Weekly Global Update for January 15, 2015 | TTI, Inc.

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U.S. Electronic Supply Chain November Results

Last week's Factory Orders report provided further details on domestic November electronic supply chain orders, shipments and inventories.

  • Electronic equipment orders and shipments declined significantly from October (Chart 1) as their 3/12 growth rates (Chart 2) moved down to almost contraction (3/12 < 1) levels.
  • Military electronics orders dropped sharply (Chart 3) however electromedical, measurement and control equipment bookings and shipments improved (Chart 4).
  • Passive component orders and shipments increased slightly (Chart 5).
  • Vehicle shipments were flat (Chart 6) and aircraft shipments dropped (Chart 7).

Chart 8 summarizes the annualized (12/12) and 3-month (3/12) growth of the domestic electronics supply chain. The 3/12 “leads” the 12/12.

Source: www.census.gov/indicator/www/m3

2015 Printed Circuit Board Monthly Forecast by Region

Custer Consulting Group has updated its global printed circuit sales model with a 2015 forecast of PCB monthly shipments for key countries/regions.

Chart 9 gives our monthly PCB shipment forecast by region and Chart 10 provides our world total PCB monthly forecast.

Note that Custer Consulting Group updates these forecasts monthly by adding the most recent actual data. At present this model points to 2.6% total world rigid and flex PCB growth in 2015.

Source: Custer Consulting Group

Worldwide Semiconductor Revenue Grew 7.9% y/y to $339.8 Billion in 2014 (Chart 11)

Booming DRAM Market Propelled Strong Growth for Memory Makers

Worldwide semiconductor revenue totaled $339.8 billion in 2014, a 7.9% increase from 2013 revenue of $315 billion, according to preliminary results by Gartner, Inc. The top 25 semiconductor vendors' combined revenue increased 11.7%, which was more than the overall industry's growth.

The top 25 vendors accounted for 72.1% of total market revenue, up from 69.7% in 2013.

"As a group, DRAM vendors outperformed the rest of the semiconductor industry. This follows the trend seen in 2013 due to a booming DRAM market that saw revenue increase 31.7% during 2014 as the undersupply and stable pricing continued," said Andrew Norwood, research vice president at Gartner. "In contrast to 2013, which saw revenue decline in key device categories, including ASIC, discretes and microcomponents, all device categories saw positive growth in 2014, but none could match the growth of the memory market, which grew 16.9% in 2014. Excluding memory revenue, growth for the remainder of the market reached 5.4%, but this is much better than 2013 growth of 0.8% for non-memory revenue."

Intel saw a return to growth in 2014, following two years of revenue decline, with 4.6% growth. The company reorganized itself into five new business units in 2014, with the Datacenter Group continuing to be the most the stable unit for the company. Intel is on pace to reach its goal of 40 million tablet processors in 2014, although these processors are being shipped at significantly discounted prices with incentives. On the PC front, Intel continued to gain market share from AMD, and Gartner expects volume increases for both Intel's notebook and desktop platforms compared with 2013. Intel has maintained the number one market share position for the 23rd consecutive year, capturing 15.0% of the 2014 semiconductor market, down slightly from its peak of 16.5% in 2011.

"In 2014, we saw a return to production growth in the traditional PC sector, after a 10.1% decline in 2013," said Norwood. "The smartphone market continued to perform well, with production growth of around 34%, down slightly from 39.5% in 2013, although there was a distinct shift to utility and basic smartphones away from premium handsets. Tablet production, however, experienced a sharp slowdown from last year."

"DRAM revenues will hit $46.0 billion in 2014, an all-time high surpassing the previous record set back in 1995." said Norwood. "However, in terms of the overall share of the semiconductor market, DRAM accounted for 13.5% in 2014, half of the 27.9% share it held back in 1995."

Source: www.gartner.com

Global Smartphone Prices Tumbling Thanks to Chinese Firms (Chart 12)

Chinese companies are driving down the average selling prices for smartphones and tablets worldwide with low-cost products based on Google's Android operating system.

The average smartphone is expected to sell for $275 in 2015, down 12% from $312 last year, according to the Consumer Electronics Association. In 2010, the average smartphone sold for $440.

Smartphone sales are projected to rise 19% this year to nearly 1.51 billion units, with most of the growth occurring in developing markets like China, says the trade group.

Developing markets will account for 75% of smartphone unit sales this year, compared with 40% in 2010. China alone will account for 34% of global smartphone sales.

Unit sales growth is coming not from the latest Samsung or Apple phones, but from low-cost handsets from Chinese upstarts like Xiaomi, Coolpad and OnePlus, says Steve Koenig, CEA director of industry analysis. Many of their phones, such as Xiaomi's Mi 5, are feature rich and stack up well against leading brands, he said.

"A lot of these domestic Chinese brands have global aspirations," he said.

Tablets are experiencing similar downward pricing.

The average selling price for a media tablet is expected to be $259 this year, down 12% from $294 in 2014.

