U.S. Electronic Equipment and Component Historical Data − Major Revision

On May 14 the U.S. Department of Commerce Census Bureau issued revisions to its “M3” series of historical shipments, orders and inventories for domestically made products including electronics, auto and aircraft. Some of these revisions were quite large, significantly affecting monthly electronic supply chain magnitudes and growth rates.

  • Chart 1 is the Commerce Department’s description of the reason for and methodology of this revision.
  • Charts 2 & 3 compare monthly historical orders by electronic equipment type, before and after the revision. Note the larger amount of electromedical, measuring and control equipment orders from 2012 to 2015.
  • Chart 4 compares total electronic equipment orders before and after the revision. Note the larger values for 2012-2015.
  • Chart 5 compares 3-month (3/12) growth of domestic electronic equipment before and after the revision. The revised 2012-2015 growth rates are much more volatile.
  • Charts 6-14 are updated with the revised data and Chart 15 summarizes the annualized (12/12) and 3-month (3/12) growth in March 2015 of the U.S. electronic supply chain. Note in particular military (Chart 11), search and navigation (Chart 12) and electromedical, measuring and control (Chart 13) equipment.

Source: http://www.census.gov/manufacturing/m3/index.html

China/Taiwan Update

April monthly revenues were recently released for Taiwan-listed companies (many of which manufacture in China.)

  • OEM revenues rose 5.4% in April 2015 versus April 2014 but dropped 4.2 % sequentially from March 2015 (Chart 16).
  • ODMs (Chart 17), motherboard companies (Chart 18) and display producers (Chart 19) had the same monthly sales patterns as the OEMs.
  • Wafer foundry sales increased in April (Chart 20) but package and test (Chart 21) and memory (Chart 22) revenues declined slightly.
  • Passive component (Chart 23), printed circuit board (Chart 24) and solar/photovoltaic (Chart 25) revenues were relatively flat from March to April.

Source: Company financial reports analyzed by Custer Consulting Group

Europe Update

March production revenues by sector for the European supply chain were just released by Eurostat.

  • Industrial production for the EU27 was flat sequentially from February with Germany and France declining but the UK and Italy growing (Chart 26).
  • Total EU27 electronic equipment production increased very modestly from February to March (Chart 27).
  • Motor vehicle (Chart 28) and aerospace (Chart 29) output rose significantly.in March.
  • Instrument (Chart 30) and electromedical (Chart 31) equipment production increased but electronic assembly (Chart 32) and printed circuit board (Chart 33) production declined in March.
  • Chart 34 summarizes the 1Q’15 versus 1Q’14 growth of the European supply chain

Source: Eurostat

DRAM Industry’s Q’1 Global Revenue fell by 7.5% Due To Weakening Contract Prices (Chart 35)

Global DRAM revenue fell by 7.5% QoQ in 1Q’15, with revenue totaling $12 billion, according to DRAMeXchange, a division of TrendForce. The decline in the industry’s revenue is the result of the 11% quarterly decrease of the average DRAM contract price and the seasonality effects in the notebook and smartphone markets.

Ken Kuo, assistant vice president of DRAMeXchange, said though DRAM makers experienced seasonal revenue decline in Q1, their margins did not shrink significantly as they made advances in process technology migration. This quarter’s margins were therefore roughly the same as its previous quarter’s. However, the effects of weak demand will have on DRAM price trend raises some concerns. How well the DRAM makers have done on technology migration and adjusting product mixes will be critical for their successful performances this year. DRAMeXchange forecasts the DRAM industry will be worth US$51.2 billion in 2015, an increase of nearly 12% YoY.

Source: www.dramexchang.com

Global smart TV shipment to reach 88 million units in 2015, 41.2% of the world LCD TV market

The worldwide smart TV shipment volume is estimated to reach around 88 million units in 2015, about 41.2% of the worldwide LCD TV market, according to MIC.

"Consumers' high acceptance of high-end products drove the Japan Internet TV penetration to over 50% in 2014," said Cindy Gu, industry analyst at MIC. "In western Europe where broadcasters have deployed open standard interactive platforms such as Hbb.TV and aggressively introduced Internet TV services, the penetration rate reached nearly 40%."

In China, not only traditional TV vendors but also new players such as LeTV and Xiaomi have spent a great deal of effort on smart TV development, leading to an increase in the China smart TV market. China currently holds the largest share of the worldwide smart TV market, accounting for 60%, said MIC.

By comparison, smart TVs in the U.S. have attracted few consumers due to the availability of a wide range of Internet TV services provided through various hardware devices such as Apple TV, Roku Media Player OTT STB, and Xbox game consoles, hence lower smart TV penetration. However, the U.S. market has still reached over 30% penetration as leading TV vendors Samsung and Vizio have integrated smart TV functions in their mainstream models.

Due to lower consumption power and incomplete broadband network infrastructure, smart TV penetration in emerging markets has only reached 20%. The environment will become friendlier toward smart TVs as broadband infrastructure in emerging markets improves. In the meantime, brands will continue to enhance user interfaces of their products, enrich multimedia content and application services, and reduce product prices to make smart TV more affordable and appealing to consumers, the firm added.

Source: www.digitimes.com

April U.S. Industrial Production Declined (Chart 36)

April’s U.S. industrial production fell for a fifth straight month. A key reason was ongoing declines in oil and gas drilling.

Source: www.federalreserve.gov/releases/g17/table1_2.htm

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.

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