12/21/2016 //
Markit Economics, “Flash” PMI leading indicators were released earlier than usual this month - ahead of the holidays:
Source: www.markiteconomics.com
Eurostat recently released Eurozone production indices for October:
Source: Eurostat with Custer Consulting Group analysis
November monthly sales have been released by Taiwan listed electronics companies, many of which manufacture in China:
Source: Composite financial reports of Taiwan listed companies with Custer Consulting Group analysis
Custer Consulting Group’s global PCB shipment model points to a sharp seasonal downturn beginning in December (Chart 23), but with the leading indicator suggesting modest growth ahead on a seasonally adjusted basis (Chart 24).
North America-based manufacturers of semiconductor equipment posted $1.55 billion in orders worldwide in November 2016 (3-month average basis) and a book-to-bill ratio of 0.96, according to SEMI.
November 2016 bookings were 4.0% higher than October 2016 and 25.1% higher than November 2015.
The 3-month average of worldwide billings in November 2016 was $1.61 billion, 1.1% lower than October 2016 and 25.2% higher than November 2015.
“As 2016 comes towards a close, equipment spending is stronger than expected at the start of the year," said Dan Tracy, senior director, SEMI. "Spending has been driven by 3D NAND, leading-edge foundry, and advanced packaging investments, and these segments are key for the expected spending growth in 2017."
Source: www.semi.org
Worldwide sales of new semiconductor manufacturing equipment are projected to increase 8.7% to $39.7 billion in 2016, according to the SEMI’s Year-end Forecast, released at the annual SEMICON Japan exposition. In 2017, another 9.3% growth is expected, resulting in a global semiconductor equipment market totaling $43.4 billion.
The SEMI Year-end Forecast predicts that wafer processing equipment, the largest product segment by dollar value, is anticipated to increase 8.2% in 2016 to total $31.2 billion. The assembly and packaging equipment segment is projected to grow by 14.6% to $2.9 billion in 2016 while semiconductor test equipment is forecast to increase by 16.0%, to a total of $3.9 billion this year.
For 2016, Taiwan and South Korea are projected to remain the largest spending regions, with China joining the top three for the first time. Rest of World (essentially Southeast Asia), will lead in growth with 87.7%, followed by China at 36.6% and Taiwan at 16.8%.
SEMI forecasts that in 2017, equipment sales in Europe will climb the most, 51.7%, to a total of $2.8 billion, following a 10.0% contraction in 2016. In 2017, Taiwan, Korea and China are forecast to remain the top three markets, with Taiwan maintaining the top spot even with a 9.2% decline to total $10.2 billion. Equipment sales to Korea are forecast at $9.7 billion, while equipment sales to China are expected to reach $7.0 billion.
Source: www.semi.org
SIPRI’s Top 100 totaled $370.7 billion in 2015 according to new data on the international arms industry released from SIPRI.
The sales of arms and military services companies in the SIPRI Top 100 have fallen for the fifth consecutive year. However, at only a 0.6% decline, the slight decrease may signal a possible reversal of the downward sales trend observed since 2011.
US companies still way ahead despite falling revenues
Companies based in the United States continue to dominate the Top 100 with total arms sales amounting to $209.7 billion for 2015. Arms sales by US companies in the Top 100 decreased by 2.9% compared with 2014—the fifth consecutive year of decline.
"Lockheed Martin remains the largest arms producer in the world," says Aude Fleurant, Director of SIPRI’s Arms and Military Expenditure Programme. "However, US companies’ arms sales are constrained by caps on US military spending, delays in deliveries of major weapon systems and the strength of the US dollar, which has negatively affected export sales."
Many of the larger US arms-producing companies divested their military services activities after 2010 due to falling demand. A number of the new, smaller companies created by this process have consolidated and have built up sufficient revenue to rank in the Top 100 for 2015; three such companies are CSRA, Engility and Pacific Architects and Engineers.
West European arms sales up in 2015 after falls in 2014
Arms sales by companies in Western Europe listed in the SIPRI Top 100 for 2015 rose by 6.6% in real terms compared with 2014, with total combined revenues from arms sales amounting to $95.7 billion. This increase contrasts with the notable drop in West European companies’ revenues from arms sales recorded between 2013 and 2014.
The combined arms sales of the six French companies listed in the Top 100 totaled $21.4 billion in 2015, a rise of 13.1% compared with 2014, when most of those companies recorded a fall in arms sales. The increase in French companies’ arms sales has acted as an important driver for the recent growth in arms sales in Western Europe.
