected to fall below 5 million units for the second quarter of 2016, which is a decline of more than 20% from the second quarter of 2015. These shipment results would be some of the lowest in the history of the Latin America PC industry.”
While the U.K.'s vote to exit the European Union did not have a major impact in the worldwide PC results in the second quarter of 2016, Gartner analysts said Brexit could potentially create uncertainty, not only in currency, but also the entire economy beyond Europe.
Lenovo maintained the No. 1 position in worldwide PC shipments in the second quarter of 2016, despite a 2.2% decline in units from the same period last year. This was the fifth consecutive quarter of global PC shipment declines for Lenovo. The company experienced double-digit growth in the U.S. mobile PC market, but EMEA continued to be a challenge due to inventory build during the quarter. In Asia/Pacific, Lenovo's shipments declined, but the decline was less than the overall average in the region.
Notes: Data includes desk-based PCs, notebook PCs and ultramobile premiums, but not Chromebooks or iPads. All data is estimated based on a preliminary study. Final estimates will be subject to change. The statistics are based on shipments selling into channels.
“While vendors and channels generally have more optimistic expectations of PC sales compared with the past, there is still a chance to have a potential inventory built. This will depend on how PC market demand picks up in the second half of this year for both the business and consumer segments,” Kitagawa said. “The second and third quarter is typically the PC buying season for the U.S. public sectors. Positive second-quarter results could suggest healthy PC sales activities among the public sectors. There is an opportunity for a Windows 10 refresh among businesses, which we expect to see more toward the end of 2016 to the beginning of 2017.”
Asia/Pacific PC shipments totaled 22.7 million units in the second quarter of 2016, a 6.3% decline from the second quarter of 2015. With a stagnant economy in the region, it put pressure on discretionary spending, and smartphones ranked as a higher priority to purchase than PCs. There were election activities in Australia, the Philippines and South Korea, which created a lull in IT spending from the government sector. PC shipments in China declined 6.4%. Business confidence is weak in China, and this affects consumer buying patterns. PC shipments in EMEA totaled 17.8 million units in the second quarter of 2016, a decline of 4.3% year over year. The impact of the euro depreciation, and resulting price increases, ended with Western Europe showing a low-single-digit decline. Brexit had no impact in the second quarter beyond the steadily weaker pound since the referendum was announced in 2015. However, post-Brexit sterling was sharply weaker against the dollar, and this will cause price increases that will likely cause downward pressure on fourth-quarter sales in the U.K. These results are preliminary. Final statistics will be available soon to clients of Gartner's PC Quarterly Statistics Worldwide by Region program. This program offers a comprehensive and timely picture of the worldwide PC market, allowing product planning, distribution, marketing and sales organizations to keep abreast of key issues and their future implications around the globe.
Source: www.gartner.com
Cellphone IC market CAGR to exceed total IC market CAGR by 3.0 points through forecast.
The increasing value of the average IC content in cellular handsets along with the increasing percentage of smartphones sold as a percent of total cellular handsets will help drive the cellphone IC market to $94.3 billion in 2019. Strong double-digit growth rates in the cellular handset IC market were logged in 2013 and 2014 but only a 2% increase was registered in 2015. Despite the expected increase of 4% in 2016, the 2015-2019 total cellphone IC market CAGR is forecast to be 6.7%, 3.0 points higher than the 3.7% CAGR forecast for the total IC market during this same time. The $94.3 billion 2019 cellphone IC market is forecast to be about 30% higher than the level registered in 2015.
In 2015, the IC product segment that had the highest average content per cellphone was the MPU category ($9.92), which includes the application processors used in smartphones. The second highest was the application specific logic segment, which had an average $8.55 of IC content per cellular handset. In total, there was an average of $38.78 worth of ICs in a 2015 cellular handset.
DRAM memory held 59% ($12.3 billion) of the total cellphone memory market in 2015, with NAND flash representing most of the remainder of the market. The $21.0 billion cellphone memory market in 2015 was driven by the surge in shipments of memory-rich high-end smartphones and the 6% increase in the cellphone DRAM market.
The average analog content in a cellphone increased in 2015 to $6.64 while the total cellphone analog IC market increased by 8%, six points better than the 2% growth rate experienced by the total 2015 analog IC market. Application specific analog, mostly comprised of mixed-signal devices, represented about 83% of the total $12.5 billion 2015 cellular handset analog IC market.
In 2019, as the market shifts more toward low-end smartphones, the cellphone MPU market is expected to represent 23% of the total cellphone IC market, down two points from 26% in 2015. Moreover, the cellphone DRAM memory market in 2019 is forecast to reach $19.9 billion and be more than 2x larger than the total flash cellphone IC market ($9.5 billion) in that year. In contrast to the high-growth cellphone DRAM market, the 2019 cellphone DSP market is forecast to be less than $0.1 billion, down from $1.3 billion in 2012.
Source: www.semiconductors.org
www.icinsights.com
Manufacturing in the U.S. in June had the strongest growth since January, a sign that domestic demand is improving.
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.