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Weekly Global Update for April 23, 2014

04.23.2014 // Walt D. Custer // Industry Conditions

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European Update

Eurostat just released the February European data for its electronic supply chain:

  • Electronic equipment sales rebounded to their highest levels since 2013 (Chart 1) as their 3/12 growth rate reached the “expansion” mode (Chart 2).
  • The entire European electronic supply chain is expanding (Chart 3).
  • Motor vehicle (Chart 4) and aerospace (Chart 5) shipments increased.
  • Instrument sales improved (Chart 6) but medical electronics device shipment declined (Chart 7).
  • Electronic assembly active declined slightly (Chart 8).
  • Component and board production jumped (Chart 9).
  • Wiring device shipments were flat in February (Chart 10) however they are growing above the long term trend line (Chart 11).
  • The European PMI leading indicator points to continued growth in its PCB production (Chart 12).

Charts 13 & 14 show 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

Taiwan Motherboard Makers Expected to see Motherboard Shipments in 2Q’14 Increase Significantly on Launch of New Models Supporting Intel's Haswell Refresh

Asustek Computer, Gigabyte Technology, Micro-Star International and ASRock, are expected to see their motherboard shipments in the second quarter of 2014 increase significantly on quarter mainly on the launch of new models supporting Intel's Haswell Refresh, according to Taiwan-based supply chain makers.

Source: www.digitimes.com

Worldwide Wearable Device Market to Grow from US$6 billion in 2014 to US$20.6 billion in 2018 (Chart 15)

The global market for wearable devices will grow substantially over the next four years as development is now focused on such devices, a report by the Institute for Information Industry said.

This year, the worldwide wearable device market is expected to reach US$6 billion and by 2018, is to climb to US$20.6 billion, the government-backed institute said in a research note released yesterday.

It said local companies should tap into the smart device market early, in light of Taiwan's strong information and communication technology sector, which would give the country an advantage.

The wearable device market is still in a nascent stage in terms of functions and services, the institute said.

It is "a new market extremely suitable for investment," it said.

Market researcher International Data Corp (IDC) made a similar prediction, saying that global shipments of wearable computing devices are expected to triple this year to more than 19 million units.

The growth will continue over the next few years at a compound annual rate of 78.4% to reach about 112 million units in 2018, IDC said.

The Industrial Technology Research Institute (ITRI) also said there was great potential in this market, especially for devices with healthcare functions and services aimed at the nation's aging society.

Global revenues from healthcare-related wearable devices reached US$860 million last year and are expected to rise over the next four years at a compound annual rate of 28.1%, to reach about US$3 billion in 2018, the ITRI said in a report.

Asia will be a front-runner, with an even higher compound annual growth rate of 33.9%, the institute said, citing a February forecast by BCC Research.

Such devices need to be small, light and low in energy consumption, the ITRI said, suggesting that developers use the data collected to provide better services and analyses to attract shoppers.

Source: The Taipei Times & www.idc.com

Taiwan-based PCB Makers' Production Capacity Utilization Rates of High-end HDI Boards to rise in 2Q’14 due to Strong Demand from Samsung Electronics, HTC and China-based Smartphone Vendors

The production capacity utilization rates of high-end HDI boards at Taiwan-based PCB makers are set to rise in the second quarter of 2014 due to strong demand from Samsung Electronics, HTC and China-based smartphone vendors, according to industry sources.

Compeq Manufacturing and Unimicron Technology are the two Taiwan-based PCB makers that have entered Samsung's supply chain, said the sources, noting that Compeq's HDI board lines are currently operating at over 80% of their capacity.

Although Compeq and Unimicron are not the major HDI board suppliers for Samsung, strong sales of the Galaxy S5 will ensure steady orders for the two firms, said the sources.

Compeq's new PCB plant in Chungqing will come online in the third quarter of 2014, but the plant's output to the company's total production will be limited, indicated the sources.

Unimicron plans to invest NT$100 million (US$3.31 million) for capacity expansion in 2014, but only 20-30% of the new investments will be used to ramp up HDI boards.

Source: www.digitimes.com

Worldwide Semiconductor Photomask Market to Grow from $3.1 billion in 2013 to $3.3 billion in 2015

SEMI reports that the worldwide semiconductor photomask market was $3.1 billion in 2013 and is forecasted to reach $3.3 billion in 2015. After contracting 3% in 2012 the photomask market increased 1% in 2013. The mask market is expected to grow 3% sequentially over the next two years. Key drivers in this market continue to be advanced technology feature sizes (less than 45 nm) and increased manufacturing in Asia-Pacific. Taiwan remains the largest photomask regional market for the fourth year in a row and is expected to be the largest market for the duration of the forecast.

Revenues of $3.1 billion place photomasks at 14% of the total wafer fabrication materials market, behind silicon and semiconductor gases. By comparison, photomasks represented 18% of the total wafer fabrication materials market in 2003. Another trend highlighted in the report is the emerging importance of captive mask shops. Captive mask shops, aided by intense capital expenditures in 2011 and 2012 and a weakening yen in 2013, gained market share at merchant suppliers' expense, with captive mask suppliers accounting for 49% of the total photomask market last year, up from 42% in 2012. Captive mask shops represented 31% of the photomask market in 2003.

A recent SEMI published report, Photomask Characterization Summary, provides details on the 2013 photomask market for seven regions of world including North America, Japan, Europe, Taiwan, Korea, China, and Rest of World. The report also includes data for each of these regions from 2006 to 2015 and summarizes lithography developments over the past year.

Source: www.semi.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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