Semiconductor Market Unlikely to Pick Up until 3Q’15
Bough Lin, chairman of Siliconware Precision Industries (SPIL), has predicted that the semiconductor market is unlikely to return to its seasonal growth pattern until the third quarter of 2015.
A seasonal pick-up in demand usually starts in the second quarter, but the pick-up has been particularly slow in 2015, said Lin. With the China market becoming more significant, end-market device clients have adjusted their schedules for ordering chip components, Lin indicated.
Meanwhile, handset vendors including Apple and Samsung have seen their sales slowdown starting the second quarter, which Lin identified as another factor behind the particularly weak second quarter of 2015.
Source:www.digitimes.com
North American PCB Book/Bill Steady at 1.05 in March; Shipments Down 0.9% in March 2015 from March 2014; Year-to-date Shipment Growth -1.3% (Charts 1-4)
IPC announced monthly North American PCB data from its statistical program. Although sales remained sluggish, bookings continued ahead of last year and the book-to-bill ratio held steady at 1.05.
Total North American PCB shipments decreased 0.9% in March 2015 from March 2014, bringing year-to-date shipment growth to -1.3%. Compared to the previous month, PCB shipments were up 20.1%.
PCB bookings increased 1.6% compared to March 2014, improving the year-to-date order growth rate to 1.2%. Orders increased 16.9% in March compared to the previous month.
"The North American PCB business continues to experience stagnant sales compared to last year, but bookings are slightly ahead of last year and are strengthening," said Sharon Starr, IPC's director of market research. "Strong growth in March sales and orders over the prior month reflects normal seasonal patterns," she added. "The book-to-bill ratio has been positive for the past six months, which is a positive indicator for sales growth in the second and third quarters of 2015."
Source: www.ipc.org
PCs Prices to Rise by Up to 10% in 2015
Through 2016, 30% of PC Consumers Will Buy Down the Price Curve
Device vendors will have to raise the prices of PCs to offset the effects of currency devaluation. Gartner said prices of PCs in the Eurozone and Japan, in particular, will increase by up to 10% during 2015.
"We are currently seeing the sharp appreciation of the dollar against most other currencies reflected in companies' earnings results," said Ranjit Atwal, research director at Gartner. "PC vendors selling to Europe and Japan, where local currencies have fallen up to 20% since the start of 2015, have little choice than to raise prices to preserve profits."
Consumer Behavior
In mature markets, PC sales are determined by price and, through 2016, Gartner expects that 30% of PC consumers will buy down the price curve. Gartner analysts also expect the following behaviors amongst PC consumers:
Price-driven consumers (of PCs priced at less than $500) will purchase less expensive PCs with lower specifications to counter price rises. This segment is expected to be 30% of the market.
Value-driven consumers (of PCs priced at $500 to $800) will delay purchases due to rising prices. This segment is expected to be 40% of the market.
Feature-driven consumers (of PCs priced at over $800) will extend lifetimes by 10% to compensate for higher prices, and absorb remaining price increases. This segment is expected to be 30% of the market.
Source: www.gartner.com
Worldwide Smartphone Shipments Increased 16.7% y/y to 336.5 million in 1Q’15 (Chart 5)
Samsung Reasserts Its Global Lead in Smartphone Shipments with a Renewed Focus on Lower-Cost Smartphones in the First Quarter of 2015
The worldwide smartphone market kicked off the year with an expected post-holiday dispersion in shipment volumes compared to the previous quarter's unprecedented results. According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, vendors shipped a total of 336.5 million smartphones worldwide in the first quarter of 2015 (1Q’15), up 16.7% from the 288.5 million units in 1Q’14 but down by -10.9% from the 377.5 million units shipped in 4Q’14. In the overall mobile phone market (smartphones plus feature phones), vendors shipped 458.9 million units worldwide, down a mere -0.1% from the 459.3 million units shipped in 1Q’14.
"The challenge made by Apple for the top spot in the fourth quarter returned to a clear lead for Samsung in the first quarter, despite the soaring global demand for the iPhone 6 and 6 Plus," said Anthony Scarsella, Research Manager with IDC's Mobile Phone team. "Samsung's shipments, given that the S6 was not launched into the market for the full quarter, were driven by large volumes into emerging markets and steady demand for its midrange and lower-priced smartphones."
