May sales were just released for Taiwan-listed companies, many of which manufacture in China.
- Electronic equipment (OEM) revenues declined 3.4% in May 2016 versus May 2015 and dropped 0.6% sequentially from April 2016 (Chart 1).
- ODM revenues increased 6.1% in May compared to May of last year and increased 1% from April 22016 (Chart 2).
- Network equipment revenues have been rising since late 2015 (Chart 3).
- Display sales have rebounded from their February low but are still far from their historical levels (Chart 4).
- Wafer foundry sales have stabilized and rose slightly in May (Chart 5) as have package and test sales (Chart 6).
- Memory revenues continued their ongoing decline (Chart 7).
- Passive component sale increased modestly from April (Chart 8).
- Solar/photovoltaic revenues increased slightly (Chart 9).
- Printed wiring board revenues remain well below their historical trend line but a seasonal upturn is likely soon (Chart 10).
- CCL (rigid laminate) sales remain “in sync” with monthly PCB sales (Chart 11). The PMI leading indicator points to renewed growth in the near future (comparing the same month in 2016 versus 2015 (Chart 12).
Source: Company financials with Custer Consulting Group analysis
Global Semiconductor Sales Decrease in April; Annual Sales Projected to Dip Slightly in 2016, Rebound in 2017, 2018 (Charts 14-17)
The Semiconductor Industry Association (SIA) announced worldwide sales of semiconductors reached $25.8 billion for the month of April 2016, a decrease of 1.0% from last month’s total of $26.1 billion and 6.2% lower than the April 2015 total of $27.6 billion. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average. Additionally, a new WSTS industry forecast projects decreased annual semiconductor sales in 2016, followed by slight market growth in 2017 and 2018.
“Global semiconductor sales decreased marginally in April, continuing a recent trend of market sluggishness driven by soft demand and a range of macroeconomic headwinds,” said John Neuffer, president and CEO, Semiconductor Industry Association. “Despite a cumulative decrease across all product categories, year-to-year sales of microprocessors and analog products increased modestly, perhaps foreshadowing stronger sales ahead. The latest industry forecast suggests global sales may indeed rebound somewhat in the second half of 2016, but still fall short of last year’s total. The global market is projected to grow slightly in 2017 and 2018.” Regionally, year-to-year sales increased in Japan (2.2%) and China (0.3%), but decreased in Asia Pacific/All Other (-8.2%), Europe (-8.6%), and the Americas (-14.8%). Compared with last month, sales were up slightly Japan (0.2%) and Asia Pacific/All Other (0.1%), but down in Europe (-0.8%), China (-1.8%), and the Americas (-2.2%). Additionally, SIA endorsed the WSTS Spring 2016 global semiconductor sales forecast, which projects the industry’s worldwide sales will be $327.2 billion in 2016, a 2.4% decrease from the 2015 sales total. WSTS projects year-to-year decreases across all regional markets for 2016: Europe (-0.1%), Asia Pacific (-1.2%), Japan (-1.7%), and the Americas (-7.3%). On the positive side, WSTS predicts growth in 2016 for several semiconductor product categories, including discretes, analog, and MCU products. Beyond 2016, the semiconductor market is expected to grow at a modest pace across all regions. WSTS forecasts 2.0% growth globally for 2017 ($333.7 billion in total sales) and 2.2% growth for 2018 ($340.9 billion). WSTS tabulates its semi-annual industry forecast by convening an extensive group of global semiconductor companies that provide accurate and timely indicators of semiconductor trends.
Autonomous Vehicle Sales Forecast
21 Million Sales Globally in the Year 2035 and Nearly 76 Million Sold Globally Through 2035
The latest forecast from IHS Automotive calls for sales of nearly 21 million autonomous vehicles in 2035. This is a substantial increase from previous estimates, and is influenced by recent research and development by automotive OEMs, supplier and technology companies who are investing in this area. The new forecast is also based on a wave of recent developments and investments in this sector of the market, as well as activity within various regulatory environments. Between now and 2035, IHS estimates that nearly 76 million vehicles with some level of autonomy will be sold globally.
The United States will lead the world in initial deployment and early adoption of autonomous vehicles, while Japan will simultaneously ramp up industry coordination and investment ahead of the Summer Olympics in Tokyo in 2020.
“Global sales of autonomous vehicles will reach nearly 600,000 units in 2025,” said Egil Juliussen, Ph.D. and director of research at IHS Automotive. “Our new forecast reflects a 43% compound annual growth rate between 2025 and 2035 – a decade of substantial growth, as driverless and self-driving cars alike are more widely adopted in all key global automotive markets,” he said.
The latest analysis from business information provider IHS Automotive, part of IHS Inc. takes into account key factors influencing this growth. New mobility solutions such as ride sharing and car sharing programs, increasing investment in autonomy by OEMs, suppliers and technology companies alike, research and development centers underway and improved efficiencies are expected to impact the further proliferation of automotive technologies. The IHS analysis also considers unique insight into various mobility trends forming around the world.
IHS forecasts incorporate a multitude of factors, including current market development of foundational technologies and considerable R&D announcements and collaboration projects under way. These include discussions and initiatives among OEMs and their suppliers, between OEMs and ridesharing companies, technology company initiatives and increased investment in autonomy and mobility by other entities as well.
