New Tracking Model Offers Greater Market Visibility

Here is the abstract of a paper Ed Henderson and I presented at the ECWC11 World Printed Circuit Conference in Shanghai on March 17, 2008. I have attached our charts. If you want a copy of the full paper send an e-mail to: walt@custerconsulting.com

Authors: Walter Custer, Custer Consulting Group and Edward Henderson, Henderson Ventures

Abstract

The United States and Japan have long published monthly industry statistics for electronic equipment and printed circuit boards. However no source for European, Southeast Asian and global monthly data has been available. Fortunately, new information sources are now obtainable. The European Union (EU) now publishes Industrial Production Indices for a range of electronic equipment products for various geographical entities, including the 27 members of the EU. Moreover, the authors have assembled monthly revenue data for Asian producers, particularly those manufacturing in China and Taiwan.

Using the above information, annualized rates of regional shipments have been aggregated and converted to US dollars to compute a world total. Fixed 2006 exchange rates were used to filter out exchange-rate volatility. The resulting model clearly illustrates the recurring business cycles including the seasonality and volatility of the electronics industry.

This model can help to understand and predict the timing and magnitude of forthcoming downturns and recoveries in the electronic industry. The methodology discussed applies to the entire “food chain” – electronic equipment manufacturers, EMS companies, PCB and other component manufacturers and suppliers of materials and equipment to these companies.

Download the charts.