MarketEye: Industry Pulse: World Semiconductor Forecast; Global Purchasing Managers' Indices; Supply Chain Visibility; Component Shortages; Copper Foil Increases & More

06.09.2009 // Posted by: Walt Custer // Posted in: Articles, Industry Conditions

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Worldwide Semiconductor Market to Decline -21.6% in 2009, Increase +7.3% in 2010 and +8.9% in 2011 (Chart 1, Chart 2, Chart 3, & Chart 4)

The global semiconductor market is expected to decline -21.6% on an annualized basis to $194.8 billion in 2009, according to the spring 2009 forecast of the World Semiconductor Trade Statistics (WSTS). Due to the real economical crisis the worldwide semiconductor market will further decrease from its -2.8% decline in 2008. The current projections have been revised downwards by -20 percentage points compared to the forecast that WSTS issued in November last year. We expect to reach the bottom of the current cycle during the first half of 2009 and therefore see now a positive growth beginning in the first quarter 2010. This leads to a growth rate for the semiconductor market of 7.3% to $209B in 2010 followed by a stronger increase of 8.9% in 2011 to $228B.

The global semiconductor market is expected to decline -21.6% on an annualized basis to $194.8 billion in 2009, according to the spring 2009 forecast of the World Semiconductor Trade Statistics (WSTS). Due to the real economical crisis the worldwide semiconductor market will further decrease from its -2.8% decline in 2008. The current projections have been revised downwards by -20 percentage points compared to the forecast that WSTS issued in November last year. We expect to reach the bottom of the current cycle during the first half of 2009 and therefore see now a positive growth beginning in the first quarter 2010. This leads to a growth rate for the semiconductor market of 7.3% to $209B in 2010 followed by a stronger increase of 8.9% in 2011 to $228B.

"The WSTS foresees a continued growth in demand for electronic products such as PCs, digital consumer appliances, mobile communications, and last but not least automotive electronics, enhanced by increase of semiconductor content per installed system." said Dr. Ulrich Schaefer, Worldwide Chairman of WSTS. He continued, "These trends are expected to unfold despite one of the strongest economical crisis in more than 80 years. Although we expect a significant reduction of sales this year, in the long run this trend is not influenced."

Global Purchasing Managers’ Indices Improve ( Chart 5, Chart 6, Chart 7, & Chart 8)

World Global factory activity continued to improve in May amid growing optimism that the worst of the recession may be over. Output contracted at a much less ferociously than at the start of the year in one economy after another, and this month three countries actually registered output growth - India, China and Turkey. The JP Morgan global manufacturing index (PMI) rose to 45.3 in May from 41.8 in April, the highest level in nine months, although still a long way below the 50.0 mark dividing growth from contraction. The component indexes for output and new orders were both running at much higher levels than in April.
Source: globaleconomydoesmatter.blogspot.com

USA The Institute for Supply Management’s index of national factory activity rose to 42.8 in May from 40.1 in April. This was the index's highest reading since September and was the fifth straight monthly rise.

China The Chinese manufacturing sector continued to expand moderately in May as new export orders improved. However, analysts cautioned: "Weak external demand is still hurting China's manufacturers, but conditions are gradually improving in response to stimulus spending... China remains on track for a moderate recovery after the sharp slowdown seen late last year," said Brian Jackson, an analyst with Royal Bank of Canada in Hong Kong.

Eurozone

The Markit Eurozone Final Manufacturing PMI rose to 40.7 in May, up from 36.8 in April. The rise of 3.9 points in the PMI was the largest since the survey began in June 1997.

TSMC and UMC: Clearer Order Visibility through 3Q’09

Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC) are expected to report better-than-expected performance for the third quarter as both are seeing clear order visibility through the quarter, according to industry sources.

The two major contract chipmakers have reportedly landed increased orders from Broadcom and Qualcomm.

In line with the foundry sector's upcoming rebound, major wafer packaging and testing houses Advanced Semiconductor Engineering (ASE) and Siliconware Precision Industry (SPIL) will also enjoy improved revenue performance on extended order visibility throughout September or even beyond, DIGITIME’s sources indicated.
Source: DIGITIMES

Kyocera: Order Recovery Uncertain for July-Sept

Orders for electronic parts will likely remain “touch-and-go” in the July-September quarter despite recent signs of recovery, Kyocera’s president Tetsuo Kuba stated last week.

"Orders hit bottom in January and February in reaction to excessive inventory cuts by companies," said Kuba, who also cited China's appliance subsidies to rural households as a reason for the firmer business.

"I know the figure has been improving month by month. However, I doubt that growth will continue through the July-September quarter."
Source: The Nikkei

Japan: PCB Order Visibility “Unclear”

The general sentiment of the JPCA Show floor regarding PCB order visibility is that it is still unclear beyond June. July is just around the corner and almost all the PCB makers exhibiting at this year's JPCA show have postponed their equipment orders, the equipment exhibitors mentioned.

H. Nakahara reporting from Tokyo

Notebook Component Shortages to Persist throughout 2Q09

The notebook industry will continue to suffer component shortages, especially of LCD panels and optical drives through the end of the second quarter, according to sources with notebook makers.

The production capacities for both components have been significantly reduced since the beginning of this year due to weak demand amid an economic downturn. Currently the panel industry is mainly suffering from a shortage of glass substrates, while the optical drive industry is being affected mainly by a shortage of pick-up heads (PUHs).

Some component suppliers are reluctant to resume suspended capacities as the overall market condition remains uncertain. They are still concerned about demand in the upcoming peak season as order visibility remains low.

Some other makers are unable to quickly increase their production due to financial constraints resulting from recent heavy losses, the sources said.
Source: DIGITIMES

Taiwan Copper Foil Makers Increasing Prices

Taiwan copper foil makers are likely to raise their quotes in June and July to reflect the recent surge of copper pricing despite that PCB demand remains weak.
Source: DIGITIMES

Europe’s Volume Printed Circuit Makers Struggle

Europe’s largest printed circuit manufacturer AT&S is transferring its volume PCB manufacturing from Europe to its Chinese facilities and laying off 300 in Austria.

Ruwel and Fuba are also facing challenges and Würth Electronics is shutting down its Pforzheim, Germany plant. Large European PCB makers are struggling due to cost pressures compared to “low cost” SE Asian manufacturing.

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