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Weekly Global Update for December 18, 2013

12.18.2013 // Walt D. Custer // Industry Conditions

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Global Electronic Shipments Reach Seasonal Peak

Global electronic equipment shipments reached an all-time high in November (Chart 1). They were up 4.8% versus November 2012 and up 7.6% sequentially from October 2013. This strong showing was a combination of real growth and a seasonal peak. It is very likely that shipments will weaken significantly in December and through the first quarter of 2014.

Component shipments reached their seasonal peak in October (a month earlier than electronic equipment). One example is printed circuit boards (Chart 2).

Source: Custer Consulting Group

Taiwan/China Strong November Performance

November sales for Taiwan-listed companies (many with manufacturing in China) were released last week.

  • Electronic equipment shipments rose 8.9% in November 2013 versus November 2012 (Chart 3).
  • ODM company sales grew 9.4% last month versus November 2012 (Chart 4) and motherboard shipments remained near their October high (Chart 5).
  • Display sales were flat (Chart 6).
  • Wafer foundry sales peaked in October and will likely decline through early 2014 (Chart 7). Since they are a leading indicator to semiconductors it is likely that chip shipments will also slow.
  • Package and test revenues continued to climb (Chart 8) but memory sales flattened (Chart 9) as did passive component (Chart 10) and solar/photovoltaic (Chart 11) revenues.
  • PCB sales peaked in October (Chart 12) as did CCL (PCB rigid laminate) (Chart 13).

Source: Financial reports of Taiwan Stock Exchange listed companies with Custer Consulting Group analysis

European Growth Minimal

Eurostat just released October European electronic equipment and component sales.

  • European supply chain growth is hovering near zero (Chart 14) although SEMI equipment shipments are declining at a slower pace.
  • Industrial production weakened for the EU 27 although the UK and France improved (Chart 15).
  • Electronic equipment shipments dropped in October (Chart 16) as both their annualized (12/12) and 3-month (3/12) growth rates are hovering near -3% (Chart 17).
  • Automotive shipment “corrected” from the September peak (Chart 18) while aerospace sales remained strong (Chart 19).
  • Instrument and control (Chart 20) and medical equipment (Chart 21) saw sales increases in October.
  • Loaded board (electronic assembly – Chart 22) and component and board (Chart 23) revenues declined in October.

Chart 24 summarizes the annualized (12/12) and 3-month (3/12) growth of the European electronic supply chain. The 3/12 “leads” the 12/12.

Source: Eurostat

3Q’13 Worldwide Semiconductor Equipment Billings $7.65 Billion (Chart 25)

SEMI reported that worldwide semiconductor manufacturing equipment billings reached US$ 7.65 billion in the third quarter of 2013. The billings figure is 1% higher than the second quarter of 2013 and 16% lower 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.

SEMI reports that worldwide semiconductor equipment bookings were $8.95 billion in the third quarter of 2013. The figure is 33% higher than the same quarter a year ago and 2% lower than the bookings figure for the second quarter of 2013.

Source: www.semi.org

Slight Decline in 3Q’13 Silicon Wafer Shipments (Chart 26)

Worldwide silicon wafer area shipments declined during the third quarter 2013 when compared to second quarter 2013 area shipments according to the SEMI Silicon Manufacturers Group (SMG) in its quarterly analysis of the silicon wafer industry.

Total silicon wafer area shipments were 2,341 million square inches during the most recent quarter, a 2.0% decrease from the 2,390 million square inches shipped during the previous quarter. New quarterly total area shipments are 2.0% lower than third quarter 2012 shipments.

"Total quarterly silicon shipment volumes declined in the most recent quarter when compared to the second quarter,” said Byungseop (Brad) Hong, chairman of SEMI SMG and director of Global Marketing at LG Siltron. “In spite of this recent decline, year-to-date silicon shipment volumes remain essentially flat when compared to the first nine months of 2012.”

All data cited in this release is inclusive of polished silicon wafers, including virgin test wafers, epitaxial silicon wafers, and non-polished silicon wafers shipped by the wafer manufacturers to the end-users.

Note the recent stronger growth of semiconductor $ versus wafer area indicating the increasing value of semiconductors per unit wafer area.

Source: www.semi.org
www.sia-online.org
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Statements of fact and or opinions expressed in MarketEYE by its contributors are the responsibility of the authors alone and do not imply an opinion of the officers or the representatives of TTI, Inc.

Featured Contributor:
Walt D. Custer

Walt Custer

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.

Custer Consulting Group

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