Tablet sales are projected to rise 20% this year to 337 million units worldwide, CEA says.

Source: Patrick Seitz, Investor's Business Daily, www.investors.com
  www.ce.org/

Tablet Growth Continues to Slow in 2015 (Chart 13)

Tablet Sales to Reach 8% Growth in 2015 While PC Market to Grow 1%

After a troubled year in 2014, the global tablet market is not returning to the levels of growth seen in the last four years as demand for tablets will continue to be slow in 2015. Gartner, Inc. estimates that worldwide tablet sales will reach 233 million units in 2015, an 8% increase from 2014.

"The collapse of the tablet market in 2014 was alarming," said Ranjit Atwal, research director at Gartner. "In the last two years global sales of tablets were growing in double-digits. The steep drop can be explained by several factors. One is that the lifetime of tablets is being extended − they are shared out amongst family members and software upgrades, especially for iOS devices, keep the tablets current. Another factor includes the lack of innovation in hardware which restrains consumers from upgrading.

At the Consumer Electronics Show (CES) this week, Gartner analysts expect the vendors in the devices space to announce new partnerships that lead to innovative apps that use personal data to tailor the user experience.

"We also expect development in cognizant computing (four stages: sync me, see me, know me and be me*) to help the vendors' relationships with consumers evolve from passive providers of hardware to in-sync with the user," said Atwal. "Beyond an enriched computing experience for the user, this next phase of the personal cloud will also help make the vendor and customer's relationships more personal, with services and advertising automatically tailored to consumer demands."

Worldwide combined shipments of devices (PCs, tablets, ultramobiles and mobile phones) for 2015 are estimated to reach 2.5 billion units, an increase of 3.9% over 2014. The mobile phone segment is on pace to grow 3.7% in 2015 and reach two billion units in 2016.

"The smartphone market is becoming polarized between the high- and low-end market price points," said Annette Zimmermann, research director at Gartner. "On one hand, the premium phone with an average selling price at $447 in 2014 saw growth dominated by iOS, and on the other end of the spectrum you have Android and other open OS phones' growth area in the basic phone segment, where the average phone costs $100. For the midrange smartphones, the market opportunity is becoming increasingly limited."

In the operating system (OS) market, Android surpassed a billion shipments of devices in 2014, and will continue to grow at a double-digit pace in 2015, with a 26% increase year over year.

"From 2015, we expect Windows to grow faster than iOS, as the PC market stabilizes and the challenge for the next iPhone to find significant growth becomes greater, narrowing the gap between the two operating systems," said Mr. Atwal.

Source: www.gartner.com

Japan-based Digital Camera Vendors shipped 40 million Cameras worth JPY888 billion during January-November, Slipping on year by 31.8% and 17.7% respectively (Chart 14)

Japan-based vendors, including Canon, Nikon, Panasonic, Sony and Olympus, shipped 4.313 million digital cameras globally in November 2014, decreasing 5.1% sequentially and 27.6% on year, and the corresponding shipment value of JPY99.29 billion (US$834 million) dropped 19.3% on year, according to Japan-based Camera & Imaging Products Association (CIPA).

These Japan-based vendors shipped 40.185 million digital cameras worth JPY887.57 billion during January-November, slipping on year by 31.8% and 17.7% respectively.

Total global digital camera shipments in 2014 are estimated at 50-60 million units, falling on year by nearly 30%, according to market analysts.

Japan vendors' digital camera shipments by type, November 2014

Camera type Shipments (m units) Y/Y Value (JPYb) Y/Y
Consumer model 2.949 (30.3%) 37.50 (24.5%)
DSLR 1.363 (20.9%) 61.78 (15.8%)
Source: www.digitimes.com
  www.cipa.jp/

EIPC Winter Conference Munich includes visit to Airbus Defense and Space Facility

The EIPC (European PCB Trade Organization) winter conference will focus on advances in PCB component manufacturing and also what makes a 'smart' circuit board. A key conference feature will be a visit to Airbus.

Conference Agenda: www.eipc.org/eipcevent/2015-eipc-winter-conference-munchen/

The Conference is being held February 5 and 6, 2015 at the Hotel NH Munich Airport, a perfect location from which to visit Airbus Defense and Space, Europe's number one Defense and Space Company. Here we shall see some of the products including the swing-role combat aircraft Eurofighter Typhoon, the multi-role military airlifter A400M and the multi-role transport and tanker aircraft A330 MRTT. Please note: numbers of visitors at Airbus are limited to 60, on a first-come, first-served basis, so make sure you are one of the first.

On the day prior to the conference itself, EIPC will be co-hosting a half-day workshop with EFRA-CEFIC on the subjects of RoHS, ReacH, legislation and laminate cost-of-ownership.

Contact Kirsten Smit-Westenberg (kwestenberg@eipc.org) or Sonja DerHaag (sderhaag@eipc.org) for more details.

Source: www.eipc.org

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. View other posts from Walt D. Custer.

 

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.

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