“Flash” September Purchasing Managers Indices
IHS Markit (formerly Markit Economics) just released its flash September PMI (leading indicator) results for select countries/regions.
- Chart 1 summarizes the August actual versus September flash results for the countries/regions included in this early release. PMI values greater than 50 indicate expanding manufacturing activity.
- The U.S. remained in expansion territory but its rate of expansion declined (Chart 2).
- The Eurozone saw improved growth in September following a PMI dip in August (Chart 3).
- Japan edged back into manufacturing expansion (Chart 4).
JEITA just released domestic Japanese electronics production data for July:
- Electronic equipment production declined slightly from June to July (Charts 5 & 6. July 2016 was down 11% compared to July 2015.
- Electronic equipment “growth” on a 3/12 basis was down about the same amount as semiconductor shipments to Japan (Chart 7).
- IC production increased slightly from June but discrete semiconductor output declined (Chart 8).
- Semiconductor capital equipment shipments to Japan declined 25% in 2Q’16 versus 2Q’15 (Chart 9).
- Passive component production rebounded to its highest point since November 2015 (Chart 10).
- PCB production also increased slightly (Chart 11) but it was down 13% in 2Q’16 versus 2Q’15 as its rate of decline is accelerating (Chart 12).
- Japan’s PMI leading indicator points to slowing contraction (but not growth) in the near term (Chart 13).
- Both electronic component and device production continues to decline (3/12 <1) per Chart 14.
Electronic Equipment Monthly Shipments by Major Country/Region
Custer Consulting Group’s monthly electronic equipment shipment model has been updated:
- 3/12 monthly growth rates by region are given in Chart 15. Values greater than 1.0 indicated an expansion.
- Consumer driven equipment shipments are finishing their normal summer seasonal slow period and will likely rebound in September. China will be the main beneficiary (Chart 16).
- August 2016 global electronic equipment shipments were up 3.3% versus August 2015. Year-to-year seasonality is quite consistent (Chart 17).
Source: Regional data as analyzed by Custer Consulting Group
Printed Circuit Board Monthly Shipments by Major Country/Region
Custer Consulting Group’s global PCB shipment model has also been updated:
- Most regions are at or near a decline when comparing the recent three months’ shipments versus the same three months a year early (Chart 18).
- China has begun its seasonal upturn (Chart 19).
- SE Asia’s PCB market dominance continues (Chart 20).
- PCB shipments in 2016 are on track to rise 1.8% compared to 2015. They will likely peak in September or October and then plunge through 1Q’17 (Chart 21).
Source: Regional data as analyzed by Custer Consulting Group
Server Shipments expected to pick up as Internet Service Providers Place Orders
With Google, Facebook, Microsoft and Amazon ready to pull in their new datacenter server orders for the second half, sources from the server-related upstream supply chain expect server shipments to enjoy growth in the last half of 2016 and competition between server players will also start heating up.
In addition, since Intel's new Purley server processor platform is expected to make its debut in 2017, the sources expect a replacement trend to begin at the end of 2016 and last all the way to the end of 2017.
In the second half of 2015, Internet service providers started decelerating their datacenter expansions as the worldwide economy had not recovered as well as expected. However, demand for datacenter servers started increasing in the second quarter of 2016 and shipments are expected to grow in both the third and fourth quarters. Taiwan-based server players including Quanta Computer, Wiwynn, Mitac, Inventec and Foxconn Electronics (Hon Hai Precision Industry) are all expected to benefit.
With Google announcing plans to extend its faster undersea cable from Japan to Taiwan, the process will also accelerate the Internet giant's datacenter expansion in the Asia Pacific region.
Meanwhile, Google, Facebook, Microsoft and Amazon's aggressive development of virtual and augmented reality (VR and AR) applications has also increased demand for high-speed transmission of multimedia content. Such demand will also increase these players' purchasing of high-density servers and storage.
