PMI Leading Indicators
The JPMorgan Global PMI leading indicator (Chart 1) rose slightly in September, climbing further into growth territory (PMI>50).
For most key countries/regions (except Europe) the PMI increased (Chart 2).
U.S. Data on Hold due to Government Shutdown
Due to the lapse in U.S. government funding, census.gov sites, services, and all online survey collection requests will be unavailable until further notice.
Fortunately the August "Durable Goods" report was released prior to the shutdown providing preliminary (but limited) domestic electronic equipment shipments, orders and inventories for August. Here are the results:
- Electronic equipment book/bill dropped (Chart 3) as both orders and shipments declined (Chart 4).
- Electronic equipment order and shipment growth increased on a 3/12 basis (Chart 5) but this "growth" is a bit misleading. The August 3/12 was relative to a weak period in 2012 and (since it was a 3-month growth rate) it was bolstered by stronger June and July 2013 data.
- Aircraft shipments weakened (Chart 6) as did communication equipment orders (Chart 7).
- Computer equipment orders and shipments improved slightly (Chart 8).
Global Semiconductor Sales Increase for Sixth Straight Month in August (Charts 9-15)
- Worldwide sales of semiconductors reached $25.87 billion for the month of August 2013, an increase of 6.4% compared to August 2012, marking the industry’s largest year-over-year growth since March 2011.
- Sales in the Americas increased by 23.3% compared to August 2012.
- Global sales in August were 1.3% higher than the previous month’s total of $25.53 billion, marking the sixth consecutive month of growth globally.
- This week’s government shutdown and a looming debate over the nation’s debt limit threaten to destabilize the economy and disrupt growth.
The Semiconductor Industry Association (SIA) announced that worldwide sales of semiconductors reached $25.87 billion for the month of August 2013, an increase of 6.4% compared to August 2012, marking the industry’s largest year-over-year growth since March 2011. Sales in the Americas increased by 23.3% compared to August 2012, while global sales in August were 1.3% higher than the previous month’s total of $25.53 billion. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.
"Global semiconductor sales have now increased for six consecutive months, and the industry is well ahead of last year’s pace, thanks largely to sustained growth in the Americas," said Brian Toohey, president and CEO, Semiconductor Industry Association. "Strong demand for memory products has driven sales in recent months, but sales were also up in August among non-memory products, demonstrating the breadth of the semiconductor market’s strength."
Regionally, August sales topped sales from the same month last year in the Americas (23.3%), Asia Pacific (7.6%), and Europe (5%), but decreased in Japan (-16.4%), in large part because of the devaluation of the Japanese yen. Sales in August were up across all regions compared to the previous month.
"Semiconductor sales have demonstrated increasing momentum in recent months, thanks in part to stabilizing macroeconomic conditions, but this week’s government shutdown and a looming debate over the nation’s debt limit threaten to destabilize the economy and disrupt growth," said Toohey. "Congress and the Administration should work together to avoid these self-inflicted wounds and get America’s fiscal house in order."
North American August PCB shipments; Revised 2013 IPC Forecast Reflects Stalled Growth (Charts 16-19)
IPC - Association Connecting Electronics Industries announced the August findings from its monthly North American Printed Circuit Board (PCB) Statistical Program, which included a revised 2013 forecast of nearly flat sales growth for 2013. Sales and order growth both stalled in August after signs of upward momentum in recent months.
Sales and Orders Remain Slow
Total North American PCB shipments decreased 1.6% in August 2013 from August 2012, and bookings decreased 9.1% year-over-year. Year-to-date, PCB industry shipments remained below last year's levels at -3.9% and bookings were down 1.0%. Compared to the previous month, PCB shipments in August were up 5.3% while bookings were down 8.1%. Shipments exceeded bookings in August and the PCB book-to-bill ratio dropped to parity at 1.00.
Until August, year-on-year sales growth had been improving steadily in recent months, bolstered by solid growth in orders since the beginning of 2013. Orders fell below last year's levels in June and August this year, bringing down the book-to-bill ratio, which had been positive for the previous seven months.
"Just as the North American PCB industry began showing signs of renewed growth, it was hit by some negative market developments, most notably reductions in U.S. military spending," said IPC's director of market research Sharon Starr. "This was especially evident in sales of rigid flexible circuits," she explained. "Still, the long run of positive book-to-bill ratios we have just seen indicates good fundamental demand that will support sales growth later in the year."
Taiwan to Lead Semiconductor Equipment and Materials Spending in 2013 to Reach US $20 Billion (Charts 20 & 21)
ASE, Etron Technology, HMI, Inotera Memories, and other Major Suppliers Remain Optimistic for 2014
In recent years, Taiwan has become the center for semiconductors with manufacturers investing heavily in both hardware and materials. It is expected that totaling spending for these segments in Taiwan will be on the order of $20 billion for 2013 and growing into 2014. Terry Tsao, president of SEMI Taiwan, stated, "Taiwan's top position in equipment and material investments has yet again demonstrated the nation's irreplaceable importance in the global semiconductor industry. As semiconductor processes advance, equipment and materials will become increasingly integral to the industry. SEMI will continue to bridge the equipment and material suppliers with the fabricators and design companies to further advance the semiconductor industry in Taiwan."
In addition to remaining optimistic toward the semiconductor equipment and material markets, major suppliers including Etron Technology, Inotera Memories, ASE, and Hermes Microvison also presented their views on the industry outlook and technology roadmap at the pre-show press conference.
Here are updated historical metal prices:
- Copper (Chart 22)
- Tin (Chart 23)
- Silver (Chart 24)
- Gold (Chart 25)