"Major arms export deals in 2015, such as those to Egypt and Qatar, have increased French arms companies’ sales," says Fleurant. "A 67.5% surge in arms sales by Dassault Aviation Group seems to be mainly the result of such exports."
The three German companies listed in the Top 100 continued to increase their combined sales (by 7.4%) in 2015. Companies in the Top 100 based in the United Kingdom reversed the downward trend recorded in 2014 with a 2.8% rise in their combined arms sales in 2015.
Continued growth in sales by the Russian arms industry
The combined arms sales of the 11 Russian companies in the 2015 Top 100 reached $30.1 billion, representing 8.1% of the total Top 100 arms sales for 2015 and an increase of 6.2% compared with 2014. Ten out of the 11 companies listed have increased their arms sales in 2015.
"Profiting from the Russian military modernization programme, most of the top Russian companies have increased their arms sales in constant roubles," says SIPRI Senior Researcher Siemon Wezeman. "However, all Russian companies in the SIPRI Top 100 for 2015 are ranked lower than they were in 2014 because the pace of the growth in their arms sales has slowed."
South Korea leading the rise of emerging producers in the Top 100
Emerging producers and other established producers account for 9.5% of the Top 100 arms sales for 2015 with a combined total of $34.5 billion.* This represents an increase of 3.0% for other established producers compared with 2014 and a rise of 15.9% for emerging producers. The significant growth in emerging producers’ arms sales is mostly attributable to South Korean companies, which increased sales by 31.7% in 2015.
"All South Korean companies show higher arms sales in 2015, reflecting their growing capacity to meet the South Korean Ministry of Defense’s demand and their ongoing success in the international market," says Wezeman. "LIG Nex1 increased its arms sales by 34.7% compared with 2014, and Korea Aerospace Industry’s arms sales rose by 51.7%." Poongsan (an ammunition and propellant producer), DSME (a shipbuilder) and Hanwha Thales (a weapon systems producer) were new South Korean entrants to the Top 100 in 2015.
National efforts among the emerging producers to develop their arms industries have shown mixed results in 2015. The combined arms sales of India’s ranked companies grew by 9.3% compared with 2014, while the combined sales of Turkish companies rose by 10.2%. Embraer, the sole Brazilian company in the Top 100, recorded a 28.1% decline in its arms sales in 2015.
The SIPRI Arms Industry Database
The SIPRI Arms Industry Database was created in 1989. It contains financial and employment data on arms-producing companies worldwide. Since 1990, SIPRI has published data on the arms sales and employment of the 100 largest of these arms-producing companies in the SIPRI Yearbook.
"Arms sales" are defined by SIPRI as sales of military goods and services to military customers, including sales for domestic procurement and sales for export. Changes are calculated in real terms and country comparisons are only for the same companies over different years.
* The "emerging producers" category covers companies located in Brazil, India, South Korea and Turkey. The "other established producers" category covers companies located in Australia, Israel, Japan, Poland, Singapore and Ukraine.
Source: www.sipri.org
The worldwide top-5 notebook brand vendors' combined shipments grew 8% on month in November, while the top-3 ODMs' notebook shipments increased 10% thanks to rising sales from North America during Black Friday and Cyber Monday promotions. Demand for Apple's new MacBook products has also been rising and contributed to the top-3 ODMs' combined shipments.
Among the top-5 brand vendors, Hewlett-Packard (HP) and Asustek Computer had better performances than the others in November. HP's shipments in the month grew strongly, reaching the second highest level so far in 2016. The growth also further extended the US-based vendor's shipment gap with the second-largest Lenovo to around one million units, according to Digitimes Research.
Asustek enjoyed strong shipments in its mainstream and key notebooks in November, giving it a rebound from the downturn in October to achieve 40% on-month growth. The company's November shipments have been the highest in 2016 so far.
As for the top-3 ODMs, Quanta achieved the best performance with an on-month shipment growth of over 30% since the company is the sole supplier of Apple's MacBook Pro products in 2016. Its orders from HP and Asustek also increased from a month ago.
Quanta also returned as the largest ODM in November, surpassing last month's leader Compal Electronics.
Top-4 to -5 ODMs Inventec and Pegatron Technology also saw their shipments grow more than 15% on month in November due to increased orders placed by HP and Asustek.
Source: www.digitimes.com
U.S. industrial production (Chart 31) fell 0.4% in November, a bigger drop than anticipated due to a decline in both utility output and weaker manufacturing.
Chart 32 shows recent industrial production growth for key countries.
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.