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Weekly Global Update for March 26, 2014

03.26.2014 // Walt D. Custer // Industry Conditions

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North American Semiconductor Equipment Industry Posts February 2014 Book-to-Bill Ratio of 1.00 ($1.29 billion in both bookings and billings)

North America-based manufacturers of semiconductor equipment posted $1.29 billion in orders worldwide in February 2014 (3-month average basis) and a book-to-bill ratio of 1.00, according to SEMI.

The 3-month average of worldwide bookings in February 2014 was $1.29 billion, 0.7% higher than the final January 2014 and 20.1% higher than February 2013. The 3-month average of worldwide billings in February 2014 was $1.29 billion, 4.5% higher than January 2014 and 32.2% higher than the February 2013.

“Equipment bookings and billings continue along a steady trend in the first quarter,” said Denny McGuirk, president and CEO of SEMI. "The book-to-bill ratio remains at or above parity for the fifth consecutive month, and the booking and billing values remain well above the figures reported one year ago."

Source: www.semi.org

Three Companies to Account for 52% of Semiconductor CapEx in 2014

  • Samsung, Intel, TSMC with largest budgets
  • SanDisk and Micron with biggest increases

IC Insights' soon-to-be-released March Update to the 2014 McClean Report provides a forecast ranking of the top 25 semiconductor capital spenders for 2014.

A preview of the top 10 spenders is shown in Chart 3. Samsung and Intel are forecast to spend at least $11.0 billion this year and TSMC slightly less than $10.0 billion. Collectively the three companies are forecast to account for 51.8% of total semiconductor industry capex this year.

As amazing as that number is, it is a decrease from the 55.5% share these three companies held in 2013. Among the top 10, six companies are forecast to spend at least $3.0 billion in 2014, and nine suppliers are forecast to spend more than $1.0 billion. After keeping their combined spending essentially flat in 2013, the top 10 spenders are forecast to boost capex spending by 10% in 2014.

Source: www.ICInsights.com

RFID market will grow from $7.88 billion in 2013 to $9.2 billion in 2014 - IDTechEx

IDTechEx reported that the RFID market - including tags, readers, software and services, for passive and active RFID - will grow from $7.88 billion in 2013 to $9.2 billion in 2014. Most growth is due to active RFID/RTLS systems, interrogators, and then tags, in terms of total money spent.

Passive UHF tags see rapid growth, from a total of just over three billion tags in 2013 to 3.9 billion tags in 2014. IDTechEx find that 2.48 billion passive HF tags will be sold in 2014, although at a much higher average sales price than passive UHF tags, so the money spent on HF tags will be almost ten times more. The highest volume sector for passive UHF systems is retail apparel, which still has some way to go with RFID penetrating only about 7% of the total addressable market for apparel in 2014.

After extensive interviews with suppliers, IDTechEx find that there are now emerging or established leaders in most positions of the value chain across the different technologies - yet still very few companies have sales of more than $100 million.

IDTechEx expect that the RFID market will reach $30.2 billion in 2024.

Source: www.IDTechEx.com

Copper Drops to Lowest Since July 2010 on Chinese Demand Concern

Copper price hit a 44-month low following the collapse of a large real-estate developer in China (world's largest copper consumer). Worries of defaults by indebted Chinese companies caused concerns that their defaults could erode metals demand.

Global 4K TV shipments 1.6 Million Units in 2013; nearly One Million Units Shipped in Q4'13

4K LCD TV shipments reached 1.6 million units in 2013, with nearly one million units alone shipped in Q4'13. According to NPD DisplaySearch growth was significantly driven by China, although shipments from countries outside of China more than doubled in Q4, as well. Chinese brands comprised 84% of global 4K TV shipments in 2013 and 80% of 4K TV shipments in Q4.

“4K TV remains on an aggressive growth trajectory, but the expectations of the supply chain are extremely high, relative to observed market performance and current retail pricing levels so far,” said Paul Gagnon, director of global TV research for NPD DisplaySearch. “With panel price premiums falling rapidly, and a growing chorus of non-Chinese brands pushing 4K, it is possible for retail set prices to fall quickly to improve volume, but at the expense of profits.”

Source: www.displaysearch.com

Worldwide PC Monitor Shipments Fell 0.4% q/q to 34.9 Million Units in 4Q'13

Total worldwide PC monitor shipments were slightly below 35.0 million units in the fourth quarter of 2013, a decrease of 0.4% compared to the previous quarter yet 2.9% more than forecast, according to the International Data Corporation. The -3.8% year-over-year growth in 4Q'13 was largely due to declining PC desktop sales.

Looking ahead to the first quarter of 2014, IDC is forecasting a quarter-over-quarter decline of 9.0% in worldwide shipments to 31.7 million units. However, IDC slightly raised its total shipment forecast for the full year 2014 from 125.2 million units to 125.6 million units, which represents a decline of -8.6% compared to 2013. By 2018, worldwide shipments are expected to drop further to 104.8 million units, as the adoption of mobile devices at lower price points is

Worldwide External Controller-based Disk Storage Revenues Increased 5% y/y to US$6.3 Billion in 4Q'13

Worldwide external controller-based (ECB) disk storage vendor revenues totaled US$6.3 billion in the fourth quarter of 2013, a 5% increase from revenues of US$6 billion in the fourth quarter of 2012, according to Gartner.

"Following an abysmal third quarter, the fourth quarter of 2013 returned to growth. Driven by pent-up demand and the year-end budget flush phenomenon, the market overcame a fragile global economy and grew 5% over the same period in 2012." said Roger Cox, research Vice President at Gartner.

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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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