“Future mobility will connect and combine many different modes and technologies, and autonomous vehicles will play a central role,” said Jeremy Carlson, principal analyst at IHS Automotive. “IHS expects entirely new vehicle segments to be created, in addition to traditional vehicles adding autonomous capabilities. Consumers gain new choices in personal mobility to complement mass transit, and these new choices will increasingly use battery electric and other efficient means of propulsion.”
North American Robotics Market Records Strongest Opening Quarter Ever (Chart 18)
The North American robotics market has set new records to begin 2016, according to Robotic Industries Association (RIA), the industry's trade group.
A total of 7,406 robots valued at approximately $402 million were ordered from North American companies during the first quarter of 2016. The number of units ordered in the first three months of 2016 is a new record among opening quarters, growing seven percent over the same period in 2015. Order revenue, however, decreased by 8% in the first quarter. Robot shipments also set a new opening quarter record, with 7,125 robots valued at $448 million being shipped to North American customers. This represents growth of two percent in units and 21% in dollars over the same quarter of last year.
“It is encouraging to see so many new companies adopting robotics for use in their operations,” said Jeff Burnstein, President of RIA. “Companies of all sizes are realizing that robots are more affordable than ever before and can help them increase their productivity to remain competitive in today's global economy.”
Growth in Non-Automotive industries soared in the first quarter of 2016. Robots ordered by the Semiconductor and Electronics (90%), Food and Consumer Goods (82%), and Plastics and Rubber (44%) industries all experienced sizable increases over the same period in 2015. While it is still the largest industry in terms of volume for robotics, orders to the automotive industry grew only one percent in the first quarter of 2016. In terms of applications, the biggest increases were realized in Spot Welding (31%), Assembly (15%), and Material handling (six percent).
“As the technology behind robots is evolving, the number of tasks they are able to perform is increasing,” said Jeff Burnstein, President of RIA. “Today more than ever, robots can handle complex tasks at fast speeds, leading to high productivity for customers. Disruptive innovations like collaborative robots are helping to drive adoption of robotics in new and exciting ways, and that is promising for the future of our industry.”
Burnstein noted that the RIA and its sister group AIA Advancing Vision + Imaging, are seeing the impacts of the growth in demand for robotics and related automation in upcoming events like the International Collaborative Robots Workshop and The Vision Show, slated for May 3-5, 2016 in Boston. “Collaborative robots are the hottest topic in robotics today, and we will have a record turnout in Boston for the workshop,” he said. “The Vision Show is also expected to have record attendance this year,” Burnstein added. Registration and free show passes are available now. Visit Robotics Online and Vision Online respectively for more information on these two collocated events.
RIA estimates that some 262,000 robots are now at use in North American factories, which is third to Japan and China in robot use.
Robotic Industries Association
Worldwide PC Shipments Forecast to Decline 7.3% y/y in 2016 (Chart 19)
PC Market Stability Remains Elusive as Markets Continue to Struggle, According to IDC
Worldwide PC shipments are forecast to decline by 7.3% year-over-year in 2016 according to an updated forecast from the International Data Corporation. The outlook continues to call for progressively smaller declines through 2017 followed by stable volume in 2018. However, growth in 2016 is now expected to be roughly 2% below earlier projections as conditions have been weaker than expected. Growth in the first quarter of 2016 (1Q’16) came in at -12.5%, just below IDC's forecast of -11.3%, and inhibitors such as weak currencies, depressed commodity prices, political uncertainty, and delayed projects continue to constrain shipments.
Although growth rates for devices such as phones and tablets continue to fall, potentially reducing the competitive pressure on PCs, we have not seen this translate into stronger PC shipments. The financial pressure on consumers across regions, and the availability of alternatives such as delaying a PC replacement by using a free Windows 10 upgrade or relying more on other devices continues to pressure consumer PC shipments. Similarly, while a large share of enterprises are evaluating Windows 10; the pace of new PC purchases has not yet stabilized commercial PC shipments.
Detachable Tablets also present a growing challenge as specs and price increasingly compare favorably against notebook PCs. Combining detachable tablets with PCs, the market is projected to decline by just over 2% in 2016 with small positive growth in later years, though still falling well short of peak shipments.
“The latest update reflects continuing pressure on PC shipments, but does not significantly change the factors driving the market,” said Loren Loverde, vice president, Worldwide Tracker Forecasting and PC research. “In addition, we now have had four consecutive quarters of double-digit volume declines. This type of prolonged slump is unprecedented, and lowers the bar for some improvement going forward. Unfortunately, the PC market still faces some persistent challenges, and for now, improvement continues to mean slower declines.” “Although inventory has improved in some markets, channels remain extremely conservative,” said Jay Chou, research manager, Worldwide PC Tracker, “The economic and competitive pressures are particularly affecting the consumer segment, which is projected to see another year of double-digit declines in 2016, and decline throughout the forecast. In contrast, commercial shipments are projected to decline just 4.4% in 2016 and see slightly positive growth for the next few years.”
The U.S. PC market suffered a rough opening salvo. “There are some strong market drivers imminent,” said Linn Huang, research director, Devices and Displays. “Chromebooks should continue their rapid ascent in U.S. K-12 as we enter the peak education buying season. We also believe that some organizations will have been testing Windows 10 throughout the year and will start the transition in earnest toward the end of the year. Still, the backdrop to all of that remains an ever softening consumer PC market.”