"Apple's strong follow-up quarter was in itself surprising, as it enjoyed success thanks to consumers' insatiable appetite for larger screened iOS devices in many key markets, including Greater China. China's overall year-on-year market growth in the quarter flattened significantly, however, so aside from Apple, most vendors will be looking outside of China's borders for the next big push," said Melissa Chau, Senior Research Manager with IDC's Mobile Device Tracker team. "Through the rest of this year, we expect all vendors to be squeezed on falling ASPs, while at the high end it will be a battle between the Galaxy S6 and S6 edge from Samsung versus continued demand for the iPhone 6 and 6 Plus."
Worldwide Tablet Market Contracts amid Competition from Alternative Devices (Charts 6 & 7)
Worldwide tablet shipments recorded a year-over-year decline for the second consecutive quarter in the first quarter of 2015. Overall shipments for tablets and 2-in-1 devices fell to 47.1 million in 1Q’15, a 5.9% decline from the same quarter a year ago, according to IDC.
"The market slowdown that we witnessed last quarter is continuing to impact the tablet segment, but we see some growth areas that are starting to materialize," said Jean Philippe Bouchard, Research Director, Tablets. "Cellular-enabled tablets are outgrowing the rest of the market, providing an additional revenue stream for OEMs and mobile operators. In addition to driving higher usage than Wi-Fi-only tablets, cellular-enabled tablets also help position the segment as true mobile solutions rather than stay-at-home devices."
Apple still leads the overall market despite five consecutive quarters of negative annual shipment growth. Apple shipped 12.6 million iPads in the first quarter, capturing 26.8% of the market in volume and declining -22.9% when compared to 1Q’14. Samsung (19.1% share) maintained its second place in the market despite a -16.5% decline in shipments compared to the same period last year. Lenovo (5.3% share), Asus (3.8 %) and LG (3.1%) rounded out the top 5 positions. LG's year-over-year growth was notable as it continues to benefit from US carriers' strategy to bundle connected tablets with existing customers.
"Although the tablet market is in decline, 2-in-1's are certainly a bright spot," said Jitesh Ubrani, Senior Research Analyst, Worldwide Quarterly Tablet Tracker. "While 2-in-1, or detachables, still account for a small portion of the overall market, growth in this space has been stunning as vendors like Asus, Acer, and E-FUN have been able to offer products at a fantastic value; and vendors like Microsoft have been able to drive growth at the high end with devices like the Surface Pro 3."
As a result of the recent market contraction, IDC believes tablet OEM's should continue to focus on potential growth areas like the aforementioned cellular-enabled tablets and 2-in-1 devices. The commercial segment remains an area to watch for both tablets and 2-in-1's. However, as of now, commercial uptake has been relatively slow as IT buyers continue to evaluate their mobile strategies.
Source: www.idc.com
Global Hard Disk Drive Demand will Continually Decrease from 561 million units in 2014 to 550 million units in 2015 and further to 538 million units in 2016 (Chart 8)
Global demand for hard disk drives (HDDs) of all sizes will continually decrease from 561 million units in 2014 to 550 million units in 2015 and further to 538 million units in 2016, according to Taiwan and Shanghai general manager Vincent Chen for HGST.
For HDDs used in notebooks in particular, global demand will slip from 171 million units in 2014 to 161 million units in 2015 and 147 million units in 2016 mainly because global notebook sales are on the decline and increasing adoption of SSDs in notebooks, Chen said. Global demand for HDDs used in desktops will also drop from 156 million units in 2014 to 152 million units in 2015 and 150 million units in 2016, Chen noted.
Thanks to fast growing popularity of mobile terminal devices, however, global demand for HDDs used in personal storage will increase from nearly 80 million units in 2014 to nearly 82 million units in 2015 and further to 87 million units in 2016, Chen indicated.
For business-use HDDs, demand may remain unchanged in sales volume but is expected to grow annually by 1-3% in sales value, and 15-20% in storage capacity, Chen said.
Specifically for business users, HGST launched its first helium-filled HDD model in 2013, Chen noted. Helium-filled HDDs' storage capacity per unit dimension is 33% higher than air-filled models' and therefore such HDDs have lower total cost of ownership, Chen indicated. In addition, helium-filled HDDs are superior to air-filled models in power consumption and reliability, Chen said.
Source: www.digitimes.com
U.S. GDP Grew Only 0.2% 1Q’15 (Chart 9)
U.S. economic growth declined sharply in 1Q’15 as a strong dollar and west coast dock strikes limited exports, harsh weather hurt consumer spending and energy companies cut spending.
"A stalling of U.S. economic growth at the start of the year rules out any imminent hiking of interest rates by the Fed," said Chris Williamson, chief economist at Markit in London.
Source: www.bea.gov/national/
