Taiwan/China Electronics, Currency Exchange & 2Q'11 Global Supply Chain Updates; Mobile Device & DRAM Markets

08.17.2011 // Posted by: Walt Custer // Posted in: Articles, Industry Conditions

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2Q’11 Global Supply Chain Growth by Sector

With most of the companies in our sector composites now reporting, Chart 1 details growth by product group for the global electronic supply chain. We’ll continue to update this chart in future weeks as the balance of the companies report.

Taiwan/China Electronics Production Flat in July vs. June

With the exception of a few product groups July revenues for Taiwan-listed electronics companies (often with manufacturing in China) were sequentially flat from June to July 2011.

Here are some details:

• OEM sales were little changed (Chart 2), so were the ODMs (Chart 3)

Chart 2



Chart 3


• Motherboard shipments had a surprising rebound (Chart 4)

Chart 4


• Display shipments were flat (Chart 5)

Chart 5


• Shipments of semiconductors to Asia are now in balance with electronic equipment growth. However in both cases the 3-month (3/12) growth rates are near zero (Chart 6).

Chart 6


• Package & Test sales were up (Chart 7) but memory shipments continued to soften (Chart 8).

Chart 7



Chart 8


• Wafer foundry demand slumped (Chart 9). Historically a composite of Taiwan-listed chip foundry sales have been a leading indicator for global semiconductor shipments (Chart 10). JPMorgan’s global PMI is also a good leading indicator for world chip shipments. The 3/12 growth of both the world PMI and Taiwan foundry shipments suggest that world semiconductor sales growth will decline in July and August (Chart 11).

Chart 9



Chart 10



Chart 11


• Passive component sales were flat (Chart 12).

Chart 12


• Taiwan-listed solar/photovoltaic companies recovered slightly from an awful second quarter (Chart 13). However based on a geographically broader company composite (Chart 14), the massive 2Q’11 photovoltaic decline seems to have been centered in Taiwan-listed companies.

Chart 13



Chart 14


• Taiwan based PCB makers saw a slight July sales increase, as did CCL (laminate) producers (Chart 15).

Chart 15

Forex Update: Dollar Weak vs. Many Trading Partners’ Currencies

The trade weighted value of the US dollar continues to weaken (Chart 16). It has been relatively flat vs. the euro (Chart 17) but it has declined significantly relative to the Japanese yen (Chart 18) and Chinese yuan (Chart 19). Exporters from Japan to the USA are facing an especially unfavorable exchange rate and China’s costs continue to climb. Other currencies’ performances compared to the dollar are shown in Chart 20 (Canada), Chart 21 (Taiwan), Chart 22 (S. Korea), Chart 23 (India) and Chart 24 (Brazil).

Mobile Devices Grew 16.5% Year-on-Year in 2Q’11; Smartphone Sales Grew 74% - Gartner

Worldwide sales of mobile devices to end users totaled 428.7 million units in the second quarter of 2011, a 16.5% increase from the second quarter of 2010, according to Gartner, Inc. (Chart 25).

The channel built up stock at the end of the first quarter of 2011 in preparation of possible component shortages following the Japanese earthquake. As a result, sell-in demand slowed in the second quarter of 2011 to 421.1 million units, a 4.4% decrease from the previous quarter.
Sales of smartphones were up 74% year-on-year and accounted for 25% of overall sales in the second quarter of 2011 (Chart 26), up from 17% in the second quarter of 2010.

“Smartphone sales continued to rise at the expense of feature phones,” said Roberta Cozza, principal research analyst at Gartner. “Consumers in mature markets are choosing entry-level and midrange Android smartphones over feature phones, partly due to carriers’ and manufacturers’ promotions." However, replacement sales in Western Europe showed signs of fatigue as smartphone sales declined quarter-on-quarter.

Google and Apple are the obvious winners in the smartphone ecosystem (Chart 27). The combined share of iOS and Android in the smartphone operating system (OS) market doubled to nearly 62% in the second quarter of 2011, up from just over 31% in the corresponding period of 2010.

“We expect manufacturers and distributors to remain cautious about raising their stock levels in the second half of 2011, following the recent uncertainty on the world financial markets,” said Annette Zimmermann, principal research analyst at Gartner. Gartner expects sales of mobile devices to grow around 12% in 2011.

Source: www.gartner.com

Global DRAM Industry Revenue in 2Q’11 was US$8.1 billion; Samsung had 40% Market Share, Total Revenue Decreased 1.9%

(Charts 28) (Chart 29) (Chart 30)

According to DRAMeXchange, a research division of TrendForce, total revenue for the global DRAM industry in 2Q’11 was approximately US$8.1 billion. Although DRAM ASP (average selling price) increased slightly due to expectations of supply disruption from the Japan earthquake, ProMOS’s decrease in wafer start volume and Powerchip’s increase of non-DRAM products caused overall revenue to decrease slightly, 1.9% from 1Q’11.

Source: www.dramexchange.com

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