Top-5 Notebook Vendors and Top-3 Notebook ODMs saw their Shipments Rise
The top-5 notebook vendors and top-3 notebook ODMs saw their shipments rise 27% and 31% on month in August thanks to inventory preparation for the year-end holidays in Europe and North America, Windows 10's annual upgrade, and mass shipments of Intel's Kaby Lake processors.
Hewlett-Packard's (HP) new product releases for August successfully widened the vendor's shipment gap by nearly 700,000 units with number two Lenovo. HP stayed firmly as the largest notebook vendor in the month. Dell turned its focus to the consumer sector in August, but its shipments only grew a single-digit percentage on month, according to Digitimes Research's latest report on notebook shipments.
Asustek Computer and Acer both enjoyed over 10% on-month growths in August thanks to seasonality.
With HP's significant shipment growth in August, the top-3 ODMs, which are all suppliers of HP, together achieved higher on-month growth than the top-5 vendors combined, while ODM's combined on-year shipment growth also turned positive for the first time in the past 16 months.
Quanta benefited from HP's orders the most in the month, growing nearly 40% from July.
Robot Orders Break Record in First Half of 2016 (Charts 22 & 23)
The North American automation industry broke records through the first half of 2016, according to statistics released by the Association for Advancing Automation (A3).
A record number of orders for industrial robots were booked early this year – 14,583 units, valued at approximately USD$817 million – from North American companies. This represents a growth of two percent over the same period in 2015.
Despite this growth, order revenues decreased by three percent in the first half of the year. However, shipment revenues hit a new record, as 13,620 robots valued at $838 million were shipped to North American customers.
Automotive Industry Drives Demand for Industrial Robots
Automotive OEMs were the number one driving factor of the increase in robot orders, placing 16 percent more orders for robots. Applications that saw the greatest influx of robotic automation included inspection (69%), assembly (38%) and spot welding (21%).
Component suppliers took second place in the contributor ranking, having increased their orders of industrial robots by four percent.
On the flip side, total orders from non-automotive industries collectively decreased by 14%.
This isn’t evidence, however, of a decrease of interest in non-automotive applications for industrial robots. The food and consumer goods industry saw a growth in orders of 41% over records of the same period in 2015.
“In my opinion, that decrease year over year in terms of first half performance is just the ebb and flow in the overall growth of non-automotive applications,” said Alex Shikany, director of market research at A3. “The overall quantities of robots ordered and installed in these industries have increased in every category.”
The Robotic Industries Association, which is part of A3, estimates that around 265,000 robots are now in use inside North American factories, behind only Japan and China.
Later in the year, A3 will be releasing statistics regarding how much of a role collaborative robots and autonomous mobile robots played in respect to overall industrial robot order growth.
“We don’t have the detailed system in place to extract what percentage of data are related to those two categories yet,” said Shikany. “However, in the third quarter of this year, we’re going to be rolling that out.”
Worldwide PC Monitor Shipments up 4.9% y/y to 30.7 million units in 2Q’16 (Charts 24 & 25)
118 million PC monitor units are forecast to be shipped for FY16, an increase of 12.7% y/y HP & LG Electronics see solid year-over-year growth in world PC Monitor Market in 2Q’16
The total worldwide PC monitor market shipped more than 30 million units in the second quarter of 2016 (2Q16), up 4.9% year over year and 4.6% quarter over quarter, according to International Data Corporation (IDC).
“The second quarter proved better than forecast overall, with the U.S., EMEA, and Canada markets recording solid year-over-year results. However, IDC expects the global monitor market will continue to decline at rates around 3% year over year from 2018 through 2020,” said Maura Fitzgerald, senior research analyst, Worldwide Trackers.
IDC currently forecasts 118 million PC monitor units will be shipped for the full year 2016 and expects to see a year-over-year decline of 12.7% in worldwide shipments to 26.7 million units in the second quarter of 2017. By 2020, worldwide shipments are expected to be less than 100 million units as the adoption of mobile devices at lower price points is expected to continue.